In today’s worldwide economy, international business provides enormous possibilities for domestic businesses to expand their reach beyond domestic borders. Whether you are a startup company or an experienced organisation, involving in import or export activities can essentially enhance your business growth. Moreover, to lawfully take part in global trade from or to India, getting an Importer Exporter Code (IEC) is necessary.
What is an Importer Exporter Code (IEC)?
The Importer Exporter Code (IEC) is a specific 10-digit verification number that is imperative for any business considering importing or exporting products from India. It is offered by the DGFT or Directorate General of Foreign Trade, Ministry of Commerce and Industry, Government of India. The IEC is an important document that legalises a trade as a certified importer or exporter. Unlike registrations for other businesses, this code is everlasting and does not need renewal. Thus making it a one-time confirmation for organisations to involve in global trade. (1)
The Role of Importer Exporter Code (IEC) in Global Trade
The IEC plays a significant role in easing international business. It is not only a regulatory need but also an imperative tool for businesses to protect different benefits in the Foreign Trade Policy. For instance, when looking for export benefits, having an IEC is essential. Although exports for services do not ever need this code, it becomes important if the service provider is claiming benefits under the Foreign Trade Policy. (2)
When is Importer Exporter Code (IEC) Required?
1. The customs officials ask for it when an importer needs to clear his consignments from customs.
2. When an importer sends an amount to a foreign country through banks, the IEC is required by the bank.
3. When an exporter needs to deliver his shipments, the customs port asks for this code.
4. When an exporter obtains money in foreign currency directly into his account, the bank needs this code.
Who Requires an Importer Exporter Code (IEC)?
This code is needed for different business entities, such as:
A.Partnerships
B. Proprietorships
C. LLPs or Limited Liability Partnerships
D. HUFs or Trusts Hindu Undivided Families
E. Limited Companies
F. Societies
Disregarding the business structure, if the entity aims to engage in importing or exporting activities, it must get an IEC.
Benefits of Registration
1. Captures the Global Market
Registration for the Import Export Code is essential for import and export trades. It lets individuals enter the global market, thus increasing the business standards.
2. A Beginning Point for Foreign Dealings
It is the key document required for initiating international deals.
3. Enhances the Quality of Business
Registration for IEC helps manage business relationships and increase business quality by growing international reach.
4. Controls Illegitimate Trading
To obtain an IEC registration, you must give valid and correct information. The department cannot provide registration without accurate and complete information, restricting the illegal commodity trade.
5. Extra Benefits
IEC has a lasting validity. Businesses do not require renewing their registration. Some benefits are also offered from areas like DGFT customs, Export Promotion Council (EPC), etc. Moreover, businesses can get a rebate on taxes paid while exporting products.
How to Apply for an Importer Exporter Code (IEC)?
1. Go to the DGFT website.
2. Click on the ‘Services’ section on the homepage.
3. Choose the option of ‘IEC Profile Management’ from the drop-down menu.
4. You will be redirected to a new page. On that page, click on the option to ‘Apply for IEC.’
5. Click on ‘Register,’ enter the necessary details, and click on the button ‘Send OTP.’
6. Fill in the OTP and click on the button ‘Register.’
7. After a successful OTP verification, you will receive an alert with the temporary password, which you can amend after signing into the DGFT website.
8. After you register on the DGFT website, sign in by filling out your username and password.
9. Click on the ‘Apply for IEC’ option on the DGFT website dashboard.
10. Then, click on the button ‘Start Fresh Application.’
11. Feed the normal information, such as details of the proprietor, partner, director, trustee, bank details, and many other information. After that, attach a DSC or Digital Signature Certificate and make the payment.
12. When the payment is successful, it will be taken to the DGFT website. The receipt will be shown. You can download the receipt for future reference.
13. The certificate will be delivered via email. You can also download it by signing in to the DGFT website and clicking the option of ‘Print IEC’ in the tab ‘IEC Profile Management.
What Documents are Necessary for the Registration?
1. You will need a copy of the PAN card as a firm, individual, or company.
2. You will have to furnish a copy of the proprietor’s Aadhaar card, passport, or voter ID.
3. You will need to provide registration of the proprietorship, partnership, company, society, HUF, etc, and confirmation of establishment.
4. Address proof of business premises by sale deed, lease deed, utility bills, and rent contract.
5. An envelope including self-address for the physical receiving of the IEC certificate via post.
Final Words
Knowing the Importer Exporter Code (IEC) is essential for businesses looking to enter global trade. This 10-digit code, provided by the Director General of Foreign Trade (DGFT), is an entry point to worldwide markets, allowing flawless business operations.
This code works as an indicator of safety, effectiveness, and compliance. It is necessary for businesses looking to navigate the complex environment of international business with swiftness and confidence. It emphasises the emerging dynamics of global business practices. Thus highlighting the necessity of capturing digital changes and following supervisory frameworks to encourage a helpful environment for digital international trade.
As businesses continue to use these tools and procedures, global market participation becomes hugely accessible, showing the profound effect of this code on the wider narrative of international commerce.
If you are looking for further information on how to improve your international trade, browse through Amazon Global Selling. It is an international e-commerce platform that helps exporters take their business from India to other countries.
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