Modern world is a world of industrialisation and globalisation where a consumer can not only access goods or services or both made available from different places in the world. But also, a business entity can produce and market global products according to the suitability and requirement of each country or location in the world. For making global products, the business owner needs to import raw material or technology or any other constituent from outside India and where he sells such products out of the country, he needs to export such goods from India. However, undertaking export or import of India requires permission from the Directorate of Foreign Trade of India in the form of IEC code (also known as Import Export Code Registration).
So, what is IEC code registration? An IEC code registration is the permission granted by Directorate of Foreign Trade in India to any individual or business entity intending to undertake either export or import of goods or services or both from a country outside India for business activities. Under the provisions of the Foreign Trade (Development &Regulation) Act, 1992, no person shall undertake either export or import of goods unless he/she possesses an IEC number, that has been legally issued by the Director General of Foreign Trade or any other officer authorised under the Act.
Therefore, an IEC is a 10 digit unique code which is necessary to be acquired by any individual or business entity for purposes such as custom clearance, money transfer to foreign banks, directing shipments of goods to foreign countries and receive money from any foreign bank. The IEC code is issued by Director-General of Foreign Trade (DGFT), Ministry of Commerce, who oversees the process of application and verifies details. Successful IEC registration leads to generation of an IEC code registration which contains a ten digit unique number within a period of 10-15 days from the date of submission of registration application.
Though, it is important for every individual or business entity intending to undertake import-export of goods , however, it shall be mandatory for the following persons to obtain registration-
- Where an importer wishes receive clearance from the Custom department for clearing his/her shipments from the custom department.
- Where an importer intends to make payments for the goods or raw materials came from outside India.
- Where an exporter intends to deliver goods through shipments outside India.
- Where an exporter receives money from outside India in foreign currency into his bank account.
On the other hand, import-export code is not mandatory for individual or business entities who have been already registered under the Goods and Services Act 2017 as per the latest Government notification. Where the former is applicable, the PAN number of the business entity will qualify for the purpose of import-export registration.
Further, when goods or services are exported or imported for personal purposes rather than for business activities, the same shall not be required to obtain IEC code registration.
Finally, where any Export/ Import activity is undertaken by either the Government of India or any Departments and Ministries under the Government of India or by any, Notified Charitable institution/s, then such institutions shall not be required to be registered under IEC code registration.
Import Export Code Registration with Legalmart
The process of Import Export code registration is completely online and has been simplified for the smooth facilitation of IEC code for applicants who wish to undertake export import business operations. However, it is necessary to practice caution while preparing, collecting and submitting information on the DGFT portal. Therefore, it is always advisable to take assistance of an expert source which could give you reliable information and expert assistance in successfully completing the process of IEC code registration making you worry lesser about getting timely registration without any worries and focusing on business at the comfort of your convenience. For which, Legalmart has gained experience in IEC registration and related services.
Applicability of Import Export Code Registration
Any individual or legally incorporated business entity can obtain importer –exporter code registration regardless of its size, capital or turnover, the basic feature being such entity intends to undertake either import or export related activities.
Accordingly, businesses related to export or import could be of ultimate importance for a business for the sake of economic development and growth of the country. In absence of the same, there are high probabilities of undertaking import or export through illegal means. However, person holding IEC are provided benefits and incentives for each export made with respect to such businesses, which makes it beneficial as well as mandatory for every legal person to have an IEC.
Benefits of Import Export Code Registration
For an individual/sole proprietor or business entity holding IEC code that intends to undertake export-import of its products/services, can avail the following benefits such as-
- Global outreach- An individual or business entity holding IEC certification, has the benefit of ease in exporting or importing goods in relation of his business activities. It allows the IEC holder to expand his business and offer his goods or services on a global level subject to applicable compliances under this Act. Thus, such person can compete with global brands, earn consumer trust and build his credibility in the relevant market.
- Simple Process– The process of acquiring IEC registration has been simplified and made completely online so that it could be obtained without any hassle. Now, the applicant only needs fill the registration form and upload documents in support of the application and can obtain IEC registration certificate within 10-15 days without the requirement to submit any actual export or import undertaken by the applicant.
- Certificate Renewal not required– Once an applicant has obtained IEC registration certificate from the DGFT, he/she doesn’t need to incur any further expenses in renewal application or renewal fee, because the IEC certificate comes with a life-long validity with no requirement of renewal. Further, in case a business entity obtains IEC registration certificate, the same shall be applicable for all its business units, which means savings in costs of an organization.
- Registration through PAN– Applying the objective of “Ease of Doing Business”, the Government of India has allowed PAN identification of the individual or business entity to be used for the purpose of IEC registration. Thus, i.e. the Directorate General of Foreign Trade shall issue an IEC registration certificate based on the PAN identity of the organization, which will be an alphanumeric number instead of digits.
- Incentives from Government –India is a country that is developing at a rapid pace through industrialisation and globalisation. However, for ensuring economic development at the same pace, the country needs to export goods and services for more foreign reserves and also to meet shortage of necessary raw materials for industries through imports. Therefore, to encourage entrepreneurship and production of goods/offering services of global standards, the Government of India offers several benefits such as tax exemptions, duty drawbacks, exemptions under GST & customs Act, rebates etc., for imports and exports from India. However, such benefits could only be availed by an applicant who holds a valid IEC registration.
