Suppose you are an exporter or importer in India. In that case, you are probably aware of the relevant formalities and documents required to get and the two most significant permissions necessary to ship your goods out of the nation. Similarly, the import requirements also call for a process line with evident documentation. Here we will be discussing the export-related formalities and relevant requirements
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The first and the most crucial element of your export business is the Import Export Code, a business identity number provided by the General Directorate of Foreign Trade (DGFT). The second is an Authorised Dealer Code, required for customs clearance of your items.
What does the IEC License imply in India?
Import Export Code is a ten-digit number. Companies and enterprises must receive this code from launching an import and export operation in the Indian Territory. Without this IEC code, it is impossible to do export or import transactions. If you are a business owner who intends to expand your operations into international waterways, some particular rules and processes must be followed. Licensing and registration are also required for importing and exporting.
How does one go about acquiring an import-export code/ IEC number?
- The applicant's Head Office will file the IEC application.
- Along with the form, the applicant need to submit the 'Aayaat Niryaat Form also.
- A single code is issued for a single PAN number. So, if the proprietor holds multiple codes, then these codes may be submitted to the Regional Office prior to begin the process. If any of these codes is found later, then these codes will be then subject for cancellation.
The eligibility criteria for acquiring an IEC number
The requirements of the Foreign Trade Rules, 1993 control the whole operation of import and export in India. As a result, IEC is likewise governed by the same legislation. When importing or exporting services or technology, IEC is required only in limited circumstances, such as importing or exporting specified services' or established technologies. The Government of India restricts international trade due to national security concerns.
Under the following conditions, import-export code is not required:
- Import/export by the government officials. It also includes the government ministries some charity groups. However, that have to be notified.
- Import/export of products for personal use that are unrelated to trade and trading criteria, manufacturing, or agriculture.
How to obtain the IEC application form online?
The application papers can be available with DGFT. It is available on their website in PDF or Word format. If you apply, you must ensure that the bank authorities attest to appendix 18B. An IEC number assigned to an application must be valid for all branches and divisions as specified in the format.
The form has a minimal import export code application cost of Rs. 250/-. You can pay via DD (Demand Draft) or TR6 challan whether you file online or offline. Alternatively, you can pay using Electronic Fund Transfer by DGFT's Nominated Bank. Along with this Code application, there has to be a submission of the TR6 Challan.
important:
You must sign and finish the IEC application without making any errors. If an incomplete application is discovered, there is a risk that it will be rejected. A soft copy of the application in Word format should be given in the case of a manual application.
What should you do if you misplace your IEC number?
If you misplace your IEC number, there is a process to get it back. Although, the process is a bit tedious, but one can request the code. the issuing body, that is the DGFT may accept requests for a duplicate copy of the IEC number. Provided, if the request is supported by an affidavit.
What should you do if you no longer require the import-export code?
If you do not want to use the assigned IEC number, you can lawfully relinquish it by notifying the issuing authorities. When such an intimation is received, the issuing power must cancel it promptly and electronically transfer it to the DGFT for further transmission to the concerned Authorities.
When is this code Required?
- Importers and exporters will need the Import Export Code in the following situations:
- When importers need to clear their cargo via customs, the customs officials will request an Import Export Code.
- When importers send payments through the bank, there is a requirement by the bank for this code.
- When exporters are required to dispatch their cargo, the customs port will request an export code from the exporter.
- Furthermore, the import-export code will be required when the exporters are paid in foreign currency, and the funds are placed straight into the exporter's bank account.
When is having an Import Export Code not required?
The Government of India has released a circular stating that an Import Export Code is not required for businesses registered for GST. If a trader is GST-registered, the PAN will be considered as their new Code for import and export purposes. An Import Export Code is not necessary if the imported or exported commodities are not for commercial purposes but personal ones. Imports and exports carried out by Indian Government ministries and departments, and designated charity organisations would not require an Import Export Code.
The export-import landscape in India:
India has emerged as South Asia's trade powerhouse. With the advent of globalisation and the free market, India has seen a surge in cross-border commerce. In quest of economic options, more and more businesses are venturing across the border and engaged in the import-export market.
The number of enterprises that wish to break down the limits of local markets and expand into global markets is growing all the time. However, managing a worldwide firm is not the cup of tea for everyone. To get the complete compliance and know-how of the process, it is essential to know about all the associated elements! if you are also looking for a definite guide on IEC, it is right above!
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