IEC is a necessity for any business in India that aspires to engage in foreign trade. This unique 10-digit code, given by the Directorate General of Foreign Trade under the Ministry of Commerce, makes all imports and exports possible. Thus, whether you are looking forward to expanding your business or making your current operations much easier, an IEC code is the first step in unlocking international opportunities.
In this blog, we break down the IEC registration process, its importance, required documents, and more, all to outline exactly how businesses like yours might just benefit from it.
What is THE Importer Exporter Code (IEC)?
IEC is a business identification number that is compulsorily required for importing goods into or exporting goods from India. Importers are unable to clear customs without an IEC code, and exporters are unable to get payments from their overseas clients without an IEC code.
Once issued, this number is considered valid for one’s lifetime and, by implication, reduces international trading compliance hassles. A business in the form of a proprietorship, partnership, LLP, company, trust, or society may require the IEC to be taken.
Why is the IEC important for your business?
An IEC opens up the world market for business enterprises, which no other avenue can offer. Here is why it is important to obtain an IEC:
1. Facilitates International Trade:
Importers use IEC for the clearance of customs, and exporters take help of IEC in carrying out smooth business transactions with foreign clients.
2. Access to Government Benefits:
An IEC thus enables an exporter to avail of subsidies, tax exemptions, and other export incentives offered by the Government and Export Promotion Councils.
3. Prevents Legal Issues:
Without an IEC, no business can export or import legally, and without that, they are subject to penalties and will not be able to expand globally.
4. Lifetime-Validity:
IEC, once issued, is valid for the lifetime of an entity and no renewals or compliances are required periodically.
5. Fosters Transparency:
Compulsory disclosure of genuine business information will help the fulfillment of regulations and minimize the chances of unlawful trading activities.
Prerequisites for IEC Registration
Before applying for an IEC code, business applicants must meet the following specifications:
- Valid PAN: The company must possess a valid Permanent Account Number assigned by the Income Tax Department.
- Bank Account in the Firm’s Name: The applicant must have a bank account under the firm’s name.
- Address Proof: Firms will need to show proof of address. These are electricity bills, rent agreements, and property sale deeds. For proprietorship, even an Aadhaar or passport would work as an address proof.
- Active Login Credentials: An application has to get him or herself registered at the DGFT portal before the application for an IEC.
Documents required for IEC Registration
Some of the important documents required to be submitted for IEC registration are as follows:
1. Proof of Establishment or Incorporation:
- Partnership Deed (for partnerships)
- Incorporation Certificate (for companies)
- Trust or Society Registration Certificate
2. Proof of Address:
- Sale Deed or Rent Agreement
- Electricity or Mobile Bill
- Aadhaar, Passport, or Voter ID in case of proprietorships
3. Proof of the firm’s bank account
- Canceled Cheque
- Bank Certificate
4. Digitally Signature Certificate (DSC):
- An online submission needs an active DSC or Aadhaar of the authorized signatory of the firm.
IEC Registration: A Step-by-Step Process
The process for IEC registration is quite smooth and completely online via the DGFT portal. Here’s how you can apply:
Step 1: Registration at DGFT Portal
Creation of an account on the DGFT portal based on your PAN details and valid email ID.
Step 2: Application Form
Log in and fill out the IEC application form by furnishing details of the firm, bank, and business activities.
Step 3: Required Documents Upload
Attach scanned copies of all the required documents, including proof of establishment, address, and bank account details.
Step 4: Payment of Application Fee
Make the payment of the IEC registration fee online through the portal.
Step 5: Application Submission and Following
Once submitted, the application will undergo processing by the DGFT. You can check for status online and, when approved, download your IEC certificate.
Key Features of the IEC
1. One-Time Registration:
IEC registration is a one-time process and does not require any renewal.
2. Hassle-Free Compliance:
Unlike other registrations, IEC does not require any annual filings or compliance requirements.
3. Universal Applicability:
IEC would, therefore, apply to all import and export transactions that are affecting the firm.
4. Modification and Cancellation:
Firms will be able to amend-cancel their IEC registration as and when needed through www.dgft.gov.in.
Additional Processes for Managing IEC
Following are the DGFT services to manage your IEC:
- Profile Link: Existing signed users can also link the existing profile for better management onto IEC.
- Amendment: The firms can modify their IEC details online in case of any change in the address, bank details, or firm structure.
- Revocation/ Surrender: An IEC can be surrendered / revoked in case the firm is no longer pursuing international trade activities.
- Request Removal from DEL: The individuals present on the Denied Entity List may apply for their removal and proceeds with their trade dealings accordingly.
Endnote
The iec code is your gateway to entering the global marketplace and scaling your business. Its lifetime validity, straightforward registration process, and benefits make it an indispensable tool for importers and exporters.
Be it a startup that wants to expand globally or a well-established business looking to enter other markets, an IEC makes international trade pretty easy. So, take a leap into the process right away and unlock limitless possibilities for your business across borders!
