The Importer Exporter Code (IEC) is an essential business identification number required for exporting from or importing to India. It is mandatory to obtain an IEC unless exempted. The IEC serves as a unique identification number for businesses engaged in import or export activities.
Under the Foreign Trade Policy, IEC is generally not necessary for service exports, except when the service provider is availing benefits. With the introduction of GST, the IEC issued is now the same as the PAN of the firm. However, the IEC will still be separately published by the Directorate General of Foreign Trade (DGFT) based on an application.
Import and Export Code, commonly known as the IEC number, must be obtained by businesses engaged in import or export activities in India. It is a ten-digit unique number issued by the DGFT.
Having an IEC registration certificate is mandatory for businesses involved in import and export. Therefore, before initiating imports into India, importers must ensure that the importing entity has both GST registration and an IE code, as both are required for customs clearance.
If an importer lacks both the IE code and GST registration, the goods will be held at the port and may incur demurrage charges or could even be destroyed.
Please note that the specific requirements and procedures related to IEC registration may vary based on the guidelines and regulations of the Directorate General of Foreign Trade. It is advisable to consult the official DGFT website or relevant authorities for accurate and up-to-date information regarding IEC registration.
Benefits of Import Export Code (IEC) Registration:
- Access to International Markets: Obtaining an IE Code allows businesses to engage in import and export activities, enabling them to enter the global market. It facilitates smoother international transactions and opens doors for business growth and expansion.
- Easy Online Registration: The process of obtaining an IE Code is entirely online, making it convenient and hassle-free. The submission of documents is streamlined, simplifying the registration process.
- Minimal Document Requirement: Compared to other registrations, obtaining an IEC requires fewer documents, reducing the paperwork and documentation burden for businesses.
- Lifetime Validity: The IE Code has lifetime validity as long as the business entity exists. This eliminates the need for frequent updates, filing, and renewal of the registration. Once obtained, the IE Code remains valid unless it is revoked or voluntarily surrendered.
- Prevention of Illegal Goods Transportation: The authenticity of information is a key requirement for obtaining an IE Code. This helps in reducing the transportation of illegal goods, as proper information and compliance are necessary for registration.
- Access to Benefits and Subsidies: Registered businesses with an IE Code can avail themselves of various benefits and subsidies offered by Customs, Export Promotion Councils, and other authorities. Exporters can benefit from exemptions through Letter of Undertaking (LUT) filing under GST and claim refunds on taxes paid for eligible exports.
- Minimal Compliance Requirements: Importers and exporters are not subjected to extensive compliance obligations, such as annual filings or return filings, unlike some other tax registrations. This simplifies the compliance process for businesses engaged in import and export activities.
Please note that the benefits mentioned may vary based on specific regulations and policies in place.
The checklist of scanned documents required for IEC Registration includes:
- Proof of establishment/incorporation/registration: Depending on the type of firm, provide the establishment/incorporation/registration certificate. This may include documents such as the Certificate of Incorporation for private limited companies, Partnership Deed for partnerships or LLPs, Proprietorship registration certificate, Society/Trust registration certificate, HUF registration certificate, or any other relevant document for artificial persons.
- Proof of Address: Submit proof of address, which can be one of the following documents: Sale Deed, Rent agreement, Lease deed, Electricity bill, Telephone landline bill, Mobile post-paid bill, MoU, Partnership deed, or other acceptable documents. For proprietorship firms, Aadhar card, Passport, or Voter ID can also be used as proof of address.
Note: If the address proof is not in the name of the applicant firm, a No Objection Certificate (NOC) from the premises owner in favor of the firm, along with the address proof, should be submitted as a single PDF document.
- Proof of Firm’s Bank Account: Provide either a canceled cheque or a bank certificate as proof of the firm’s bank account.
- Active Digital Signature Certificate (DSC) or Aadhaar: Ensure that you have an active DSC or Aadhaar of a member of the firm for submission.
- Active Firm’s Bank Accounts: Have active bank accounts for the firm to enter the account details in the application and make online payment of the application fee.
Please note that this is a general checklist, and additional documents may be required based on specific circumstances or as per the guidelines of the IEC registration authority.
Process of Obtaining Import Export Code (IEC):
Step 1: Gather and Submit Documents: Collect the required documents and information as per the checklist provided by the IEC registration authority.
Step 2: Prepare IEC Application: Prepare the IEC application form with the necessary details such as business information, proprietor/partner/director details, address proof, bank account details, etc.
Step 3: File the IEC Application: Submit the completed IEC application form along with the required supporting documents through the designated online portal or physical submission, as per the guidelines provided by the registration authority.
Step 4: Await IEC Certificate: After submission, the application will be processed by the Directorate General of Foreign Trade (DGFT). Once approved, you will receive the Import Export Code (IEC) certificate, which serves as your unique identification number for import and export transactions.
The key deliverables for obtaining Import Export Code (IEC) are:
- Copy of Filed IEC Application: You will receive a copy of the IEC application that you have filed with the relevant authorities. This serves as proof that you have submitted your application for IEC registration.
- Payment Challan: You will receive a payment challan, which confirms that you have made the necessary payment for the IEC registration process. This is an essential document for financial record-keeping.
- IEC Certificate: Once your IEC application is approved, you will be issued an IEC certificate. This certificate serves as your unique identification number for import and export activities. It confirms that you have successfully obtained the Import Export Code and allows you to engage in international trade.
These deliverables are important documents that you should keep safely for future reference and use in your import/export business operations.
What do you want to know?
This is required as per FEMA regulations. IEC make it easy to do foreign remittance. Which require a working current account. This bank certificate prove that you are capable of doing foreign remittance. For exporter the bank account is required to get foreign funds and drawbacks from the government. In both case if you are getting IEC without any bank account. You might receive or send fund not following the FEMA rules. So, bank account is basic step to prevent foreign exchange fraud.
If you are thinking in perspective of regular business and generating revenue through it, yes it is mandatory to get an IEC. If it is just a one time then You can tie up with local international courier agencies which have their own tie up with fedex, dhl etc. They ship on your behalf of you.
Import Export Code (IEC) number allotted to an individual or a company denotes that the holder is registered with Director General of Foreign Trade, functioning under Ministry of Commerce, Govt. Of India to carry on the business of import and export. According to rules, only one IE Code will be issued against one PAN. As every person or company can have only one PAN, it follows that no one can have more than one IE Code. There is no restriction on the number of goods meant for import or export. Issuing more than one IE code to the same person/company will lead to confusion.
It is not necessary for export of services for freelancers (as these would be general services). It is required for service exporter or importer only if the provider is taking benefits under the foreign trade policy.