In today’s fiercely competitive business environment, there is a universal desire to expand business operations beyond domestic boundaries. The facilitation of global business has become more accessible in contemporary times, thanks to the widespread use of the internet and advancements in technology. However, engaging in international business requires adherence to various procedures and regulations, including obtaining specific registrations and licenses. One such crucial requirement, especially when dealing with imports and exports involving India, is the Import Export Code (IEC) license, also referred to as the Importer-Exporter Code.
The IEC, a 10-digit code with lifelong validity, is a prerequisite for individuals aspiring to initiate import/export activities in the country. Issued by the Director General of Foreign Trade (DGFT), this code plays a pivotal role in the import and export processes. Importers cannot bring goods into the country without the IEC, and exporters cannot access benefits offered by the DGFT for export schemes without it.
Entities eligible for obtaining an IEC include proprietorships, partnerships, Limited Liability Partnerships (LLPs), limited companies, trusts, Hindu Undivided Families (HUFs), or societies. With the introduction of the Goods and Services Tax (GST), it’s important to note that the IEC number aligns with the Permanent Account Number (PAN) of the business. However, it’s essential to recognize that PAN is not automatically synonymous with IEC, as the latter must be separately issued by the DGFT after the application process.
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Situations where IEC is required
1. Customs Clearance for Importers: The Import Export Code (IEC) is a prerequisite when an importer is in the process of clearing shipments through customs. Customs authorities require this code as part of their clearance procedures.
2. International Fund Transfers by Importers: Importers who are sending money abroad through banks are mandated to possess an IEC. Banks require this code as a crucial documentation for facilitating international financial transactions.
3. Customs Port Requirement for Exporters: Exporters need the IEC when sending their shipments from a customs port. Customs authorities overseeing the port demand this code as part of the export process.
4. Foreign Currency Receipts for Exporters: In situations where an exporter is receiving payments in foreign currency directly into their bank account, possessing the IEC becomes imperative. Banks stipulate the requirement of the IEC for proper processing of funds received in foreign currencies.
How to Apply for Import Export Code (IEC)?
To manage your IEC profile, navigate to the Services tab and select IEC Profile Management. To initiate the IEC application process, create an account and log in. Complete the application form (ANF 2A format), upload the required documents, and make the payment. Click the “Submit and Generate IEC Certificate” button to obtain the IEC code. The Directorate General of Foreign Trade (DGFT) will generate the code.
When applying for an IEC, individuals can use either their company name or their personal name. The application fee is Rs 500, payable online through e-wallets, net banking, or credit/debit cards. Both registered and unregistered organizations can apply for an IEC, and the code is typically issued within 10-15 working days. If you have a GST number, there’s no need for a separate IEC code. Your GSTIN will serve as the identifier, and at the exchange level, it will be equivalent to the PAN of the firm.
Steps involved in IEC (Import/Export Code) registration
- Visit the DGFT website.
- Click on the ‘Services’ tab on the homepage.
- Select the ‘IEC Profile Management’ option from the drop-down list.
- A new page will open. Click on the ‘Apply for IEC’ option on the page.
- Click on the ‘Register’ option. Enter the required details and click on the ‘Sent OTP’ button.
- Enter the OTP and click on the ‘Register’ button.
- Upon successful validation of the OTP, you will receive a notification containing the temporary password which you can change after logging into the DGFT website.
- After registering on the DGFT website, login to the website by entering the user name and password.
- Click on the ‘Apply for IEC’ option on the DGFT website dashboard.
- Click on the ‘Start Fresh Application’ button.
- Enter the general information, details of proprietor/partner/director/Karta/managing trustee, bank information, other details, attach Digital Signature Certificate (DSC) and make the payment.
- After successful payment, it will be redirected to the DGFT website. The receipt will be displayed. Download the receipt for future reference.
- The IEC Certificate will be sent in the email. It can be downloaded after logging in to the DGFT website and clicking the ‘Print IEC’ option under the ‘IEC Profile Management’.
Documents required for IEC (Import Export Code) registration
For IEC Code Registration, the following documents are required:
- Individual’s, firm’s or company’s copy of PAN Card.
- Proprietor’s voter ID, Aadhaar card or passport copy.
- Proof of establishment, incorporation or registration of the partnership, society, proprietorship firm, company, HUF, etc.
- Proof of address of business premise, such as sale deed, lease deed, rent agreement or utility bills (electricity bill, telephone bill or mobile bill).
- Individual’s or company’s or firm’s cancel cheque copies of current bank accounts.
- A self-addressed envelope for delivery of IEC certificate by registered post.
Cases where Import-Export Code (IEC) is not mandatory
As per the latest government circular, Import Export Code (IEC) is no longer mandatory for all traders who are registered under the Goods and Services Tax (GST). In these cases, the Permanent Account Number (PAN) of the trader will serve as the new IEC code for the facilitation of import and export activities.
Additionally, the circular specifies certain exemptions from the requirement of obtaining an IEC:
1. Personal Use Exemption:
- Import Export Code is not necessary if the goods being exported or imported are for personal purposes and not intended for any commercial use.
2. Government Entities and Charitable Institutions:
- Government of India Departments, Ministries, and Notified Charitable Institutions are exempt from the obligation of obtaining an Import Export Code for their export and import transactions.
Frequently Asked Questions on IEC (Import Export Code)
Q.1 Is IEC mandatory?
Ans. Yes, an Importer-Exporter Code (IEC) is mandatory for both importing to India and exporting from India. It serves as a crucial business identification number for entities engaged in import/export activities. Without obtaining an IEC, a person or entity is not allowed to export or import, unless there is a specific exemption in place.
It’s important to note that IEC is not required for services exports, with the exception being when the service provider intends to avail benefits under the Foreign Trade Policy. In the context of services, the necessity of an IEC is tied to the utilization of certain policy benefits rather than being a general requirement for all service exports.
Q.2 How much time does it take to get the IEC code?
Ans. Once the online application is submitted by paying the appropriate fees and requisite documents, IEC will be auto-generated. The DGFT will send the IEC Certificate to an applicant through the e-mail.
Q.3 Can individuals obtain IEC?
Ans. Yes, individuals acting as proprietors of a business can obtain IEC registration. Individuals can use either the name or the name of their company to apply for IEC registration.
Q.4 Should I update my IEC profile annually?
Ans. Yes. It is mandatory to update the IEC profile every year. In case of non-updation of the IEC profile, it will be deactivated. A deactivated IEC can be reactivated upon its successful updation. However, reactivation is subject to the condition that any other action should not be taken for violation of any provisions of the Foreign Trade Policy.
Q.5 Is Digital Signature Certificate (DSC) required to apply for IEC?
Ans. A Digital Signature Certificate (DSC) is not compulsory to apply for an IEC. The IEC application can be signed through Aadhaar authentication. DSC has been introduced in IEC to strengthen the IEC issuance and modification processes.
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Authored by Arghya Sen, 3rd year BALLB(Hons.) Student at Amity University, Kolkata
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