Suhail Anjum Siddiqui, Advocate

In case you are going to start export or Import business of goods or service and both are required certain approval and registration with Reserve Bank of India, Custom Department, Central Excise, Service Tax and Value Added Tax / Central Sales Tax Department. These departments imposed certain conditions to avail tax exemption one of important condition is to obtain registration with the Controller of Foreign Trade. So, it is important to oblation registration with the Controller of Foreign Trade, which is called Import Export Code Number. Before planning exporting goods or services, a business man or tax advisor should ensure registration otherwise take following steps prior to start export, import of service and goods:

1. Before starting any business a person should decide character of business entity ,which may be one of the following legal entity:

a. Proprietorship

b. Partnership

c. A.O.P.(Association Of Person) or body of individuals (incorporated or not)

d. H.U.F.(Hindu undivided Family)

e. Trust

f. Cooperative Society

g. L.L.P. (Limited Liability Partnership)

h. Private Limited Company

i. Public Limited Company

Proprietorship is a oldest and most independent method of doing business. The proprietorship business commencing under the seal and signature of individual, with the individual’s name or any other name as the individual take decision.

Partnership firm is governed by the Indian Partnership Act, 1932. Indian Partnership Act prescribe minimum and maximum limit of partners. Partnership firm can be formed with two individuals but maximum limit of partners shall not be more than twenty. It may start from any specific date and determinable at/on specific date or at will. The partnership firm is run under an agreement between partners; it is always favorable to reduced in writing on specific stamp paper which is differing from State to State. Although Partnership deed’s registration is not mandatory but registration with registrar of Firm is always good and preferable.

A.O.P. is an abbreviation of Association of Person, although it is not governed by any specific law but it form by an agreement between the member of A.O.P. It is more and less as a partnership firm. The agreement shall be registered with sub registrar. A.O.P. performs business collectively for specific purpose. The Income Tax Department recognizes A.O.P. and its taxable rate is as an individual.

H.U.F. is an abbreviation of Hindu Undivided Family, Generally, Indian people except Jain Sikh, Muslim and christen or having faith in any other religion except Hindu are eligible to form H.U.F. It is recognized by the Hindu Law. It is recognized by the Income Tax department and other business related Indian Department as a separate legal entity. It managed by a eldest male member of the family called KARTA and other member of the H.U.F. is called Coparcener. Coparceners are those members of the HUF, who can ask their share from the HUF property or business and eligible to form H.U.F. individually after marriage with Hindu girl .

One or so many settlers can settle trust, which is managed by the trustees. Trusts are two type one Public Charitable Trust and Private Discretionary Trust. It is misapprehension that the trust can run only charitable, social and educational activity. Charitable, social and educational activates are performed by the public Charitable trust. Any organization could not perform such activities without financial resources and then there is no harm in doing business activity. In my opinion for attaining the purposes/ objects trust can perform business activities also. Before, settling a trust, setter should keep in mind that the trust cannot dissolve but can be merge/ amalgamate with the trust having similar objects. Trustee’s could not get financial gains from the trust property or business otherwise may lose Income Tax Exemptions.

Cooperative Society is greatly unique method of doing business or work. Co-operative Societies main purpose to do work/ business collectively with limited capital resources and expertise of its member. There are two level of Societies, one is governed by the Multi State cooperative Societies Act, 1984, it is central act extended to whole of country and the society registered in this act can work at national level (All Indian State) with the head/ principle office at one place. Another is State level Act like The Delhi Cooperative Societies Act, 1972. Societies registered at state level are confined with one state. Cooperative Society can form with minimum seven members and there is no upper limit. Members of the Society are called share holder with the limited liability and its registration is mandatory.

Limited Liability Partnership is a newly introduced concept in India in the year 2008. It is central Government Act namely the Limited Liability Partnership Act, 2008 and its rules are the Limited Liability Partnership Rule, 2009. During formation of Limited Liability Partnership, it require to get reservation of its name and then to file all papers electronically as well as heard copy of papers along with the prescribe fee.

