To successfully transact an import or export transaction, you need to follow specific rules and laws. In India, Import Export Code (IEC) is one of the most important requirements for both import & export business. It is also known as Importer-Exporter Code
What is IEC ?
An IEC is a 10-digit code allotted to a person that is mandatory for undertaking any export/ import activities issued by DGFT
No export or import shall be made by any person without obtaining an IEC
Now-a-days IEC is PAN based (XXXXX1234X)
Benefits of IEC
Expand your business – You can expand your business by purchasing and selling products and services in the global market
Government Incentives – You can receive several benefits from DGFT, as Government of India always promotes and supports Exporters
Easy Processing – You can obtain the IEC code within 5 to 15 days. Moreover there is no obligation to import or Export after obtaining the IEC
No Reporting – There is no requirement of any return filing
When is IEC required
When the Importer has to clear the goods from the Customs Authority, IEC is required
When the importer sends money outside India, IEC is required by the Bank
When the Exporter has to send goods outside India, IEC is needed by the Customs Port
When the Exporter receives money in foreign currency, IEC is required by the Bank
Your IEC will get deactivated
You won’t be able to Import or Export from 01st July, as your IEC will be De-activated.
DGFT has mandated all IEC holders to update their IEC every year between April to June as per Notification No. 58/2015-2020 dated February 12, 2021 – DGFT.
Update your IEC to ensure smooth Import & Exports. After 01st July 2023, IEC can be Re-activate only after updating on DGFT. Even where there are no changes in IEC details, the same also needs to be confirmed online
Tip for Exporters:
Exports and Refunds under GST on : All you need to know about Refunds under GST regime
Risky Exporter Alert (New Rules) : Risky Exporter Alert: All you need to know!
FAQ on IEC
Q.) Is there any tax on IEC ??
No
Q.) Do I need to mandatorily export or import after obtaining IEC ??
No, there is no import or export obligation
Q.) Do you need to renew IEC ??
As such you need not renew the IEC, however you need to update it every year before 30 June
Q.) Do I need to file any returns ??
No, once, an IEC is issued there are no further procedures required to maintain validity of the IEC. Even if import or export transactions occur, there are no filings required
****
I am CA Sachin M Jain, practising Chartered Accountant from Mumbai, dealing in GST & Customs. Specialised in GST, mainly dealing with Exporters and Real Estate clients for Advisory, Refunds, Review and Appeal. You can connect with us on +91 8097515447 and casachinmjain@gmail.com
Author Bio
