ABOUT IEC CODE
Full Form of IEC is Import Export Code (IEC)
The Import Export Code (IEC), a 10-digit identifier issued by DGFT, is vital for Indian importers and exporters. It’s mandatory for international trade, serving as a unique reference for customs and regulatory dealings. Valid indefinitely, it streamlines customs clearance, facilitates financial transactions, and grants access to governmental benefits. Essential documents, including identity proofs, are required for application. The IEC is a cornerstone for lawful and efficient cross-border trade, ensuring compliance and enabling seamless transactions in India.
Features of IEC Code
There are various features of the IEC Code like IEC Code as Essential Identifier, Integral Role of IEC, IEC’s Significance in Global Trade, and many more. They are explained below:
1. IEC Code as Essential Identifier
The IEC code, also known as the Import Export Code, stands as a crucial identification number mandatory for importers and exporters in India. It acts as a unique reference facilitating smooth customs clearance and international trade transactions.
2. Integral Role of IEC
The Import and Export Code (IEC) plays a pivotal role in authorizing and regulating import/export operations in India. It serves as a fundamental document required for legal compliance and transactional facilitation.
3. IEC Significance in Global Trade
A vital element in international trade, the IEC code is indispensable for seamless import/export activities. It streamlines customs processes and financial transactions, enabling efficient trade operations.
4. IEC for Regulatory Compliance
The Import Export Code (IEC) is a mandatory prerequisite for engaging in cross-border trade. Its acquisition is crucial, ensuring compliance with Indian regulatory frameworks governing import and export operations.
5. IEC Perpetual Validity
Once obtained, the IEC remains valid indefinitely, simplifying trade continuity and eliminating the need for frequent renewals. It acts as a perpetual identification code for importers and exporters in India.
Advantages of IEC Code
There are various advantages of IEC Code like Global Market Access, Government Benefits Access, Enhanced Credibility, and many more. They are explain below:
1. Global Market Access
The IEC code facilitates entry into the global market, enabling businesses to engage in import and export activities. It grants legality, enabling seamless international trade transactions and expanding market reach for Indian businesses across diverse industries, fostering growth and economic opportunities.
2. Government Benefits Access
Holders of the IEC code gain access to numerous government incentives, benefits, and schemes intended to support and encourage export activities. This includes various export promotion schemes and subsidies, enhancing competitiveness and profitability.
3. Enhanced Credibility
Possessing an IEC enhances a business credibility in international trade dealings. It signifies legitimacy, builds trust among global partners, and showcases compliance with regulatory norms, fostering better partnerships and collaborations.
4. Simplified Trade Processes
The IEC simplifies customs procedures and documentation requirements, reducing red tape and bureaucratic hurdles in import and export transactions. It streamlines processes, expedites customs clearances, and enables smoother trade operations.
5. Expansion Opportunities
With an IEC, businesses can explore new markets, establish global partnerships, and diversify their product offerings. It opens doors to explore untapped markets, fostering growth, and diversification for Indian businesses on the international stage.
Disadvantages of IEC Code
There are various disadvantages of IEC Code like Documentation Complexity, Competitive Transparency, Governmental Dependencies, and many more. They are explained below:
1. Documentation Complexity
Obtaining an IEC involves extensive paperwork, which can be intricate and time-consuming. Detailed forms, along with various supporting documents, are required, making the application process burdensome and challenging for newcomers in the import-export business.
2. Renewal Hassles
Regular renewal is necessary for the IEC, imposing additional administrative tasks and costs. Forgetting or delaying the renewal could lead to disruptions in international trade operations, causing potential financial losses and legal complications.
3. Competitive Transparency
As IEC details are publicly available, competitors can access crucial information about your import-export activities, potentially compromising your unique market strategies or supplier relationships.
4. Governmental Dependencies
Changes in government policies or regulations can significantly impact the validity and usage conditions of the IEC. This dependence on external factors can introduce uncertainties and affect long-term trade planning.
5. Operational Restrictions
The IEC might have limitations on specific types of international trade activities, restricting business expansion or participation in certain markets, thereby potentially limiting revenue opportunities for the enterprise.
Who can apply for IEC Code
- One-person Business (Sole Proprietorship)
- This is when one person runs the business alone. If you’re doing business by yourself and want to import or export goods, you can get an IEC.
- Business with Partners (Partnership)
- When two or more people own and manage a business together. If you’re in a partnership and want to trade internationally, you can get an IEC together for your business.
- Business with Limited Liability (LLP)
- This is like a mix between a partnership and a company, where the owners’ responsibility for debts is limited. LLPs can also get an IEC for importing or exporting goods.
- Company with Limited Liability (Limited Company)
- A company where shareholder responsibility for debts is limited. If your business is a company and wants to do international trade, you can get an IEC.
- Trust
- This is when one party holds assets for the benefit of another. Trusts can also trade internationally and apply for an IEC to do so.
- Family Business (Hindu Undivided Family – HUF)
- It’s a family business recognized under certain laws. If your family runs a business and wants to trade internationally, you can get an IEC.
- Organizations for Social Causes (Society)
- Groups formed for things like charity or community service. If these organizations want to import or export goods for their causes, they can get an IEC.
Documents Required for IEC Code
- PAN Card copy
- Individual, firm, or company copy of PAN Card.
- Identity Proof
- Proprietor voter ID, Aadhaar card, or passport copy.
- Proof of Establishment/Registration
- Document verifying the establishment, incorporation, or registration of the partnership, society, proprietorship firm, company, HUF, etc.
- Address Proof for Business Premises
- Sale deed, lease deed, rent agreement, or utility bills (electricity, telephone, or mobile bill) as proof of the business premise address.
- Bank Account Details
- Cancelled cheque copies of current bank accounts for individuals, companies, or firms.
- Self-addressed Envelope
- Provide a self-addressed envelope for the delivery of the IEC certificate via registered post.
Steps Required to Register IEC Code
- Access DGFT Website
- Go to the DGFT website.
- Navigate Services
- Click on ‘Services’ on the homepage.
- Select IEC Profile Management
- Choose ‘IEC Profile Management’ from the dropdown list.
- Begin IEC Application
- Click ‘Apply for IEC’ on the new page.
- Register
- Select ‘Register’ and fill in required details.
- Click ‘Send OTP’ and input the received code.
- Complete registration upon successful OTP validation.
- Login
- Log in using the provided username and temporary password.
- Start Application
- On the dashboard, click ‘Apply for IEC’.
- Initiate New Application
- Select ‘Start Fresh Application’.
- Provide Information
- Enter general info, details of proprietor/partner/director/Karta/managing trustee, bank details, and other required information.
- Attach the Digital Signature Certificate (DSC) and proceed to payment.
- Payment and Receipt
- After payment, a receipt will appear. Download it for records.
- Certificate Retrieval
- The IEC Certificate will arrive via email.
- Log back into DGFT.
- Under ‘IEC Profile Management,’ choose ‘Print IEC’ to download the certificate.
