What is Import Export Code (IEC)?

Import Export Code (IEC) is a crucial registration for businesses involved in importing or exporting goods and services from India. It is a unique code issued by the Directorate General of Foreign Trade (DGFT), an agency under the Ministry of Commerce and Industry in India. The IEC serves as a primary identification for businesses engaged in international trade and is often referred to as the passport for import and export activities.

KEY POINTS OF IMPORT EXPORT CODE REGISTRATION

Here are some key points to understand about Import Export Code (IEC):

1. Purpose: The primary purpose of IEC is to establish a legal identity for businesses engaged in cross-border trade. It is mandatory for any business wishing to engage in import or export activities.
2. Issuance: IEC is issued by the DGFT and is unique to each business entity. It is a 10-digit alphanumeric code that remains constant and doesn’t change unless there’s a change in the legal structure of the business.
3. Application Process: Businesses can apply for IEC through the DGFT’s online portal. The application requires providing necessary business details and documentation, such as the business’s PAN (Permanent Account Number), bank account details, proprietor or director/partner details, and proof of address.
4. Validity: Once issued, an IEC doesn’t have an expiration date and remains valid as long as the business entity is operational and complies with the relevant regulations.
5. Use: The IEC is required to be quoted on various documents related to import and export transactions, such as shipping bills, custom declarations, and other trade-related documents.
6. Exemptions: Certain categories of businesses may be exempted from obtaining an IEC, depending on the type of goods or services they deal with or the trade they are engaged in.
7. Amendments and Modifications: If there are any changes in the business’s legal structure, address, or other key details, the IEC registration might need to be updated accordingly.
8. Penalties: Operating without a valid IEC or engaging in activities that violate the terms and conditions of the IEC can result in penalties or legal actions.
9. Export Promotion Schemes: An IEC is often required to avail various export promotion schemes, benefits, and incentives provided by the government to boost export activities.
10. Online Verification: The DGFT provides an online platform where anyone can verify the authenticity of an IEC code using the code itself or other business details.

Is Import Export Code mandatory for Import Export Business?

Export Code (IEC) license for businesses engaged in export and import activities from India.

1. Mandatory for Imports and Exports: The IEC license is a crucial identification number required for both imports and exports conducted by businesses in India. It’s issued by the Directorate General of Foreign Trade (DGFT) and serves as a necessary authorization for international trade operations.
2. Exception for Export of Services or Technology Transfer: In the context of services or technology transfer, the IEC Code may not be mandatory in all cases. If the service provider or technology provider is seeking benefits under the Foreign Trade Policy or is dealing with specified services or technologies under Section 7 of the Foreign Trade (Development & Regulation) Amendment Act, 2010, then the requirement for an IEC Code comes into play.
3. Benefits of IEC Code for Services or Technology Providers: If a service provider or technology provider aims to take advantage of benefits under the Foreign Trade Policy or is involved in specific services or technology transfers covered by Section 7 of the Foreign Trade (Development & Regulation) Amendment Act, 2010, then they would need an IEC Code.
4. LUT (Letter of Undertaking) for Exporters: A separate concept mentioned is the Letter of Undertaking (LUT), which is relevant for exporters. An exporter needs to apply for an LUT before the start of the financial year in which they intend to export goods or services. LUT allows registered individuals who intend to supply goods/services to avail certain benefits related to export operations.

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IMPORT EXPORT CODE EXEMPTION

The following stakeholders are eligible for Import Export Code Exemption:

1. Central or State Government Ministries or Departments: Government ministries or departments at the central or state level are eligible for IEC exemption. This exemption likely applies to their import and export activities related to official government functions.
2. Individuals for Personal Use: Individuals who are importing or exporting items for personal use, and these items are not intended for trade, manufacturing, or agricultural purposes, are eligible for IEC exemption. This means that IEC might not be required for small-scale personal import or export activities.
3. Border Area Trade with Specific Countries: Individuals who are importing or exporting products to or from specific countries through certain border areas are eligible for IEC exemption under specific conditions:
   • Nepal and Myanmar via Indo-Myanmar Border Areas: Imports or exports of items to or from Nepal or Myanmar via designated border areas are exempt from IEC requirements.
   • China: Imports or exports to or from China are eligible for IEC exemption, provided that the CIF (Cost, Insurance, and Freight) value of a single consignment does not exceed Rs. 25,000. For imports or exports via the Nathula port (a border crossing between India and China), the exemption ceiling is higher at Rs. 1 lakh.

REQUIREMENT OF DIGITAL SIGNATURE FOR IMPORT EXPORT CODE

1. Digital Signature Requirement for IEC Application: When applying for an Import Export Code (IEC) online, both importers and exporters need to have a digital signature of the business owner or director. This digital signature is essential for the online IEC application process, ensuring security and authenticity.
2. Preferred Method: Digital Signatures (DSC): Digital Signatures (DSC) are the preferred and most commonly used method for applying for an IEC code online. They provide a secure and efficient way to complete the application process electronically.
3. Special DSC for IEC Holders by DGFT: The Directorate General of Foreign Trade (DGFT) offers a unique Digital Signature Certificate (DSC) to organizations that already possess an IEC code for their export and import activities. This special DSC carries benefits, including potential savings of up to 50% on license fees.
4. Assistance for DSC Arrangement: YMW FINANCIAL SERVICES is mentioned as a resource that can assist applicants in arranging the necessary digital signature (DSC) for the IEC application process. They likely offer services related to obtaining and managing digital signatures for various business needs.

