1. Introduction to Import and Export Code (IEC).
IEC is a 10 digit alphanumeric registration number issued by DGFT (Directorate General of Foreign Trade). Every importer and exporter irrespective of form of business organization is required to obtain IEC. Import and export business are of critical importance for growth and development of any country, therefore it is necessary to have control and supervision on import, export and activities connected and associated therewith. Therefore keeping in mind the same government of India has introduced a mandatory requirement to have IEC for the trade/commerce/business of import and export. Let me also tell you that as per an analysis India is the 17th leading country for exporters and 11th leading country for importers.
2. Requirement of IEC.
IEC is required for various purposes, following are some key purposes where is required:
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.
Shipment clearance –Shipment is the final step to export goods, one needs to show IEC in order to succeed in shipment clearance
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.
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.
3. Benefits of IEC
Practically IEC is a bouquet of benefits to its holders, especially for exporters, some of the benefits are specified as follows:
Global Competitiveness- A person holding IEC is free to import and export subject to compliance of other terms and conditions, he can compete in global market with others, so in this manner IEC provides global competitiveness to its holders
Benefits of government schemes- Export plays an important role in development of economy of a nation, that’s why government of India always provides various benefits in order to promote more and more export from India. Government of India provides benefits in form of custom duty exemption, GST exemption, Duty drawback, Rebate and deduction under income tax and through various other means.
Zero maintenance– A person holding IEC feels very convenient in such a way that IEC do not require any periodic maintenance like annual compliances or annual filing.
Life time validity– unlike other registrations, IEC is valid for life time. There is no requirement of periodic renewal at all.
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.
4. How to apply for IEC online
DGFT is a sole authority to issueIEC; one can apply for IEC on its website WWW.DGFT.GOV.IN . Now DGFT w.e.f 1st July 2020 has introduced a new & updated procedure to apply IEC online in which DSC would be mandatory. DSC requirement has been introduced by DGFT to strengthen IEC issuance procedure and to prevent fraud.
Documents required to apply IEC online are as follows:-
Steps to Apply IEC online
Types of DSC allowed for IEC application
|Applicant type||Class of DSC required||Necessary requirements|
|Individual &HUF||Class 2 and 3 individual based token
|Name in token must match with that of individual and organization|
|Others||Class 2 and 3 organizationbased tokens||Name in token must match with that of Director/ Partner/ Managing partner/ Managing Director as in IEC application|
So are you ready to take a step ahead for running your business in other countries and go ahead with IEC Registration? If it seems confusing or if you are stuck somewhere in the documentation, then there is no need to worry, Complianceship will be there to help you, just consult our team and get it done with ease.