- Lesser Compliances-Unlike other registrations and licenses that require returns and various compliances from time to time, an applicant holding IEC certificate is not subject to any returns or annual compliances during the validity of the IEC registration. Similarly, there is no requirement for any annual, monthly or quarterly fee payment in relation to IEC registration.
- Legal Credibility- It is mandatory for every individual or business entity intending to undertake either import or export of goods or services or both to acquire IEC certificate in relation to his/her business. It is further mandatory for making any of such legal cross border transactions related to offering or sale of goods or services.
- Curbs illegal practices- IEC code certificate helps to curb the illegal cross border transactions that happen through illegal transportation or illegal exports and imports. IEC registration is a centralised registration process that helps the Government officials to administer transactions happening as a part of illegal cross border business activities.
Documents Required for Import Export Code Registration Purposes
Provided below is the list of documents necessary for obtaining IEC registration-
- Scanned copy of PAN card of individual /sole proprietor or any other business entity.
- Scanned copy of proof of identity of individual/authorised partner in case of partnership firm or LLP /authorised director in case of company such as Voter ID/Aadhaar card/ passport copy.
- Scanned copy of cancelled cheque associated with the business account of individual /sole proprietor or any other business entity.
- Copy of the proof of ownership of premises where the registered office of the business is located (Sale deed/Rent Agreement /Lease Agreement) or copy of electricity bill.
- Copy of an envelope who is addressed to itself for the purpose of validating the address on which the IEC certificate will be delivered through registered post.
- No objection Certificate form the owner of the property in case the property has been rented or leased.
Online Process for Import Export Code Registration
Once all the documents specified above have been prepared and collected, the applicant needs to log on to the Directorate General of foreign Trade (DGFT). Following is the step-by-step process of application for IEC code for applicant-
Step 1- Log on to DGFT portal.
The Directorate General of Foreign Trade has provided a portal for the purpose of IEC code registration which is technically initiated by creation of user id and password. Log on to the www.dgft.gov.in, where you will be welcomed by an informational page that will also be able to view latest notification and updates on the screen. Create a user id and password through the instructions provided in the portal.
Step 2- Choose IEC option.
After you log on successfully into the DGFT portal, you will be able to view and choose “Services” from the Navigation bar under the drop-down menu including the “IEC” option.
Step 3- Open IEC Application and Fill details.
Under “IEC code” and “Click Online IEC Application” and fill all details such as details related to name and type of business entity, address proof and identification details of the authorised officer of the business entity, PAN number of the entity etc.
Next, fill contact details and email id for the purpose of receiving OTP and click “Generate OTP”, after which an OTP will be received in the provided mobile number and email id.
After filling OTP, fill details related to the entity as well as any branch of the applicant business entity including its registered address by clicking second alternative for import and export code purposes.
Step 4- Fill and update details related to Proprietor/ Director/Partner/s of the entity.
Move to the next side of the tab in the portal and click “Director/Partner” details. Next, you will be required to details required to be filled in case of Sole proprietor/Directors/Partners /Trustee etc. of the applicable business entity including information related to the identification proof and proof of residence.
Step 5- Upload Documents Scanned Copies of Essential Documents.
Move to the next page, where you will be able to view a page requiring you to upload required documents in scanned pdf format including address proof of registered business address, copy of cancelled cheque of business bank account etc.
Step 6: Fee Submission.
After uploading documents, move to the next page, where you will be able to view fee required for IEC registration purposes. Click Submit Fee by selecting mode of payment which could be made through Debit Card/Credit Card/ or Net Banking or Mobile wallet. Once the payment is successful, click “Verify Pay” and verify the payment submitted.
Step 7: Preview Application and Submit Form.
Once the fee submission process is successful and complete, you will be able to view a checklist for the purpose of ensuring that all conditions for registration have been complied with. At last, preview all the details related to the information thoroughly once more to avoid any discrepancy and click final submit. However, if you wish to make any changes, you may go back and change details before such submission.
Step 8: Final Submission & Certificate Generation
After submission of the registration form, there will be an acknowledgment form generated along with an acknowledgement number along with the details on the DGFT portal. Check details accordingly and click the option “Proceed further”.
On clicking the same, you will be able to view a new page with “IEC certificate details” that could be accessed by clicking “Submit & Generate IEC code” certificate after signing the form through DSC from the portal. Next you will find a page containing acknowledgment regarding successful submission along with a reference number for tracking status of the application.
Why you Choose Legalmart?
We at Legalmart are committed to provide expert level assistance with our professional knowledge and years of experience in IEC registration from time to time. Further, we offer to provide following services in case you intend to apply for IEC registration–
Preparation of Application & collection of documents
At Legalmart, We sincerely believe that managing the business as a business owner is a difficult task and inadequate knowledge about legal formalities could be hectic to perform on your own. Thus, at Legalmart we have an entire team of professionals having years of knowledge and expertise in the field of IEC registration, and who are ready to guide through the whole process, collect necessary documents, and prepare your application ready to be submitted to the portal in an efficient manner.
End to End assistance from registration to IEC certificate Generation
Once documents are collected, our professional experts will fill and submit application on the DGFT portal online. Once the form is submitted with all necessary documents and attachments, the applicant will be able to generate IEC certificate within a day. We also entertain customer queries 24*7 to ensure timely assistance and complete our services efficiently.