How to Start a IEC REGISTRATION

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Overview of IEC Registration

With the rise of globalization, the opportunity for cross-border business has significantly increased. An Import Export Code (IEC) registration is crucial for individuals or businesses looking to expand their operations internationally. This code is not just a formal requirement; it also opens doors to global business opportunities, boosting growth and expansion potential.

What is an Import Export Code?

An Import Export Code (IEC) is a 10-digit unique code issued by the Director General of Foreign Trade (DGFT), Ministry of Commerce and Industry, Government of India. This code is essential for any business or individual involved in the import or export of goods or services. Once issued, the IEC remains valid for a lifetime, eliminating the need for renewal.

Typically, the IEC code is generated within 12-15 working days after the submission of required documents and corrections. Without this code, businesses are prohibited from participating in import-export activities.

Features of IEC Registration:

  • Mandatory for Import/Export: No business can engage in import or export activities without obtaining an IEC registration.
  • Lifetime Validity: Once issued, the IEC code is valid for life, requiring no renewal or periodic filings.
  • Proof of International Trade: IEC serves as official evidence for businesses involved in the import or export of goods and services.
  • Foreign Bank Transactions: IEC is required for foreign bank transfers related to import/export activities.
  • No Need for Renewal: Unlike many other business licenses, the IEC does not need to be renewed, making it a one-time registration for ongoing trade activities.

Importance of IEC Registration:

Obtaining an IEC code is mandatory for any commercial importer or exporter in India. A business without this registration is not eligible to participate in international trade, making it an essential step for those looking to explore global markets.

 
 
 
 

Benefits of IEC Code Registration

The Import Export Code (IEC) offers several advantages that are crucial for businesses engaged in international trade. Below are the key benefits of IEC Registration:

1. Expansion of Business

IEC registration opens up opportunities for businesses to expand globally. It allows companies to enter the international market by exporting goods outside India, while also helping establish a strong international presence.

2. Access to Various Benefits

Registered businesses can avail themselves of several benefits offered by the Export Promotion Council (EPC), DGFT (Director General of Foreign Trade), and Customs. These benefits enhance a business’s ability to grow and succeed in the global market.

3. No Need for Filing Returns

Unlike other registrations, IEC does not require businesses to file regular returns. Once an IEC is issued, the business does not need to go through any additional procedures to prove its legitimacy to the DGFT. Additionally, there is no requirement to file returns for export transactions.

4. Hassle-Free Processing

Obtaining IEC registration is a straightforward process that can be completed within 10-15 working days. The application process does not require proof of export or import activities. This makes it an efficient way to get started in international trade.

5. Lifetime Validity

An IEC is valid for a lifetime, meaning there’s no need for renewal. Once issued, businesses can use their IEC code indefinitely, ensuring long-term use without additional paperwork or costs.

6. Government Authorization

The IEC is a government-issued code by the Director General of Foreign Trade (DGFT). It serves as an official identification for businesses engaged in international trade. Customs authorities and banks recognize it, providing legitimacy during export/import and financial transactions.

When is IEC Registration Required?

IEC registration is mandatory in the following scenarios:

  1. Clearing Shipments: When an importer wants to clear goods through customs, the IEC code is required.
  2. Foreign Bank Transfers: Banks require the IEC when an importer sends money abroad.
  3. Exporting Goods: When an exporter ships goods abroad, the customs port will request the IEC code.
  4. Receiving Foreign Payments: If an exporter receives payments in foreign currency directly into a bank account, the IEC code is necessary.
  5. Food & APEDA Licensing: IEC is required for obtaining Food Licensing and APEDA Licensing.
  6. Export Subsidies: To avail of any export subsidies or benefits, exporters must provide their IEC code to the Export Promotion Council.

When is IEC Registration Not Required?

There are specific cases where IEC registration is not required, such as:

  • Personal imports/exports: Small-scale personal imports or exports that are not part of a business activity may not require an IEC.
  • Exemption for certain Government Bodies: Some government departments or public sector undertakings might be exempt from having an IEC code.
  • Non-commercial activities: If the goods or services are not being imported/exported for commercial purposes, the IEC may not be mandatory.

