Import Export Code (IEC) with FAQs

ABOUT Import Export Code (IEC Number)

Meaning of Import Export Code

IEC is a 10 digit code number, which is issued by the Director General of Foreign Trade (DGFT).It is required by any person who is into import/export business in the country. Importers \merchant cannot import goods without the Import Export Code and similarly the exporter merchant cannot avail the benefits from DGFT for the export scheme, and others without IEC.

Requirement of IEC.

IEC is required for various purposes, following are some key purposes where it is required:

1. Import and export – No importer/exporter can import/export any goods or services in course of his or its business. In easy words we can say that IEC is a
prerequisite for import and export.

2. Shipment clearance – Shipment is the final step to export goods, one needs to show IEC in order to succeed in shipment clearance

3. Custom clearance- it is a verification check process of the goods imported. Custom department is sole authority to conduct custom clearance. The person importing the
goods has to furnish IEC for successful custom clearance.

4. Payments in respect of import and export- An importer needs to furnish IEC while making payments, on the other hand exporter needs to furnish IEC while receiving
payments.

Benefits of IEC

1. It is the primary proof for a firm as an Importer/ Exporter in India.

2. Other Several benefits-IEC is basic documents for various benefits in respect of export and import from customs, DGFT, Export Promotion Council etc.

3. It acts as a license for Importing and Exporting of goods.

4. Through IEC number, Goods are cleared from the custom authorities easily.

5. IEC reduces the transport of illegal export.

6. IEC not required for personal use.

7. Worldwide market reach– IEC enables the businesses to reach worldwide market and to grab opportunities to establish business in international markets by way of export of their products
globally.

8. No Return Compliance: There is no specific compliance requirement such as annual filings or return fillings or any requirement of annual maintenance fees to be paid after obtaining IEC.
however annual renewal is required now.

Life time validity– Deleted now.

Note: Import and Export Code (‘IEC’) holders are mandated to update IEC online every year vide Notification No. 58/2015-2020 dated 12.02.2021 : DGFT- The DGFT has made changes relating to IEC. Now IEC holders are required to ensure that IEC is updated electronically every year during the April-June period. Even if there are no changes, it is to be confirmed online. IEC shall be deactivated in case of non-compliance.

What is RCMC Registration and when required?

RCMC is Registration-cum-Membership Certificate issued by the Export Promotion Council body under the Government of India. It is required for businesses that deal with the export of restricted products and those seeking concessions or benefits under Foreign Trade Policy like Duty Withdraw.

REQUIRED DOCUMENTS

PAN card of the individual or company Copy of the entity’s government ID (Driving license/Aadhar/Voter ID) Incorporation certificate/Partnership deed Personal or company’s current bank account statement Address proof (Electricity bill/rent agreement/sale deed of the office location Copy of cancelled cheque of the current account

FAQ’S ( Frequently Asked Questions )

Q.1 Is it necessary to obtain Import Export Code (IEC) for Import of goods?

Ans: It is necessary to obtain IEC code for Import. However, certain categories of importers are exempted from obtaining Import Export Code. The details regarding the categories of importers exempted from obtaining IEC may be seen at Para 2.8 of Handbook of Procedure, Vol.-I on the DGFT website.

Q.2 Is there a separate code required for Import and Export?

Ans: No separate Code is required for Import and export and the same IEC can be used for both. Many people have a wrong Idea that a separate IEC code is required, but it is not true. Only one registration is required which is mandatory for the import and export and the same IEC code can be used while importing as well as exporting. There are many benefits on obtaining IEC code for businesses.

Q.3 Is there a need to obtain IEC code for import or export of goods for personal use?

Ans: IEC code is not required for import or export of goods for personal use. The Import Export Code is mandatory only for commercial purposes and business. One can import or export goods for personal use without any registration requirement.

Q.4 What is a ‘Restricted Item’ and where are they listed?