Private Limited Company is an artificial creation of a judicial person governed by the Indian Companies Act, 1956. It is Central act. A Private limited company can be formed with minimum two people or artificial persons and maximum limit is fifty. Capital is divided into shares duly subscribed by its share holder; they may be friends and family members. Share holder can get profit by way of dividend. Its registration is mandatory. First of all its name is approved by the Registrar of companies and then file papers along with prescribe fee by the promoter director.

Public Limited Company is more or less same as the Private Limited Company it is formed under the same act but it required minimum numbers of promoters are Seven and there is no maximum limit of share holder. It is differently managed from Private Limited Company, after its formation, it requires to obtain commencement of business certificate.

It is advisable before deciding character of the business entity one must take serious consideration about its name, its partner/ member and share holders because these people pay significant role in running the business. Secondly, Government compliances should be minimum.

2. The second step is to obtain PAN card from the Income Tax Department. In case it is proprietorship, it require proof of Identification as well as residential proof with two photograph, Partnership required only copy of partnership deed, A.O.P. required proof of Identification and residence proof of all members, Identity proof and residence proof of Karta and Trust, Cooperative societies, Limited Liability of Partnership and Public Limited Company required proof of Incorporation and karta, CEO, managing trustee’ identity and address proof along with Income Tax Form 49A.

3. Third step is to open Bank account, if the business is in the name of business entity bank open current account while in the individual, cooperative society and trust can operate saving bank account.

4. After completing all above formalities, If a business entity is starting business of export/ import of commodities and willing to chew fruit of export, he should obtain Value Added Tax and Central Sales Tax Registration, the taxability on purchase and sale will be NIL. He can purchase Goods against form “H” without paying Tax. If the goods are dutiable under Central Excise, exporter/importer should get registration with Central Excise Department. In case he is service provider/ recipient of export/ import services outside/inside India against convertible foreign exchange. The service provider/ recipient should obtain Service Tax registration, these export of services are exempted under the Rule 3 of the Export of Service Rule, 2005.These days Value Added Tax Department insisting for PAN number while Service Tax as well As Central Excise are providing PAN base registration number.

5. After completing all these registration formalities before exporting/importing of goods or services one has to obtain registration with The Controller of Foreign Trade. The Controller of Foreign Trade established Zone wise offices to facilitate public at large, where an exporter/importer can obtain EXPORT and IMPORT CODE.

a. For obtaining Import and Export Code, application called ANF-2A is prescribed, it is divided into four parts i.e. A,B,C and D. The ANF-2A should fill carefully and avoid cutting and correction. If there is any correction, it is duly signed or attested by the authorize person.

b. Part-A is as simple as any other application but it required to past one photograph identical as attested by the Banker.

c. Part-B is a Performa for the purpose of Banker, it must printed on the Banker’s letter head, with authorize person’s photograph duly attested by the bank official with email address.

d. Part-C, is specifically for modification, in case new application, need not to fill first and second point otherwise it must be completed and signed by the authorize person.

e. Part-D is declaration, which is duly signed and filled by the authorize person.

Note: Authorize person may be self Proprietor, authorize partner, Authorize director or authorize CEO/ manager etc.

6. All the pages of application should be signed by the Proprietor, authorize partner, Authorize director or authorize CEO.

7. Fee for registration/ code number is Rs. 250/- by way of draft in favour of Zonal DGFT (CLA)………(Place of Zonal Office)

8. The following documents Should be self attested by the applicants:

I. Photo Copy of Identity proof of applicant.

II. PAN copy of business organization and if it is proprietorship firm then proprietor’s PAN photo copy.

III. Two Additional photograph of proprietor/ authorize person (without any attestation identical as bank attested).

IV. Photocopy of Excise Registration, service Tax registration or VAT registration as applicable.

V. A self address Envelop duly pasted Rs. 30/- post Office stamp.

9. An authorization letter in favour of person submitting documents with his signature, attested photograph and his telephone number, duly attested by the applicant.