Restricted or Prohibited import Goods

Restricted Import Goods:

These are goods that can be imported into India, but only with the permission of the government.

You can get the complete list of Restricted Import Goods at:

https://content.dgft.gov.in/Website/Restricted.pdf

Prohibited Import Goods:

These are goods that are not allowed to be imported into India under any circumstances.

You can get the complete list of Prohibited Import Goods at:

https://www.abf.gov.au/importing-exporting-and-manufacturing/prohibited-goods/list-of-items

 

WHAT IS THE EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME?

The Export Promotion Capital Goods (EPCG) Scheme is a government initiative designed to encourage exports by facilitating the import of capital goods, including spares, with the aim of enhancing production and competitiveness in export-oriented industries. Here’s a detailed explanation of the EPCG Scheme and its key features:

1. Objective: The primary goal of the EPCG Scheme is to boost exports by providing incentives for importing capital goods, machinery, and equipment required for production processes.
2. Duty Exemption: Under the EPCG Scheme, eligible businesses can import capital goods and related spares at zero customs duty. This import is subject to an export obligation that requires the exporter to fulfill a specific amount of export within a defined period.
3. Export Obligation: The exporter is required to fulfill an export obligation equivalent to six times the duty saved on the imported capital goods. This obligation must be met within a period of six years from the date of issuance of the authorization.
4. Eligibility: Manufacturers, exporters, merchant exporters, and even service providers who are recognized or accredited as Common Service Providers (CSP) can avail the benefits of the EPCG Scheme.
5. Application Process: Businesses with a valid Import Export Code (IEC) can apply for the EPCG Scheme by submitting an application provided in Appendix 10 A of the Handbook, along with the required documents, to the Director General of Foreign Trade (DGFT) or regional licensing authorities.
6. Terms and Obligations:
   • The exports must be made from products created or manufactured using the imported capital goods.
   • Exports should be direct exports, and the exporter’s name should be included on the Shipping Bill. Third-party exports are also allowed.
   • Export proceeds must be repatriated in freely convertible currency.
   • Physical exports, as well as deemed exports, can count towards fulfilling the export obligation. However, no deemed export benefits are provided.
   • The obligation is supplemental to other export obligations and is over and above the average value of exports of the same product in the previous three licensing years.
   • If the exporter has licenses for the same item under both the EPCG Scheme and Duty Exemption Scheme, exports made under the Duty Exemption Scheme can also contribute to the EPCG Scheme’s export obligation.
   • Specific conditions apply to the export of computer software, with the export obligation determined according to the policy.

Matching GSTIN and Import Export Code

Every business owner who plans to export from India must get the Import Export Code (IEC) and Goods and Services Tax (GST), two essential documents or licenses.

For all small, medium, and big business owners to be eligible for schemes and benefits, they must also connect their GST with IEC on the ICEGATE website.

Furthermore, Matching these two numbers assists customs officers in ensuring that the information given by the merchant is consistent across multiple government databases and avoids any anomalies that might lead to customs clearance or taxation difficulties.

Therefore, you must also integrate your GSTIN with IEC using

https://old.icegate.gov.in/UserReg/integrateGSTIN

 

Documents Required for Import Export Code Registration

1. Email Id and Mobile Number
2. PAN Card.
3. Bank Account Details.
4. Firm Name Printed Cancel Cheque.
5. GST Registration
6. Address Proof.
7. If Company or LLP then Certificate of Incorporation/LLP Certificate, MOA, AOA.

 

How to apply online for Import Export Code?

If you want to apply online for Import Export code then you have to firstly register yourself with email id and mobile number on DGFT Website

Visit Website- Click here

After click on the above link you will get below interface whereyou have to register yourself.

For better under about Registration of Import Export Code follow below video where you will get step by step process-

 

FREQUENTLY ASKED QUESTION

What is IEC ?

IEC stands for Import-Export Code. It is a 10 Digit unique code issued by directorate general of foreign trade (DGFT) of commerce and industries ministry of government of India

 Can I apply for IEC without GST?

Yes, you can apply for IEC without having GST Registration. However, you will need to submit your PAN Card details for IEC Code Registration application.

 What is the purpose of the IEC?

The Importer-Exporter Code (IEC) is an essential business identification number that is compulsory for both Exporters and Importers. It is issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce. No individual can engage in export or import activities without acquiring an IEC, except in cases of specific exemption.

Can I use my IEC for Both Goods and Services?

Yes, you can use IEC Code Registration for both goods and services. However, it is important to note that one import export code is issued against a single PAN.

Who requires IEC Registration?

Any person or business type who intends to import or export goods and services from or to India must require an Import Exports Code

How much time it will take to acquire/obtain an Import Export Code?

Import Export Code can be obtained instantly after submission application.

What is the validity of IEC Code?

IEC certificate is valid for Lifetime.

Is DSC required to obtain IEC Registration?

As per recent notification, DSC is not required to apply import exports code.

Do we receive any hard copy from the department?

No, you will receive final soft copy of IEC certificate over the email or download from DGFT Website.

Are any monthly / yearly returns required to be filed under Import Export Code?

IEC is just a license allowing the import and export of goods. Therefore, yearly return is required to be filed under IEC code.