Ans:  Those goods, import of which is permitted only with the Permission/ Licence/Authorisation or in accordance with the procedure prescribed in a Public notice/ Notification are termed as ‘Restricted’ items. The list of ‘Restricted’ items is available in the (ITC- HS) classification of import and export items and the same can viewed under the download section in DGFT website[1]

Q.5 What is ITC (HS) Code?

Ans: The ITC (HS) Code is known as Indian Trade Classification (Harmonised System) Code which was adopted in India for exporting importing operations. An 8 digit ITC (HS) Code is used by the Indian customs for the national trade requirements.

Q.6 How to find HS code for a product?

Ans: To know the HS code for a product, click on the ‘ITC (HS) based policy’ on the official website of DGFT. An ITC (HS) query form will get open in a new window. Insert the product’s name in the description option o know the HS Code of the product. If, one is already aware of the HS code and wants to know the product, then enter the ITC (HS) code option to know the product.

Q.7 Is there a need to file returns for IEC?

Ans: The IEC code is required at the time of exporting or importing or receiving or paying payments. There is no need to file returns for IEC as there are no post registration compliances.

Q.8 What is Foreign Trade Law?

Ans: The India’s foreign trade legislation is controlled by the Foreign Trade (Development and Regulation) Act, 1992. Through this policy, the Indian government permits the imports into India and encourages exports from India.

Q.9 Why is Import Export business regulated by the Government?

Ans: The government imposes restrictions on imports and exports for the following reasons: –

Q.10 Protect the morals of the public.

Ans: Protect the lives of the humans, animals and plants.

IPR protection.

To maintain the artistic, historic and archaeological value of national treasure.

To conserve the exhaustible natural resources.

To discourage and limit the trafficking of war related items, weapons and illegal drugs.

Prevent the use of prison labour.

Q.11 What are the conditions in which IEC code is not required?

Ans: IEC Code is not required when: –

The import and export is done by the government departments

The import and export is done by certain notified charitable NGOs.

Products for personal use are imported or exported.

Q.12 Is IEC registration required despite having GST?

Ans: It is necessary for every person who imports or exports to obtain IEC registration. It is necessary to register with DGFT department even if the business is registered under GST.

Q.13 How much time it takes to reflect my New IEC on ICEGATE?

Ans: On real-time basis reflects the data on ICEGATE once the IEC gets issued to you

Q.14 Is IEC required by Service Exporters?

Ans: IEC shall be not be necessary except when the service provider is taking benefits under the Foreign Trade Policy.

Q.15 What is the fee for IEC?

Ans: Application fee to get IEC is Rs. 500/-

Q.16 What is the validity of IEC?

Ans: IEC allotted to an applicant shall have permanent validity but it is mandatory to update the IEC annually so that the IEC is not deactivated. If the IEC is updated between April-June period each year, no fee shall be charged for updating of IEC.

Q.17 What happens if the IEC is not annually updated?

Ans: In case of non-updating of IEC within the prescribed time, it will be de-activated. An IEC so de-activated may be activated, on its successful updating. This would however be without prejudice to any other action taken for violation of any other provisions of the FTP.

Q.18 Is there any tax levied based on IE Code?

Ans: IE Code is not a tax registration. However, certain customs duty may be levied depending on the product.

Q.19 Does Custom department use IEC?

Ans: Yes, IEC number is reflected in all customs documents related to exports and imports.

Q.20 How to cancel IEC?

Ans: IE code can be cancelled by initiating a formal request to the DGFT online. On receipt of such intimation, the authorities will cancel it electronically.

Q.21 Is company registration required to get IEC?

Ans: No, there is no need for a customer to start a company to apply for IEC Certificate.

Q.22 What is Merchandise export from India (MIES) scheme?

Ans: Under the MEIS Scheme, numerous rewards and incentives are provided to exporters. Such incentives are given to exporters at a prescribed rate which varies from product to product.