10. A covering / request letter mentioning the documents are filling with the application.

All above mention application and document should present within a heard board file cover.

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0 responses to “How To Start Export-Import ‘Business or Services’ In India”

  1. B RADHAKRISHNAN says:

    If you want to start an import export business, there are so many things that you need to consider. You should be well versed with the different facets of the industry and you need to possess the right knowledge.

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  2. Amit Dohara says:

    Hello sir ,

    I want to start an export garments business as a agent and later on as a manufacture. Please guide me how to start and what formalities are required in this. i dont have office or compant in india or abroad. is there any CA involove in this process .
    Last,how much time it takes to get all the documentation done if i start now ,,,consider today i have only plan in my mind and no other documents.

  3. Nilesh Malavia says:

    What are the licenses and approvals required before starting export of commodities and import of commodities business from India ?

    (2) While exporting commodities, whether the regulations of importing countries have to be complied by us or is it the responsibility of the importer ?

  4. R L AKSHMI NARAYAN says:

    RESPECTED SIR/MADAM,

    BLESSED DAY. .

    WE ARE NARAYANAN CONSULTANCY IN BANGALORE , WITH

    PROFESSIONAL LEADERS AD HAVING A PRACTICAL EXPERIENCE IN

    THIS FIELD FOR MORE THAN 30 YEARS.

    WE HEREBY TAKE UP THE FOLLOWING WORKS.

    1. OBTAINING IMPORT – EXPORT CODE NUMBER FROM DGFT.

    2. SEZ , EOU SETTING AND ESTABLISHMENTS OF NEW UNITS.

    3. CENTRAL EXCISE REGISTRATION/ CERTIFICATE FOR THE
    MANUFACTURING COMPANY /TRADER.

    4. SOURCING FOR NEW COMERS THOSE WHO ARE NEW TO THE FIELD.

    5. FOR OBTAINING SMALL SCALE INDUSTRIES CERTIFICATE FROM DIC.

    6. VAT REGISTRATION.

    WE HELP/ GUIDE THE NEW COMERS TO THIS FIELD IN EVERY ASPECTS.

    AND HELP / GUIDE IN ALL ASPECTS WORKS WITH RESPECT TO EXPORT – IMPORT.

    KINDLY CONTACT US 072084292820 / 08904788518.

    OR MAIL US @ LN140559@GMAIL.COM

    / RLNARAYANAN140559@GMAIL.COM

    PLEASE NOTE :-

    TIME PASSERS CAN NOT BE ENTERTAINED .

    THIS IS FOR THOSE WHO ARE VERY SERIOUS ABOUT THEIR
    BUSINESS/ COMPANY IN THE FIELD OF EXPORT – IMPORT .

    REGISTERATION WITH US IS MANDATORY.

    * terms & conditions apply.

    * A UNIQUE CONSULTANCY PROVIDING SERVICES AROUND INDIA *

  5. rl narayanan says:

    RESPECTED SIR/MADAM,

    GOOD DAY. .

    WE ARE NARAYANAN CONSULTANCY IN BANGALORE , WITH PROFESSIONAL LEADERS AD HAVING A PRACTICAL EXPERIENCE IN THIS FIELD FOR MORE THAN 25 YEARS.

    WE HEREBY TAKE UP THE FOLLOWING WORKS.

    1. OBTAINING IMPORT – EXPORT CODE NUMBER FROM DGFT.

    2. SEZ , EOU SETTING AND ESTABLISHMENTS OF NEW UNITS.

    3. CENTRAL EXCISE REGISTERATION/ CERTIFICATE FOR THE MANUFACTURING COMPANY /TRADER.

    4. SOURCING FOR NEW COMERS THOSE WHO ARE NEW TO THE FIELD.

    5. FOR OBTAINING SMALL SCALE INDUSTRIES CERTIFICATE FROM DIC.

    6. VAT REGISTERATION.

    WE HELP/ GUIDE THE NEW COMERS TO THIS FIELD IN EVERY ASPECTS.

