All You Need to Know About IEC (Import Export Code)

In today's global market, where there is cut-throat competition, everyone is seeking to grow and expand their business internationally. With the introduction of the internet and several technologies, doing business internationally has become easier. However, before growing your business globally, you need to comply with a variety of laws and procedures and get some registrations and licenses. One of the requirements for businesses to expand internationally is IEC.

IEC (Import Export Code) is vital for businesses that are thinking of importing into or exporting from India. In this blog, we will explain what an Import Export code is. We will also discuss why it is needed for an Indian as well as an NRI, and how a business can acquire it, but first things first, let's understand what an IEC is.

What is an IEC (Import Export Code)?

An IEC is often referred to as an Importer-Exporter code. It is required by someone who is looking to grow/import/export their business in the country. IEC is a 10-digit code issued by the DGFT (Director General of Foreign Trade). IEC is a necessity for businesses, startups, manufacturers, as well as NRIs who are seeking to establish import-export businesses in India.

For NRIs, it serves as a bridge to develop trade links between India and other countries around the world. Additionally, an NRI doesn't have to be present in India physically to apply for an IEC, as with the rise in technologies, they have the option to apply using their digital signature or through authorized representatives. It holds a validity for a lifetime, and importer are not allowed to import goods without the IEC. Likewise exporter cannot enjoy the benefits from DGFT for the expat scheme, etc., without an IEC.

When Do You Need An IEC?

You will need an IEC (Import-Export code) in the following situations:

• When an importer or exporter sends money outside India through a bank, an IEC is required by the bank.
• All exporters sending their shipments will require an IEC as it is needed by the customs.
• When an importer clears his shipment through Indian customs, the customs authorities will require an Import-export code.
• An exporter getting money directly into his bank account in a foreign currency will need an IEC, as it will be required by the bank.
• An NRI will also need an IEC to import or export, if they are running a business in India or if they hold a status of director/partner.

How to Apply for an IEC (Import-Export Code)?

Follow the step-by-step instructions to apply for an IEC online easily:

• Step 1: Navigate to the DGFT (Director General of Foreign Trade) website.
• Step 2: Look for the "Services Tab" on the homepage.
• Step 3: From the drop-down list, choose the "IEC Profile Management" option.
• Step 4: A new page will appear where you need to click on the "Apply for IEC" option.
• Step 5: Click on the "Register" option. After that, fill in the required details and click on "Send OTP".
• Step 6: Enter the OTP and click on the "Register" button.
• Step 7: Once your OTP gets verified successfully, you will get a notification that will include the temporary password. After logging in to the DGFT website, you can modify this password.
• Step 8: Upon registering on the DGFT website, you can now log in to the website by using your username and password.
• Step 9: Select the "Apply for IEC" option on the dashboard of the DGFT website.
• Step 10: Click on the "Start Fresh Application" option.
• Step 11: Fill in some basic details, information about the proprietor/partner/director/Karta/managing trustee, bank information, and any other information. Additionally, attach your Digital Signature Certificate (DSC) and pay the required amount.
• Step 12: Upon succesfull payment, you will be redirected to the DGFT website. A receipt will be displayed on the screen, which you need to download to use later in the future.
• Step 13: You will receive the IEC certificate on your registered email. You can download it after logging in to the DGFT website by clicking the "Print IEC" option under the "IEC Profile Management".

Tip for NRIs: If you are an NRI applying for an IEC, try to use an Indian address and mobile number that are linked to your NRI business. Similarly, if you are an overseas director or partner, submit your OCI/PIO or evidence of a foreign passport with the documents.

What are the Documents Required for IEC (Import Export Code) Registration?

You need to provide the following documents for IEC code registration:

• Copy of the individual', firm's, or company's PAN card.
• A copy of the passport with a visa or OCI card for NRIs.
• Voter ID, Aadhaar card, or a copy of the passport of the proprietor.
• Evidence of foreign residency if applying as an NRI director/partner.
• A self-addressed envelope for the delivery of the IEC certificate through registered post.
• Copies of the canceled cheque of the current bank accounts of the individual, company, or firm.
• Evidence of establishment, incorporation, or registration of the partnership, society, partnership form, company, HUF (Hindu Undivided Family), etc.
• Address proof of business location, such as a sale deed, lease deed, rent agreement, or utility bills (electricity bill, telephone bill, or mobile bill).

What are the Benefits of IEC (Import-Export Code) Registration?

The IEC not only provides the legal right for a business to take part in international trade but also provides you with several benefits, including:

Business Expansion

IEC helps you in taking your services or products to the international market and expanding your business globally.

No Need to File Returns

Once the IEC is issued, there is no need to file returns or renew it unless there are any changes. It does not require the filing of any returns. You don't need to follow any procedure to retain its validity, as it is valid for the lifetime of the business entity. Additionally, there is no need to file any returns with DGFT even for export transactions.

No Renewal Required

The importer-exporter code remains valid for the lifetime of an entity, and there is no need to renew it. Once obtained, it can be used by an entity for several import and export transactions. Also, it is eligible for various export schemes like MEIS, SEIS, RoDTEP, etc.

Utilizing the Benefits

It allows both Indian citizens and NRIs to expand their business into global markets. Companies can utilize several benefits of their import/export from the DGFT, export promotion council, customs, etc, based on their IEC registration.

Easy Processing

You can acquire an IEC code online easily within 10-15 days from the DGFT portal after submitting the application. There is no need to provide any evidence of import or export to get the IEC code. Along with that, the Import-Export code offers a gateway for the smooth receipt of payments in foreign currencies, specifically beneficial for NRI consultants and freelancers.

What Are The Cases When IEC is Not Mandatory?

As per the latest circular issued by the government, IEC is not mandatory for every trader who is registered under GST. In such cases, the trader's PAN card shall be understood as a new IEC code to use for import and export purposes. IEC is not needed in case the imported or exported goods if for personal use and are not used for any commercial purposes. Exports/Imports done by the departments and ministries of the Indian government and notified charitable institutions are not required to get an IEC (Import-Export Code). Additionally, the export of goods to either Nepal or Bhutan, subject to certain conditions, may not require an IEC.

Key Points for NRIs on IEC

An NRI must consider these points when applying for an IEC:

• An NRI can act as a partners or director in IEC-registered Indian companies.
• You do not have the option to apply for an IEC using a foreign business entity; they need to register an Indian entity (Proprietorship, LLP, Pvt Ltd, etc.)
• When applying, ensure to provide addresses, emails, and contact numbers that are India-based to ensure compliance.
• You can link your foreign bank accounts only after your IEC is issued and your export-import transactions start.

To Conclude

Obtaining an IEC is crucial for businesses in India looking to participate in global trade markets. It is issued by the Directorate General of Foreign Trade (DGFT), making the customs procedure easier and providing access to international markets. It can be very beneficial for businesses as it ensures that you adhere to all the legal requirements for international trade. Seeking assistance from the experts at SaveTaxs can ease the process of obtaining as well as managing your Import-Export code.

Our professional experts can guide you throughout the application process. They will make sure that you have all the required documentation and fulfil all the requirements. With decades of experience, they can also provide expert advice on different aspects of global trade. Connect with our team anytime as they are actively working 24*7 for every time zone.