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International trade can be complex, especially when dealing with the regulatory requirements in different countries. One crucial element that makes things easier is the Import Export Code (IEC). This article explains what the IEC Code is, its importance, and how to obtain one for your business.
The Import Export Code, or IEC code, is a unique number given by the Directorate General of Foreign Trade (DGFT) in India. Without this code, businesses cannot legally engage in international trade. It differs from other essential identifiers used by businesses like PAN or GSTIN and is very helpful for smooth international payment transfers.
IEC code registration can be done online via the DGFT website, Here are the steps involved -
Register Your Business: Create an account on the DGFT website and register your business details.
Fill Out the Application Form: Complete the online IEC application form with the required information.
Upload Documents: Submit the necessary documents (see below) as per the guidelines.
Pay the Fee: Make the payment for the application fee.
Submit the Application: Review and submit your application for processing.
Application Processing: The DGFT will process your application, and you can track its status through the online portal to stay informed about progress.
IEC Issuance: Upon approval, your unique 10-digit Import Export Code (IEC) will be generated. Download your IEC certificate from the portal.
Commence Import-Export Activities: Armed with your IEC, you're now ready to engage in outbound international trade. Use the code for customs clearance and other transactions, contributing to the global growth of your business.
To apply for an IEC Code, you’ll need to provide:
To give you an idea, here is an IEC code example: IEC Code: 0512*XX. It's a combination of numbers and letters, like a secret ID unique to each person or business. This code becomes your distinct identifier. It's used whenever you're part of international trade processes, such as going through customs. This ensures everything is handled correctly and all the necessary paperwork is in order when bringing goods into or sending them out of India.
An absolute requirement for individuals or businesses involved in importing or exporting goods and services, the IEC acts as a unique identifier in all international trade transactions. Its pivotal role extends to facilitating customs clearance and aiding the government in monitoring and regulating foreign trade activities.
The connection between the Goods and Services Tax (GST) and the Import Export Code (IEC) in India is not direct.
GST (Goods and Services Tax) is a consumption-based tax levied on the supply of goods and services within the geographical boundaries of India. While it is not directly associated with the IEC (Import Export Code), GST applies to businesses engaged in the provision of goods or services, encompassing those participating in import and export operations.
When goods are imported into India, GST is levied on the imported items during the customs clearance process.
Make Note: This business tax on the remittance process is separate from the IEC's realm, as the IEC primarily focuses on the identification and regulation of importers and exporters, ensuring compliance with international trade regulations.
In India, certain entities are exempted from obtaining an Import Export Code (IEC). The following categories are typically exempt from the mandatory requirement of an IEC:
Individuals for Personal Use:
Individuals importing or exporting goods for personal use and not for any commercial purpose may be exempt from obtaining an IEC.
Government Departments and Ministries:
Government departments and ministries engaging in import or export activities for official purposes are generally exempt from IEC requirements.
Certain Special Economic Zones (SEZs):
Entities located in Special Economic Zones (SEZs) for specified transactions may be exempt from the IEC requirement.
Diplomatic and Consular Missions:
Diplomatic and consular missions, as well as personnel from foreign embassies and consulates, may be exempt from obtaining an IEC.
Import or Export of Goods for Personal Gifts:
Individuals importing or exporting goods as personal gifts and not for commercial purposes may be exempt from IEC requirements up to a specified value.
In India, the following entities are eligible to obtain an Import Export Code (IEC):
Individuals: Any individual, including proprietors, can apply for an IEC if they are involved in international trade.
Companies: Entities of various forms, including private limited companies, public limited companies, and sole proprietorships, are eligible to obtain an Import Export
Partnership Firms: Partnership firms have the option to apply for an Import Export Code (IEC) to participate in import and export endeavors.
Limited Liability Partnerships (LLPs): LLPs can obtain an IEC to facilitate international trade transactions.
Hindu Undivided Families (HUFs): HUFs involved in international trade are eligible for an IEC.
Society: Societies, including educational and charitable institutions, can obtain an IEC for international trade purposes.
Joint Ventures: Entities formed through joint ventures, whether with Indian or foreign partners, are eligible for an IEC.
Government Departments: Various government departments may also apply for an IEC if they are involved in import or export transactions.
In the past, the IEC code and PAN number were different. But with the introduction of GST tax scheme, IEC code provided to a company is the same as it’s PAN number. The business still needs to go through the DGFT application process though.
The IEC Code fee for registration is INR 500. Once issued, an IEC Code is valid for a lifetime. There is no need for renewal or periodic reapplication. However, if there are changes in your business details, you must update your IEC Code to reflect these changes accurately.
#10 How to verify and check if an IEC Code is correct?
You can simply visit the ICEGATE website and enter IE code to check - https://old.icegate.gov.in/EnqMod/
In case there are any errors, get in touch with the DGFT that issues IEC codes.
Typically, a few days to a couple of weeks, depending on application completeness.
Yes, individuals can apply if they wish to engage in international trade.
No, the IEC Code is specific to the issuing business entity.
Request a duplicate from DGFT with your application copy and proof of identity.
Yes, the application process can be completed online via the DGFT’s website.