Who Can Apply for IEC Registration in India?

The following entities are eligible to apply for IEC Registration in India:

  • Export Houses
  • Production Facilities (for importing raw materials)
  • Entities in the EXIM Business
  • Importers and Exporters
  • Importers Seeking Special Authorization from DGFT
  • Manufacturers Who Also Export Goods

Note: IEC registration is available to registered businesses in India. It’s necessary to have a valid Business Certificate before applying for IEC registration.

 
 
 

Documents Required for IEC Registration

To apply for IEC Registration in India, the following essential documents are needed:

  1. PAN Card:

    • For companies, a PAN card is required (not applicable for proprietorship).

  2. Identity Proof of the Applicant:

    • PAN card and Aadhaar card of the applicant. If these are unavailable, other identity proof such as Voter ID, Driving License, or Passport may be submitted.

  3. Partnership Deed / Certificate of Incorporation:

    • A Partnership Deed (for partnership firms) or a Certificate of Incorporation (for companies) is required.

  4. Address Proof:

    • Documents like electricity bill, sale deed, or rent agreement for the office or business premises.

  5. Bank Details:

    • A copy of a cancelled cheque or a banker certificate of the current account in the name of the company.

These documents are necessary for verifying the identity and legitimacy of the business applying for IEC registration.

 
 
 

Procedure for IEC Registration

The process for obtaining an Import Export Code (IEC) Registration involves the following steps:

Step 1: Obtain Digital Signature Certificate (DSC)

  • A Digital Signature Certificate (DSC) is issued by a certified authority and is signed with the private key of a Chartered Accountant (CA).
  • The DSC contains the following details:
    • Serial Number
    • Owner's Name
    • Digital Signature of the Issuer
    • Public Key Expiry Date
    • Public Key of the Owner
    • Issuer’s Name

Step 2: File an Application

  • After obtaining the DSC, the applicant can proceed to the DGFT official website to apply for IEC Registration.
  • Before completing the registration, an account must be created on the portal.

Step 3: Submit Required Documents

  • During the application process, the applicant is prompted to upload the required documents (such as PAN card, address proof, and bank details) in the prescribed format.

Step 4: Payment

  • After submitting the application form and documents, the applicant proceeds to the payment section to pay the required fees for IEC Registration.

Step 5: Inspection

  • Once the application is submitted, the concerned authority will initiate an inspection process to verify the documents and application details.

Step 6: Issuance of IEC Certificate

  • Upon successful verification and inspection, the IEC Registration Certificate will be issued.

Note: IEC Registration is valid for a lifetime and does not require renewal.

Cancellation of IEC Registration

IEC Registration can be canceled under the following circumstances:

  • Violating Foreign Trade Policy norms
  • Importing or exporting prohibited items
  • Non-compliance with customs directions
  • Providing false or misleading information in shipping documents

Exemptions from IEC Registration

The following scenarios are exempt from IEC Registration:

  1. Individuals engaged in importing/exporting goods for personal use (not related to trade, manufacturing, or horticulture).
  2. Import or export of goods to/from Nepal and Myanmar via China or the Indo-Myanmar border, where the transaction does not exceed INR 25,000 in Indian currency.
  3. Export of SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) as specified in Appendix-3, Schedule 2 of ITC (HS), which requires IEC registration.

Changes under IEC Registration Post-GST

After the implementation of GST, several changes have been made concerning IEC:

  1. GSTIN as Identifier:

    • GSTIN (Goods and Services Tax Identification Number) is used for the credit flow of IGST (Inter-State Goods and Services Tax) paid on the import of goods.
    • PAN will serve as the identifier at the entity level, while GSTIN will be used for transactions involving imports and exports.

  2. Requirement for GST-Registered Traders:

    • Traders registered under GST do not need a separate IEC for imports and exports. They can use their GSTIN for these transactions.

  3. Exemptions for Certain Entities:

    • Ministries, Government Departments, and Notified Charitable Institutions are exempt from IEC Registration.
    • Goods imported or exported for personal use also do not require IEC Registration.