When any person or entity is planning to go global and aspires to expand the business beyond the limits of the domestic market, there are various procedures and the laws, which are to be taken care of and there is a need for different registration and license. So, Import-Export Code(IEC) license is one of the mandatory requirements when one is planning for importing or exporting from India.Here is a brief note regarding what is IEC, what are the documents required, what are the steps involved in IEC registration, when it is mandatory to obtain IEC, what are the benefits and certain latest amendment pertaining to same.
What is IEC?
An Importer-Exporter Code (IEC) is a unique 10-digit alpha-numeric code which is mandatory for export of India or for Import to India. There shall be no export or import by any person or entity without obtaining IEC Code unless exempted specifically.
What are the documents for IEC registration?
- Individual’s or Firm’s or Company’s copy of PAN Card
- Individual’s voter id or Aadhar card or passport copy
- Individual’s or company’s or firm’s cancel cheque copy of current bank account
- Copy of Rent Agreement or Electricity Bill Copy of the premise
- A self-addressed envelope for delivery of IEC certificate by registered post
What are the steps Involved in IEC Registration?
- Visit the DGFT website http://www.dgft.gov.in and proceed with the Registration process.
- Enter the registration details.
- Enter the OTPs received on mobile number and e-mail id.
- Upon successful validation of the OTP, one shall receive a notification containing the temporary password which you need to change upon first login.
What are the mandatory situations for obtaining IEC?
Although IEC is required for various purposes, the following are the key purposes where IEC is required
- When an importer has to get clearance of his shipments from the customs, then it’s needed by the customs authorities for verification.
- When an importer sends money abroad through banks, then it’s needed by the bank.
- When an exporter has to send his shipments, then it’s needed by the customs port.
- When an exporter receives money in foreign currency directly into his bank account, then it’s required by the bank.
Cases where IEC is not mandatory?
According to the latest circular issued by the government, IEC is not mandatory for all traders who are registered under GST. In all such cases, the PAN of the trader shall be construed as new IEC code for the purpose of import and export. Import Export Code (IEC) isn’t required to be taken in case the goods exported or imported is for personal purposes and isn’t used for any commercial purpose. Export/ Import done by the Government of India Departments and Ministries; Notified Charitable institutions need not require getting Import Export Code.
What are the benefits of IEC?
More or less, IEC has number of benefits to its holders, exporters, some of them are as follows:
- Expansion of Business
IEC assists you in taking your services or product to the global market and grow your businesses.
- Availing Several Benefits
The Companies could avail several benefits of their imports/ exports from the DGFT, Export Promotion Council, Customs, etc., on the basis of their IEC registration.
- No Filling of returns
IEC does not require the filing of any returns. Once allotted, there isn’t any requirement to follow any sort of processes for sustaining its validity. Even for export transactions, there isn’t any requirement for filing any returns with DGFT.
- Easy Processing
It is fairly easy to obtain IEC code from the DGFT within a period of 10 to 15 days after submitting the application. There isn’t any need to provide proof of any export or import for getting IEC code.
Latest Amendment: The Director-General of Foreign Trade (DGFT)through Notification No. 58/2015-2020, dated 12th February,2021 has directed that all Import Export Code (IEC) holders are now legally required to update their IEC details every year from April to June online, even if there are no changes. An IEC shall be deactivated, if it is not updated within the prescribed time. IEC so de-activated may be activated, on its successful updation. An IEC may be also be flagged for scrutiny. IEC holder(s) are required to know that any risks flagged by the system is timely addressed; failing which the IEC shall be deactivated.