Any business entity wishing to become a player in the international market of commodities should first and foremost get an Import/Export Code or IEC. Indian export/import figures exceeded $1.6 trillion recently, and because of this, there is an even greater demand for a simple and hassle-free registration procedure.
IEC can equally be for a small factory owner or a big trader’s first identification number to be used in all international transactions. You can use this article to learn about import export code registration, from the first introduction of the term to the last step of getting your paper document from the registry.
What is Import Export Code (IEC) Registration and Why is it Mandatory?
The Import/Export Code (IEC) is a 10-digit business identification number which is given by the Directorate General of Foreign Trade (DGFT). Import/Export Code registration is a required condition for individuals, associations and businesses who are intending to do import or export of commodities/ware or services from India.
Without an active IEC code, you cannot legally send or receive money for exports and imports, but rather your products remain stuck at ports of entry and there will be no clearance of goods. Just like your individual/passport is to a citizen, IEC Code is also the only identifying mark for your business for foreign transactions.
How Does IEC Registration Support International Trade?
The process of registering an IEC code is mostly to make trade-related regulations more convenient. It is the tool that the government can utilize for keeping tabs on the trade of import and export and this also gives the government the power to control smuggling and other illicit trades at the same time.
Besides, the IEC Code is not just a permit issued by the government, but it is the means of unlocking a myriad number of benefits for an exporter, such as:
- Reaping export-related government grants and other incentives.
- Keeping a foreign currency account.
- Taking part in exhibitions and foreign events which the government organizes under a trade agreement and the international trade fair.
- Getting the refund of custom duty on export of the product.
Simply put, the business of importing and exporting is not a matter of law for the business owners alone, but they too must follow some basic customs and international trade laws using having an Import Export Code registration done.
Step-by-Step Process for Import Export Code Registration Online
DGFT has fully transformed the procedure of importing/exporting code into online mode so that it becomes quite an effortless and simple job. All you need to do is to gather and arrange the documents properly in preparation for the task.
Step 1 – Visit the Official DGFT Portal
The first task is to go to the DGFT official site at `dgft.gov.in`. No other sites are authentic for IEC code registration. Steer clear from the sites that are not official but charge huge fees to provide the same service. On the site’s top bar, find the ‘Services’ drop-down menu and choose ‘IEC Profile Management’. The module is used to register IEC, renew IEC, and also other IEC-related operations.
Step 2 – Register and Login on the DGFT Portal
As a new user, the process involves filling online the portal form which comprises your Permanent Account Number (PAN), email address and mobile number that will be verified during registration. Once your account is created, you can access the portal by entering your login ID and password. The portal needs an One Time Pad (OTP) number to be entered for the security check after user logins to the application.
Step 3 – Fill the IEC Application Form (ANF 2A)
Upon logging in, the applicant will then complete the form ANF 2A. The form asks for various details about the company, such as:
- Name and nature of the company (proprietorship, partnership, LLP, or Company)
- Physical address of the company
- Information about the partners or directors
- Bank details (a/c no. and name, IFSC code)
It is best to fill the information as it is written on the original document to avoid being requested to give clarifications and even rejection when paying for IEC registration fees during the process.
Step 4 – Upload Required Documents
The applicant is required to scan and upload what comes next documents after completing the application form:
- PAN card of the company
- A copy of the proprietor’s/president’s identity like a driver’s license or government-issued photo ID
- A photocopy of the most recent bank account statement including the signature at the back to prove the name of a bank account holder
To make sure of a successful IEC code registration, it is important for an importer/exporter who runs as a sole proprietor to submit documents required for IEC code for proprietorship. The list of such documents will be shown in the next part of this section.
Step 5 – Pay the Application Fee and Submit
Government charges for IEC registration are usually low, in the range of ₹500 and can be even less during the special promotional periods which are announced by DGFT. Submitting of the application can be done at the latest after the completion and payment of the fee for application of registration of IEC. The applicant receives a receipt no. from the portal through which the tracking of the IEC code application is possible.
Documents Required for IEC Code Registration
The possession of the right documents will help in the smoother and quicker processing of import export code registration. Incorrect or missing documents generally delay the processing of the application. Here is a list of all the necessary documents one needs to gather for an export/import company registration.
Documents Required for IEC Code for Proprietorship
In cases where a proprietor is the sole owner of the company, the list of documents which should be brought to iec code registration for sole proprietorship might differ in comparison with other company types. A proprietor will need the following:
- PAN Card of the Proprietor: The IEC is actually dependent on the PAN number of the proprietor. So, this is the first and most crucial document that needs to be presented.
- Proprietor’s Aadhaar Card: The documents of an address and identity are required.
- Bank Certificate or Cancelled Cheque: Provide either an up-to-date bank statement or a cancelled cheque from the business’s current account. The bank must be a joint account with the business or proprietor.
- Document Verification for Physical Address of Business: This document can include a utility bill (electricity or water bill), rent agreement, or property tax receipt. The name of the business owner or the business should be printed on this document.
Documents Required for Other Business Entities
If you are a partner, LLP, or a private limited company, the following list of documents for IEC code submission will be needed:
- Company / Firm PAN: PAN should have been claimed in the name of the company / firm.
