In this age of cutthroat competition, everybody wants to grow their business beyond the limits of the domestic market. Indeed, it has become far easier to expand a business globally now, thanks to the internet and modern technology. However, prior to this, you are supposed to follow certain procedures and comply with some laws regarding various registrations and licences necessary to start an international trade business. Import Export Code (IEC) licence is one of the basic requirements necessary for importing or exporting goods from India.
What is the Import Export Code (IEC)?
The iec status is essentially required by any kind of trader looking to start an import/export business in the country. It is issued by DGFT, which stands for the Director General of Foreign Trade; it’s a unique 10-digit code that basically has lifetime validity. Basically, importers cannot import goods without an IEC, and exporters cannot avail benefits from DGFT for export schemes without this code.
The following are scenarios where IEC is required:
- Import Clearance: The customs department demands an IEC when an importer is to clear shipments from customs.
- Foreign Remittances: When an importer is sending money abroad through banks, the latter asks for IEC.
- Export Shipments: IEC is required for custom clearance in case an exporter has to necessarily send shipments.
- Receiving Foreign Currency: If any exporter is receiving money in foreign currency directly into his account, then the bank requires IEC.
Steps to Register for IEC
Obtaining an iec status is rather simple. There’s a step-by-step process involved in registering for an IEC:
- Visit DGFT Website: The applicant shall visit the official website of DGFT.
- Click on Services: On the homepage, click the tab ‘Services’; from the drop-down list, select ‘IEC Profile Management’.
- Apply for IEC: Click ‘Apply for IEC’ to undertake registration.
- Credential Entry: Fill in the details asked for and click on ‘Send OTP’. If an OTP is picked up, then just enter that to proceed further.
- Receive Temporary Password: You will be provided with a temporary password after OTP validation, which you can then change after logging in to the gateway of the concerned department.
- Application Details: Log in with your credentials, click the ‘Start Fresh Application’, and fill in proprietor/partners/directors details, attachment of DSC, bank details, etc.
- Pay Application Fee: Make the payment for application fees. At the end, download the receipt for further reference.
- IEC Certificate Received: IEC Certificate is sent to your registered email and also downloaded from DGFT website.
Documents Needed for IEC Registration
To register for iec status, you need to submit the following documents:
- PAN Card of the individual, firm or company.
- Proof of Identity: Xerox of Voter ID, Aadhaar card, or passport of Proprietor.
- Proof of Establishment: Registration or incorporation documents related to the entity in subject, e.g., partnership deed or company registration document.
- Proof of Business Address: Lease deed, sale deed, rent agreement, or utility bills like electricity or telephone bills.
- Bank Account Proof: Cancelled cheque of the current bank account of the individual or company.
- Self-addressed Stamped Envelope for sending IEC certificate by post.
Benefits accruing from IEC Registration
IEC registration offers several advantages for businesses planning to venture into international markets:
- Business Expansion: The IEC code helps organisations extend their service or product offering to the global marketplace; this helps a business to expand its capacity.
- Availing Government Benefits: The Companies can avail benefits from DGFT, Export Promotion Councils, and Customs based on their IEC registration.
- No Compliance for Returns: Once allotted, IEC does not require the filing of any returns. There are no requirements for maintaining its validity through frequent renewals.
- Easy Processing: Obtaining an IEC code is relatively simple and can be done within 10-15 days after application submission.
- Lifetime Validity: Once issued, an IEC is valid for the entity’s entire lifetime, with no need for renewal.
Exemptions from IEC Requirement
There are few exceptions where an iec status is not required:
- Registered Traders under GST: In case of traders who are registered with GST, the PAN shall be considered as IEC code for import / export purposes.
- Personal Use: IEC, however, is not required if goods are imported or exported for personal purposes and not for commercial use.
- Government Entities: Similarly, such departments and ministries of the Government of India or notified charitable institutions shall not be obliged to obtain IEC.
Cases When IEC Is Not Compulsory
According to recent government circulars, no IEC is required in the case of traders who have registered under GST. For such cases, his PAN can be treated as an IEC code to perform import/export activities. Moreover, import/export for personal usage and the transactions of certain governmental bodies and charitable organisations are some of the categories exempted from IEC requirements.
How to Submit Application for IEC
The application for IEC can be made personally by the exporter or through the authorised representative at the DGFT regional office, or it can be sent by post/courier 5. Most of the regional offices have a counter facility to assist the applicants in filing the application form correctly. Applicants are encouraged to fill in the form themselves as the same is quite simple and self-explanatory.
The allotment letter of IEC is dispatched by post to the registered address mentioned in the application, or it can be hand-delivered if the application is filed through counter assistance.
Validity of IEC
Once an iec status is allotted to an applicant, it remains valid for all its branches, divisions, units, and factories. There is no requirement for periodic renewal and hence, this is a lifetime registration.
Endnote
In today’s competitive business scenario, expansion into global markets cranks up business enormously. Getting an iec status is the first and foremost thing one has to do in case one wants to expand their product or services beyond local boundaries. The process of registration relating to IEC is simple, the documentation required is minimum, and the benefits one reaps are many. Through initiatives like Amazon Global Selling, Indian exporters and MSMEs can reach millions of customers across the globe while making global trade even easier.Do not let this opportunity slip away for the growth of your business across borders; get your IEC and start exploring today in the world market.
