If you have been in the export business for a while, you already know what this means. But if you’re just starting out or need more info on the IEC code, this blog is for you. Let’s start with the basics. The Import-Export Code (IEC) is a unique 10-digit identification number issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, and Government of India, which you MUST have if you or your business does international trade. But why is it such a mandate? How do you issue this code?
Why is an Import-Export Code (IEC) Essential for Indian Exporters?
So, the IEC (Import-Export Code) is a unique business identification number for all Indian exporters and importers. It officially and legally allows them to carry on with international trade and initiate transactions with the banks, customs, and regulatory bodies.
Also Read: Product Life Cycle: Stages, Importance, & Benefits
Legal Requirement for Global Trade
The IEC is a legal requirement for international trade, which means that without it, a business can neither send shipments nor receive foreign payments. But while the code is necessary, the best part is that it just takes a one-time registration for a lifetime of validity!
Benefits of Having an Import-Export Code for Import and Export Businesses
So while we already know that an IEC code is non-negotiable and why, let’s check out its benefits with more clarity now.
- Global Market Access: Allows you to enter international markets easily.
- Customs Clearance: Makes customs clearance easy.
- Foreign Exchange Transactions: Necessary for receiving payments from overseas clients.
- Government Benefits: Necessary for availing many government export incentives.
- No Annual Compliance: One-time registration is all it takes. No renewals needed unless updates are made.
How to Obtain an IEC Code Online?
By now, we know that to run an export trade business, we need an IEC code. But, what is the process to register for it? What does it take? Keep reading to know.
Step-by-Step Guide to Apply for an IEC Code Online
- Visit the DGFT Website
- Create an account using your valid business credentials and register as an importer/exporter.
- Fill out the IEC Application Form (ANF 2A) using your business details, PAN, and bank details.
- Upload required documents:
- PAN card of the business or individual
- Aadhaar card/Voter ID/Passport (for individuals)
- Bank account details with a canceled cheque
- Business address proof
- Pay the IEC Fee of INR 500.
- Submit the application. Once verified, it will take 1-2 working days for the IEC to be issued electronically.
IEC Code Charges: What You Need to Know
- Application Fee: INR 500
- Amendment Fee: INR 200
- Reactivation Fee (if deactivated): INR 1000
The Second Step—Verify the IEC Code
Getting the IEC code is just one step of the process; there is more to it. Yes, once you obtain it, you must then verify it to avoid compliance issues and transaction failures. Here’s how you can do that!
How to Perform an IEC Code Check Online
- Visit the DGFT website.
- Click on ‘IEC Status Check’.
- Enter the IEC number and PAN details.
- View the current status of the IEC.
Verification Process
- DGFT maintains an online database for verification.
- You can verify an IEC by entering the 10-digit code on the portal.
- Banks, customs, and regulatory authorities use this verification to process international transactions.
Also Read: Difference Between Shipping and Delivery
Common Questions About Import-Export Code Charges and Renewal
Are There Recurring Charges?
No, IEC is issued for a lifetime and does not incur an annual fee. However, if there are any updates or modifications required in the business information and the IEC code, a nominal fee applies then.
Renewal and Update Process
- IEC does not require renewal but needs annual updates.
- If there are changes in business details (address, ownership, etc.), updates can be made on the DGFT portal.
- Failure to update IEC may lead to deactivation.
Conclusion
Evidently, the IEC code is important for businesses involved in global trade. It makes it easier for a business to clear customs, initiate foreign exchange transactions, and comply with trade regulations. This code can unlock many growth opportunities for global traders!
