IEC [Import/Export Code]

Overview

Import Export Code (IEC) is a unique 10-digit number issued by the Director-General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, Government of India. IEC registration is mandatory for any business that wants to start import or export of goods and services from India.

IEC registration is essential for engaging in import-export activities in India. Without it, such activities are illegal. The Import Export Code (IEC) is a ten-digit code issued by the Directorate General of Foreign Trade (DGFT) upon application and payment of prescribed fees.

This code acts as legal clearance for exporters and importers in India, and it must be affixed on various shipping documents for customs clearance. Obtaining IEC registration is mandatory for entities starting an export-import business, as well as for manufacturers who export their products or import raw materials for manufacturing. It’s a crucial requirement that cannot be overlooked.

The Directorate General of Foreign Trade requires the following entities to obtain IEC registration in India:

1. Exporters and importers
2. Export houses
3. Manufacturer cum exporters
4. Production facilities importing raw materials
5. Importers of goods seeking special authorization from DGFT
6. Entities intending to engage in EXIM business

It’s important to note that IEC registration is only available to registered entities in India. Therefore, ensure that you have a business certificate before starting the IEC registration process

Features of Import Export Code (IEC)

The Import Export Code (IEC) is a crucial requirement for businesses engaged in international trade, offering several essential features:

1. Mandatory Requirement:
   • IEC Registration is mandatory for businesses involved in import and export activities. Without it, these activities cannot be legally undertaken.
2. Legal Evidence and Testament:
   • IEC Certification serves as legal evidence that the business complies with the Directorate General of Foreign Trade (DGFT) requirements, facilitating smooth operations.
3. Lifetime Validity:
   • IEC requires only one-time registration, providing lifetime validity for the registered business entity. This eliminates the need for periodic renewal and reduces administrative burden.
4. Minimal Compliance Requirements:
   • Once registered, businesses face minimal compliance obligations under the IEC framework, streamlining operational processes.
5. Facilitates Foreign Bank Transfers:
   • IEC is mandatory for businesses engaged in foreign transactions, ensuring compliance with regulatory requirements during foreign bank transfers.
6. Universal Application:
   • IEC can be utilized by all types of business entities for conducting various import and export activities, fostering international trade participation.

Benefits of IEC registration:

• Enables businesses to start export/import of goods and services.
• Avail various benefits from the DGFT, customs and export promotion councils.
• Avail various benefits from the banks and financial institutions.
• Avail various benefits under the Foreign Trade Policy.
• Helps in expanding the business globally.

Eligibility for IEC Registration

Import Export Code (IEC) registration is essential for businesses engaged in global trade. Below are the eligibility criteria for importers, exporters, and proprietors to obtain IEC registration:

1. Importers

• Requirement: Must obtain IEC to import goods into India.
• Customs Clearance: IEC must be mentioned during customs clearance.
• Bank Requirement: Banks demand IEC for international money transfers.

2. Exporters

• Requirement: Exporters need IEC to export goods from India.
• Shipment Requirement: IEC codes must be quoted for shipments.
• Bank Requirement: Banks require IE Code for receiving foreign money.

3. Proprietors

• Eligibility: Individual business owners can obtain IE Code in their name.
• Company Formation: Forming a company is not mandatory for obtaining IE Code.

Documents required for IEC registration

When applying for IEC registration online via the DGFT portal, applicants must submit the following documents:

1. Partnership Firm

• Copy of Partnership Deed
• Applicant’s Digital Photographs (9)
• PAN Card
• Personal Identification (Copy of Passport, Voter ID, Driving License, Aadhar Card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, Utility Bills, etc)
• Bank Certificate in ANF 2A Form

2. Sole Proprietorship

• Applicant’s Digital Photographs (9)
• PAN Card
• Personal Identification (Copy of Passport, Voter ID, Driving License, Aadhar Card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, Utility Bills, etc)
• Bank Certificate in ANF 2A Form

3. Private Company & LLPs

• Applicant’s Digital Photographs (9)
• PAN Card
• Partnership Deed for LLP & MoA and AoA for Private Limited Company
• Personal Identification (Copy of Passport, Voter ID, Driving License, Aadhar Card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, Utility Bills, etc)
• Bank Certificate in ANF 2A Form

4. Hindu Undivided Family (HUF)

• Applicant’s Digital Photographs (9)
• Karta’s PAN Card
• Personal Identification (Copy of Passport, Voter ID, Driving License, Aadhar Card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, Utility Bills, etc)
• Bank Certificate in ANF 2A Form

5. Trust

• Trust Registration Certificate
• Trust Deed Copy
• Applicant’s Digital Photographs (9)
• PAN Card
• Personal Identification (Copy of Passport, Voter ID, Driving License, Aadhar Card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, Utility Bills, etc)
• Bank Certificate in ANF 2A Form

IEC registration process:

Obtain a Class-2 Digital Signature from a certified agency, which includes details like the owner’s public key, name, expiration date, issuer’s name, serial number, and issuer’s digital signature.

• File an Application Form on the DGFT online portal after creating a legitimate account. Provide accurate details and address the registration formalities.
• Submit the requested paperwork in the prescribed format during the application process. Ensure all necessary documents are uploaded as prompted.
• Pay the application fees through the designated payment section upon submitting the application form.
• Upon submission, the concerned authority will inspect the application and paperwork for legal compliance.
• If everything is in order, the authority will grant the IEC registration, allowing you to engage in import-export activities legally.

IEC registration remains valid indefinitely without the need for renewal. However, it can be canceled under specific circumstances, including:

1. Exporting or importing prohibited items.
2. Providing false information to customs authorities through fabricated shipping documents.
3. Failure to comply with customs directives.
4. Violating regulations outlined in the Foreign Trade Policy.

Types of Businesses Requiring Import Export Code (IEC)

Certain types of businesses are required to obtain Import Export Codes (IEC) for conducting import and export activities. These include:

• Sole Proprietorship
• Partnership Firm
• Limited Liability Partnership Firm
• Hindu Undivided Family (HUF)
• Private Limited Company
• Society
• Trust

Exemptions from Import and Export Code (IEC)

Before applying for the IEC registration certificate, applicants should consider the following exemptions:

1. Personal Use:
   • Businesses involved in import and export for personal reasons, excluding commercial, agricultural, or manufacturing purposes.
2. Nepal and Myanmar:
   • Importers or exporters dealing with goods to/from Nepal and Myanmar, with single consignments not exceeding Rs. 25,000 in value, through designated ports such as Nathula, Gunji Namgaya, and Shipkila, and Indo-Myanmar border areas.
3. SCOMET Items:
   • As per Appendix-3, Schedule 2 of ITC (HS) Classification of Export and Import Items, exemptions apply to materials, organisms, special chemicals, equipment, and technologies (SCOMET) for which IEC is not required.

GST under the Import Export Code (IEC)

Under the Goods and Services Tax Act 2017, GST is levied on imported goods and interstate trade. Each transaction requires a GSTIN number. The Permanent Account Number (PAN) serves as the IEC number. Government institutions involved in import and export processes are exempt from needing an Import Export Code.

How Corporate Raasta Consulting can help you with the process

Corporate Raasta Consulting, a legal and tax compliance company, offers comprehensive assistance to businesses seeking IEC registration. Leveraging our expertise, we guide businesses through the entire registration process, ensuring a clear understanding of requirements and procedures. We also assist in preparing and organizing the necessary documents, including business certificates, identification papers, and proof of address, and handles the submission of the IEC registration application.