Import Export Code Registration: Overview

Since the emergence and traction of online retail, businesses around the world have resorted to the aim of generating higher revenues and earning goodwill by offering their products beyond international boundaries. Importing raw materials or products or services may not be as easy as selling/procuring them from within the country, it needs to follow due legal procedures. For instance, persons or business entities undertaking export or import of India require permission from the Directorate of Foreign Trade of India (DGFT) in the form of an IEC Code Registration or commonly known as Importer-Exporter Code.

What is IEC code Registration ?

IEC code Registration is a ten digit code required to do international trade which is valid for the lifetime. The authorization issued to an individual or business entity who intends to commence the export or import of goods for business activities. Unless particularly exempted, it is mandated under the Foreign Trade (Development and Regulation) Act 1992 to obtain IEC registration and quote IEC code for import-export-related business activities.

Where is the IEC registration code required?

• Facilitate transfer of funds in case of imports into India;
• Required by customs departments to receive shipments for imports made;
• For exporters receiving funds in foreign currencies to be transferred to a bank account.

However, it shall not be mandatory for the following to obtain IEC Registration:

• Individual or business entities who hold GST Registration already.
• Where goods are either exported or imported for personal reasons, not business purposes.
• Any Ministry or Department of any State Government or Union Government of India undertakes any related export or import.

IEC Code Registration Eligibility

Regardless of the scale of businesses or their sales turnover, any individual or business entity, including but not limited to a limited company, partnership firm or LLP, sole proprietorship, or a charitable institution undertaking any activities related to export or import, is eligible to make an application for IEC registration code.

Import Export Code Registration Benefits

1. Legal Validity: Since the IEC code registration is a legally recognized certificate issued by the GOI, it authorizes individual or business entities to export or import goods globally easily, enabling them to compete with businesses internationally and create goodwill.
2. Simplified and Faster Process: Since the process of application to document submission to grant of IEC registration code has become entirely digital, it has become convenient and hassle-free to get an IEC registration license within 1-2 days without any supporting documents for any actual export or import undertaken by the applicant. Now with Electronic Fund Transfers, exporters can submit their license fees through the internet, making the process more convenient.
3. Government Grants or Incentives Eligibility: To encourage entrepreneurship and encourage businesses to build global-level brands, the Government of India has numerous assistance in the form of tax exemptions, duty drawbacks, GST exemptions, customs rebates, etc., for imports and exports from India, all of which could only be availed by IEC Registration code.
4. Fewer Compliances: Compared to other licenses or permits, far fewer compliances are involved in the IEC Registration code. Hence, individuals or business entities holding the IEC registration code do not need any periodic return filing or fee payments with respect to IEC registration.

IEC Registration Documents Required

1. Self-certified copy of PAN certificate of the individual or any other business entity;
2. Self-certified proof of identification of individual/authorized partner/trustee/director, i.e. Voter ID/Aadhaar card/passport copy.
3. Bank account details of the individual/business entity, along with a canceled cheque.
4. Copy of the proof of ownership of the property where the registered address is located, Sale deed/Rent Agreement/Lease Agreement) or copy of utility bills (not older than three months).
5. A cover letter should be in an envelope addressed for address validation, on which the IEC certificate will be delivered through registered post.

Procedure of IEC Registration Online

Step 1: Go to the Director General of Foreign Trade (DGFT) portal.

To begin with the process of IEC Registration, go to the dedicated portal of DGFT (https://www.dgft.gov.in/CP/) and sign in by entering basic details such as name, mobile no., address, and user category and create login credentials.

Step 2: Log in to the User Account to fill out the form

Now, with the login credentials enter the portal click Services then IEC profile management, and then select the "IEC registration" option from the drop-down menu. Now, fill in information including Name and category of business, proof of identification, proof of residence of the authorized officer of the business entity, and the official email ID of the company to receive OTP and click "Generate OTP", after which an OTP will be generated in the registered email ID and Mobile number. Furthermore, the branch details of the business entity, including its registered address, can be found by clicking the second alternative for import and export code purposes.

Step 3: Fill Authorized Officer Details

Now move to the next page to fill in details of the Authorized Officer, i.e. sole proprietor/director/trustee, etc., of the respective business entity with information related to the identification proof and proof of residence.

Step 4: Attach documents online

Now, the applicant can move to the next page where he can attach supporting documents such as proof of identification, proof of registered Address, canceled cheque of business bank account, etc.

Step 5: E-sign and submit the application

Upon completion of the form filing with all the necessary details, the applicant shall be required to verify the accuracy of the information. Later, the form could be submitted through either DSC (Class 2 and Class 3) or Aadhaar-based authentication. After which an acknowledgement receipt will be generated to follow-up on application.

Step 6: Grant of Registration

Once the Verifying authority receives the application, it will authenticate the contents of the application about meeting all the essential requirements, it may approve the application followed by granting of IEC Registration Certificate online in a downloadable format. Such registration certificate shall also include a ten-digit specific code that shall be quoted for all export imported-related purposes.

Time Involved, Validity, and Renewal for IEC Registration

Once the application is submitted, obtaining an IEC registration code may take around 1-2 days depending upon the authority's satisfaction. Once granted, the IEC registration is valid for a lifetime and doesn't require renewal, but the IEC details shall be updated annually. If the IEC registration holder fails to do so, it may hamper the business activities, whereas compliance with the IEC registration may indicate compliance with Foreign Trade Regulations.

IEC Code Registration Fee

The government application fee for obtaining an IEC Registration code is around ₹500. The professional fees for IEC Code Registration Fee is ₹999 which is excluding GST.

Cancellation of the IEC Registration

However, the IEC Registration could be canceled due to the following grounds:

• Violations of the rules and regulations for Foreign Policy or Customs Act.
• Dealing in the export or import of products/services is expressly prohibited under Trade laws.
• The applicant has misled the customs authority with respect to shipment details.
• Applicant acquired registration for goods but has yet to undertake import or export of goods through shipment.

Why choose BizFoc?

At BizFoc, we have a unique team of experts with years of experience to find solutions for all your queries related to IEC registration under one roof. Our unique features include-

• Expert Team of Professionals to guide and assist you with end–to–end support from registration to completion of legal processes.
• Round-the-clock presence to hear your concerns.
• Efficient Services with reasonable charges.

Conclusion

Therefore, the IEC Registration code is an essential legal authorization for undertaking export-import-related business activities in India. It enables the IEC registration holder to ease into shipping processes and customs clearance, sending or receiving funds through banking channels, makes license holders eligible for tax exemptions and grants from the Government, and helps businesses earn credibility and a global reputation. If you wish to obtain an IEC registration code for your business or have any questions related to it do not hesitate to contact professionals at BizFoc.

Frequently Asked Questions about IEC Registration