Most businesses are expanding their services and products by moving to the international market, including import and export activities. Since international transactions come under business activities, regulations set by the government are also required to be followed. The Importer-Exporter Code is a requirement that is obtained before starting any transaction under online mode. In this article, we will explain what is IE code and what are the advantages of achieving it.
IEC means the importer and exporter code, which is obtained by a business entity for import or export from India as part of a trade transaction. The registration of the Code is enforced under Chapter III of the Foreign Trade (Development and Regulation) Act, 1992. It is issued and allocated by the Directorate General of Foreign Trade (DGFT) as a unique 10-digit number. The IEC Registration Certificate is considered as the main document for the trade that is in the import and export trade.
Any business entity including individuals can apply for registration for import or export from India. Renewal of Importer - Exporter code is not required as IEC is allocated and provided with life-time validity i.e. till the existence of business. The application for IEC registration is done online for the DGFT along with the required documents.
Businesses have great options for their product or services through import and export business to unlock the international market. The IEC Code is the main requirement for entering the international market which supports the growth and development of business to a certain standard. Here are the benefits or advantages of IEC registration for businesses.
As stated, it is the primary requirement for imports and exports from India for goods and specified services that enable businesses to unlock opportunities worldwide in the international trade market. It enhances the global reach of the business and therefore opens the doors for growth and expansion.
Obtaining IEC is to complete the online process through its general portal. The online IEC registration application reduces hassles with a list of simple documents to support the application.
Simple document requirement
The import - export code can be obtained by any business entity or an individual. Below are the required documents that are required for import export code registration.
Applicant's PAN Card
Passport size photo of the applicant
Business Address Proof
PAN based registration
The code is provided based on the permanent account number of the business organization. Therefore, registration is not required based on the place of business, rather a single business entity may require only one registration. Registration is also canceled or surrendered when and when the business is dissolved.
IEC registration is a permanent registration that is valid for life. Therefore there will be no hassle for updating, filing and renewing IEC registration. It is valid as long as the business exists or the registration has not been canceled or surrendered.
Importers, as well as exporters, benefit greatly from the IEC code. Registered business entities will be able to avail the benefits declared by the Customs, Export Promotion Council or other authorities in the form of subsidy or otherwise. After filing LUT under GST, exporters can export without paying taxes. If the export is done with payment of taxes, the exporter is able to claim a refund of the amount paid as tax.
Unlike other tax registrations, the importer or exporter is not required to meet any specific compliance requirements such as annual filing or return filing. The code has no requirement of compliance after registration.
As there is no compliance listed, there is no need to pay an annual maintenance fee after obtaining this code. There is no need for filing or renewal of registration for every financial year or otherwise.
Obtaining the code is a license to import and export goods and services for commercial purpose. It is a main legal license that makes cross-border transactions easy and legal.
IEC helps to eliminate illegal transport or illegal exports and imports. Centralized registration helps officers to monitor and better administer transactions carried out as a part of cross-border trade. Accountability of prohibited or restricted transactions is well understood.
Documents required for import export code registration
For import export code registration you will need the following documents:
A copy of the PAN card of the company or firm or proprietor.
A copy of passport or Aadhaar card or Voter ID of the person.
A copy of the canceled check of the current bank account of the firm or company or proprietor.
Base electricity bill or rent