    AND HELP / GUIDE IN ALL ASPECTS WORKS WOTH RESPECT TO EXPORT – IMPORT.

    KINDLY CONTACT US @ 07204292820 / 08904788518.

    OR MAIL US @ LN140559@GMAIL.COM
    / RLNARAYANAN140559@GMAIL.COM

    PLEASE NOTE :-

    TIME PASSERS CAN NOT BE ENTERTAINED .

    THIS IS FOR THOSE WHO ARE VERY SERIOUS ABOUT THEIR BUSINESS/ COMPANY IN THE FIELD OF EXPORT – IMPORT .

    REGISTERATION WITH US IS MANDATORY.

    * terms & conditions apply.

    * A UNIQUE CONSULTANCY PROVIDING SERVICES AROUND INDIA*

  6. Inder Chand Aggarwal says:

    I want to confirm that IEC code does not limit any trade. We can export/import any permissible and legal product. i.e. chemical/readymade garment/stone/toys/electronic/electrical/gift item/stationary items, all can be exported/imported under same IEC code unless and otherwise it is restricte or prohibited by Govt. of India.

  7. Nimesh Suthar says:

    Dear sir,

    Please guide me for start import export services as agent..

  8. Saba Alam says:

    Hello,

    I want to start an export garments business. Please guide me how to start and what formalities are required in this.

  9. Ajay says:

    Dear Sir,

    I want to send loose gemstones to Russia, USA, UK etc. I have IEC code. Can you please guide me how to send loose gemstones to clients? Do I need more licenses or registrations with government departments? Can I send gemstones via IndiaPost speed post, if ye, how? any formality ??

    Thanks

  10. THAKKER JALPESH J says:

    Hello Sir,

    I want to start export buisness of food product from ahmedabad, above all information I have reffered. I want to related another details

    Regards,
    JALPESH THAKKER
    9925185919

  11. Kishor Bhatt says:

    To. ABHI
    Further to my last communication, please note that the SOFTEX Procedure is not applicable in case the Web Development is to be considered to be the “Export of Services”.

    In terms of para 2.8(a) of Hand Book of Procedures Vol – 1, IEC is compulsory for import and / or exports, except the categories of importers or exporters exempted from obtaining IEC under the subject para.
    In this connection, you may also refer the ‘FOREIGN TRADE (EXEMPTION FROM APPLICATION OF RULES IN CERTAIN CASES) ORDER, 1993 issued by Ministry of Commerce’
    Regards – KISHOR BHATT

  12. Kishor Bhatt says:

    To, Mr. Suhsil Anjum Siddiqui, Advocate. Nice Article. However, I may state here that there is no separate registration with Reserve Bank of India and Customs Department. The Importer Exporter Code Number (IEC Code) issued by the Regional Offic of Director General of Foreign Trade, New Delhi serves the function of registration with RBI, Customs, etc. The correct nomanclature of “CONTROLLER OF FOREIGN TRADE” is “DIRECTOR GENERAL OF FOREIGN TRADE” (DGFT). The head quarter of DGFT is at New Delhi. The DGFT has got Regional offices in about all states of India. For yor information, I am Kishor Bhatt, a consultant in International Trade. I have authored few books on the subject and a faculty in many MBA Colleges and Bank training institutes at Ahmedabad. Presently I am on tour to USA – and to reach Ahmedabad in the middle of October. My e.mai address iis kishor_hbhatt@yahoo.co.in. Thanks. KISHOR BHATT

