Import Export Code

Overview

Import Export Code (IEC) is a unique 10-digit code issued by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, Government of India. It is mandatory for businesses involved in importing or exporting goods and services from or to India. The IEC is required to clear shipments and ensure that businesses comply with the customs laws.

Importance of IEC

1.   Mandatory for Imports and Exports: Any individual or entity engaged in the import or export of goods and services    must have an IEC.

2.    Customs Clearance: The IEC is essential for customs clearance at the port when goods are imported or exported.

3.  Opening a Bank Account for International Transactions: Banks often require an IEC to open a business account that  allows international transactions.

4. Eligibility for Export Promotion Benefits: Businesses with IEC may be eligible for export benefits under various government schemes, such as Export Credit Guarantee, Subsidies, and Duty Drawback Schemes.

Who Needs an IEC?

1.     Exporters: Any person or entity who wants to export goods or services out of India.

2.     Importers: Businesses or individuals involved in importing goods or services into India.

3.     Service Providers: If a business is providing services that are exported from India, they must also obtain an IEC.

However, businesses engaged in certain specific activities, such as:

• Export of goods or services under the Government of India’s schemes.
• Special economic zones (SEZs).
• Personal Imports and Exports by passengers traveling abroad are exempt from IEC.

Eligibility Criteria for IEC

1.     Any Indian Citizen or a company/firm registered under Indian law can apply.

2.     No prior registration with DGFT is required for IEC, but it is necessary for international trade.

3.     No specific qualifications are needed, but the entity must have a valid PAN (Permanent Account Number).

Documents Required for IEC Registration

1.     PAN Card of the applicant or company.

2.     Proof of Identity: Aadhaar card, Passport, or Voter ID for individuals.

3.     Proof of Address:

o    For Individuals: Utility bills (Electricity, Water, etc.), Passport, or Rent Agreement.

o    For Companies/Partnerships: Registered office address proof, such as a rent agreement or electricity bill.

4.     Bank Account Details: A bank certificate or cancelled cheque from the applicant’s bank account.

5.     Digital Signature Certificate (DSC): For online submission of the IEC application (optional, but recommended).

IEC Registration Process

1.     Consult with our Experts

2.     Provide all necessary Documents

3.     Filing of Application

4.      IEC Issuance

IEC Renewal

Yes. It is mandatory to update the IEC profile every year. In case of non-updation of the IEC profile, it will be deactivated. Although, a deactivated IEC can be reactivated upon its successful updation.

Benefits of IEC Registration

1.    Global Business Access: IEC facilitates easy entry into international markets and helps businesses to export/import            without barriers.

2.    Government Support: Exporters with an IEC are eligible for various government schemes aimed at promoting exports and offering financial assistance.

3.    Customs Compliance: IEC ensures smooth clearance of goods at customs when importing or exporting.

4.    Tax Exemptions: Registered exporters may avail themselves of various tax exemptions, such as Export Promotion Capital Goods (EPCG) and Duty Drawback.

5.    International Payments: IEC is required for receiving foreign payments for export goods and services.

IEC Exemption

Certain categories of businesses and individuals are exempt from obtaining an IEC:

1.     Export/Import by Government: Government organizations, including PSUs and organizations like EXIM Bank, do not require IEC.

2.     Exporters under a specific scheme like SEZ units or electronic products in specific categories.

3.     Personal Exports: Individuals exporting goods for personal use (like small shipments or gifts).

IEC vs. GST Registration

• IEC is specifically for import/export activities, while GST (Goods and Services Tax) registration is required for all businesses that provide goods or services within India.
• Both registrations are independent but can be required simultaneously for businesses engaged in importing/exporting and domestic trade.

Conclusion

The Import Export Code (IEC) is essential for any business involved in the export or import of goods and services. It not only facilitates customs clearance and international transactions but also opens doors to various government incentives for exporters. The process to obtain IEC is simple and quick, with minimal documentation and is valid for a lifetime. For anyone considering venturing into global trade, getting IEC registration is the first step toward expanding your business worldwide.