In the age of westernisation, every businessman looks forward to expanding their business globally. However, it is hard to expand the business beyond the limits of domestic markets as more and more complex factors come into play, which in turn makes it difficult for a businessman to meet with the same. Several procedures and laws have to be followed before going global. The IEC (Import Export Code) provides perks to the businessmen thinking of importing or exporting from and to India.
An individual who intends to begin with their import/export business will need an IEC (Import Export Code). A 10 digit code is issued by the DGFT, Ministry of Commerce and Industries, Government of India, which is known as the Import Export Code with a lifetime validity. No import and export business can be made in India without registering under the IEC. It is mandatory to obtain an IEC for the smooth functioning of import and export businesses. In the case of any service provider taking benefits under the Foreign trade policy it is mandatory to get an IEC.
An Import-Export Code is also mandatory at the time of making a payment outside India. The Reserve bank of India makes it compulsory to have an IEC before clearance of the products from overseas. Even in the case of huge imports, the merchant cannot import without the IEC and the exporter vendor will not get any benefit from the DGFT for the purpose of any export scheme.
In what situations is an IEC required?
Following are the situations where the IEC is required:
- At the time of importer’s clearance of shipment from the customs
- At the time of making a payment abroad through banks
- At the time of shipments sent by an exporter
- When the money is received by the exporter in foreign currency directly into his bank
IEC Registration Procedure:
- The first and foremost step is to prepare an application in the format as specified-Form no. 2A (Aayaat Niryaat) which will be filed according to the respective Regional office of DGFT.
- The second step is to prepare the respective document which are required for the purpose of identity and address proof along with the bank details and the certificate in respect of ANF2A.
- After the completion of the application, DGFT form is filed via DSC(Digital Signature Certificate) and the required fee for the IEC Registration is paid.
- The last and final step is about the approval of your application and IEC Code is received in a soft copy from the government.
Documents required to register IEC:
Following documents are required for IEC Code Registration:
- Aadhar Card along with a passport size photo
- Pan Card of Individual or the Company
- Electricity Bill ( copy )
- Copy of Cancelled Cheque
- Incorporation/establishment registration scanned copy.
- Scanned copy of RBI approval letter in case of NRI applicant
Perks of the Import Export Code:
An Import Export Code provides with several benefits to the business dealing with import and export:
- As the sole purpose of any business is to exist in the long run, the IEC registration provides an identity in the global market and helps in growing your business outside India.
- After the registration, there are several benefits which the company can avail when it comes to import and export from the DGFT, customs and so on.
- The process of obtaining IEC Code is very easy and provides lifelong benefits. The code is issued within a period of 10 to 15 days after submitting the application.
- As it provides lifelong validity, there is no need for renewal. Once the IEC Code is obtained, it can be used against all the export and import transactions.
Situations where the IEC can be exempted:
- Where import/export is done for personal purposes. The minute there is a commercial purpose involved, an IEC registration is mandatory,
- Traders who are not registered under GST are exempted from registering under IEC.
- IEC is exempted when Import and Export are done by the Government of India Departments and Ministries or any Notified Charitable institutions.
Team Delfyle wishes you the very best of luck for your amazing journey ahead. In case of any further queries, feel free to get in touch with us at firstname.lastname@example.org for a chat, absolutely free of cost!