  13. Kishor Bhatt says:

    To, Mr. Mohit Bhatnagar, The shipment / dispatch of cargo and passing it through Customs, is very much a technical and complecated job. Accordingly, it is very much requires the services of Clearing – Forwarding Agent. The CHA. They are the Government licenced Customs House Agents. They provide the services from picking up of the good from the warehouse to actual shipping on the vessel, including Customs formalities, Certain reporting requirements under FEMA, Assessment and payment of duties, Stuffing of cargo into the containers. For further details you may refer the book ” CLEARANCE THROUGH INDIAN CUSTOMS” by Mr. Naval H Mehta – if available in the market. Actually, I have recently updated the subject book and the same is under print. I may state that I am a consultant in International Trade,settled at Ahmedabad and faculty at many MBA Colleges and Banks in Ahmedabad. At present I am in USA and I am to return to India in the middle of October – 2012. In the meantime you may contact me on e.mail kishor_hbhatt@yahoo.co.in KISHOR BHATT

  14. Kishor Bhatt says:

    To C A VIJAY. If you can advise me the commodities you are dealing in, perhapse, I may help you in the matter. For your information, I may state here that I am a Consultant in International Business, settled at Ahmedabad. However, at present I am on a tour to USA. I am to return to Ahmedabad in the middle of October. You may contact me on e.mail – kishor_hbhatt@yahoo.co.in – KISHOR BHATT

  15. Kishor Bhatt says:

    To ABHI

    – The Company working as Web Development requires Importer Expoorter Code Number and also the same is required to be quoted on the SOFTEX Form to be reporterd.
    The Company is also required to report the export transaction on SOFTEX Form. It is difficult to provide full information here. You may hoowever, contact me on my e.mail address kishoe_hbhatt@yahoo.co.in . I may state here that I am a Consultant in International Trade, settled in Ahmedabad, However at present on a tour to USA. – KISHOR BHATT

  16. L.P.Sanadhya says:

    Dear Mr. Siddiqui, Good initiative for giving very helpful guidelines in the subject. Pl. avoid gramatical and spelling errors.
    Thanks and regards, L.P.Sanadhya Ipca Laboratories Ltd.

  17. manish says:

    Hello Mr.Siddiqui ,
    the article is informative .
    i want to ask same question as abhi asked what abt. a company is working as web development for client based outside India. They get their payment through foreign exchange .
    is there any requirement with regards to service tax and
    any formalities to be done in bank abt foriegn exchange recd. 
    Thanks

  18. M.I. Shariff says:

    Mr. Suhail Anjum jee, Thanks for the article it is very eduacating and full of information,
    Looking forward for many more such articles. Thanks once again

  19. CA Vijay says:

    Dear Sir,
    I have taken the above licence but its very difficult to get the Foreign orders whats the procedure for marketing I am not getting proper person though I am Chartered Accountant.
    Regards,
    CA Vijay
    9422026268

  20. Advocate,Gourav Mishra says:

    good for us to know  more about registration method
    thanks a lot

  21. Vineet Jain says:

    Dear Mr. Siddiqui,
    in HUF definition above you excluded Jain Sikh, Muslim and christen, which is not correct. it does include Jain and Sikh atleast. we need to be very careful while giving such defination in public domain.

  22. Basava tax consultant says:

    Dear all
    Its good article
    For any  additional info  and services related start new company (as above stated) may contact in Bangalore on maid  (plan.savetax@gmail.com) 

  23. mandar says:

    very very helpful…..

  24. Mohit Bhatnagar says:

    Thanks for your valuable article 
    Please let me know how to deal with the custom authorities at the time of export 
    I am a Ca Final Student i have read much about export procedure but
    it is told by everyone that for exporting goods you must take services of a clearing agent.

    Waiting for your valuable reply
    Mohit Bhatnagar 

  25. ABHI says:

    Hello Mr.Siddiqui ,
    Thanks for the article .Quite good.
    One question in this regard is that ,a company is working as web development for client based outside India. They get their payment through foreign exchange .So do they require STax registration and Import-Export Code.
    Thanks

  26. Amit says:

    Thanks its very useful information to start a new business.

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