- Certificate of Incorporation: Companies and LLP’s.
- Partnership Agreement: For Partnership Firms.
- Aadhaar and PAN of Partners/Directors: To confirm their identities.
- Bank Certificate: A cancelled bank cheque or the bank statement of a current business account.
- Proof of Business Premises Address: The rental/billing statement of the business premises.
How Long Does IEC Registration Take?
A frequently asked question for IEC code registration is the timeframe. On an average, IEC gets approved within a span of 1 to 3 business days following receipt of a correctly completed, well-filled out application document. The DGFT system, being largely mechanized, reduces the processing time for applicants.
Factors That Can Delay Your Registration
These list can cause a bit of hitch in the registration process though a usual case is quick:
- Mass Submission of Forms: At peak seasons when the DGFT receives a large number of applications, the time taken for processing each may be extended by a few days.
- System Glitches: Occasionally the DGFT online portal may encounter a technical problem that delays work progress.
- Issue Raised by DGFT: The DGFT system can also find a mistake (e.g.) between information on the PAN & the Aadhaar or on the PAN and Bank Detail fields, which results in a query to you. This will have to be cleared by providing the correct data that could delay you 2-3 days additional.
In order, a PAN linked with Aadhaar, and an active bank account that matches with the data submitted on your application shall be ensured.
IEC Code Renewal and Activation: What You Need to Know
After a successful completion of IEC code registration, the IEC is indefinitely valid and doesn’t require annual renewal. But updating is essential through DGFT to keep the profile updated, whenever it’s required, when considering changing business details like change of address, new addition partner, etc.
How to Activate Your IEC Code
In most cases, there is no separate activation process for an Import Export Code (IEC). Once your application or IEC update request is approved by the Directorate General of Foreign Trade (DGFT), your IEC becomes active automatically.
- For a new IEC application: A new IEC number is issued after approval, and you can download the IEC certificate from the DGFT portal.
- For an existing IEC: The IEC number remains the same. If it has become inactive due to non-compliance, such as not completing the mandatory annual IEC updation, it is reactivated after your update request is approved.
To confirm that your IEC is active, log in to the DGFT portal, check the application status, and download your IEC certificate if it has been approved. No additional activation request or separate approval step is required after the application is accepted.
Quick Glance at the IEC Registration Process
A last-minute verification of the checklist may be of much help to you in getting import export code registration smoothly:
- Get your PAN Ready: Check if your business or personal PAN is a valid PAN as per the recent norms. Besides, your PAN has to be linked with your Aadhaar number to get it active.
- Get the Current Bank Account Ready: The one and only bank account in the name of the business will be the one that handles all the finances.
- Documentation is Next: If you know what documents required for iec code you will be using, then gathering them shouldn’t be difficult. Yet, the type of the company may require specific documents.
- Go to the DGFT Portal: On the website, `dgft.gov.in`, you will find the application for the import export code registration you need to complete.
- Settle the Amount Due: Make the iec registration fees payment, which is minimal, using the online way.
- You May Monitor Your Request: With this simple way, you can track the state of your application by referencing the acknowledgment number.
Conclusion
Registration of the import export code may seem like a rather small thing to do but it can be really important to a business that is planning to go global. You can just take one step at a time and refer to the guidelines provided above to get your IEC without too much difficulty and also start your journey in international trade.
All that remains the success of the registration is having all documentation and data in order, so that you don’t spend your precious time on the corrections due to the inaccuracies in the documentation. And if you need expertise or some hands-on assistance to deal with IEC code registration or you’re coming back for IEC code renewal, Foxtax is always here for these needs.
Frequently Asked Questions (FAQs)
What is the difference between IEC and import-export license?
If you consider the two concepts as different, then you are totally right: the IEC is a registration reference number whereas the license allows certain activities. Though, all importers/exporters must possess the IEC, while the license is limited in its application to certain goods only.
Can I apply for IEC without a GST number?
Your IEC code application has no dependence on the GST number. But you will definitely need GST for carrying on any business activities as it is a tax obligation. So sooner or later the tax department will force you to get GST registration if you start dealing in goods or services.
Is it mandatory to have a Digital Signature Certificate (DSC) for IEC registration?
For individual applicants and partnerships there is no requirement of getting the Digital Signature Certificate (DSC). So they are free to skip the step altogether. Yet, for companies and LLPs, it’s a DSC that usually gets you to the door for the final submission of the application.
What is the cost of IEC registration?
The government fee for registering the IEC is mostly ₹500 but it’s quite often waived. Should you go for a service such as Foxtax, there could be an extra professional fee charged for the full assistance package.
How can I download my IEC certificate?
Once your import export code registration gets the green light, you can head over to the DGFT portal, log in and go to the ‘IEC Profile Management’ section to find and download your IEC certificate.
Can I have multiple IEC codes for different businesses?
It is entirely possible for businesses entities having different PANs to be each given their very own IEC. But, with one PAN, registration can’t be done for multiple IEC.
What should I do if my IEC application is rejected?
If your IEC application is turned down, you will be notified why. To be approved again you need to fix all the mistakes and then submit the application again. It is also possible to get advice from an outside expert like Foxtax, which will help in finding out the main source of the problem as well as to correct the application correctly.