Most of the Businesses are extending their services and products by taking them to the international market which involves the Importing and Exporting activities. As the international transactions are covered under business activities, the regulations laid by the Government are also required to be followed. Importer – Exporter Code is one of such requirement which is obtained before initiating any transaction under online mode. In this article, we shall explain what the IE Code is and advantages of obtaining same.
Import Export Code
IEC means Importer and Exporter Code, which is obtained by the business entity for import into or export from India as part of business transaction. Registration of the code is applied under CHAPTER III of The Foreign Trade (Development and Regulation) Act, 1992. It is issued and allotted by the Directorate General of Foreign Trade (DGFT) as a 10 Digit unique number. The IEC Registration Certificate is deemed as the main document for the business which is into the imports and exports business.
Any business entity including individuals can apply for the registration for import into or export from India. The renewal of Importer – Exporter Code is not required as IEC are allotted and granted with life-time validity i.e. till existent of the business. Application for IEC Registration is made online to DGFT accompanied with necessary documents.
Advantages of IEC for Businesses
Businesses have great options through import and export business to unlock the international market for their product or services they are involved in. The IEC code is the main requirement to enter into international market which supports the growth and development of the business to a certain standard. Here are the Benefits or Advantages of IEC Registration for Businesses.
Global Market Reach
As said, it is the primary requirement for the import into and export from India for the goods and specified services which enables the businesses to unlock the opportunities across the globe in international business market. It increases the global reach of the business and hence opens door for growth and expansion.
Obtaining IEC is complete online process through its common portal. The online IEC registration application makes hassles little with simplified documents list attached therewith to support the application.
Simple Document Requirement
The Import – Export Code can be obtained by any business entity or an individual. Below are the mandatory documents that are required for the Import Export Code Registration.
- PAN Card of the Applicant
- Passport Size photograph of the applicant
- Cancelled Cheque
- Address proof of the Business
PAN Based Registration
The Code is provided based on the Permanent Account Number of the business organisation. Therefore, the registration is not required based on place of business rather, a single business entity may require only one registration. As and when the business is dissolved, the registration is also revoked or surrendered.
Life Time Validity
IEC registration is permanent registration which is valid for life time. Hence there will be no hassles for updating, filing and renewal the IEC registration. It is valid till the business exists or the registration is not revoked or surrendered.
Benefits of Schemes
IEC code has huge benefit for importers as well as exporters. The registered business entities would be able to avail benefits in form of subsidies or otherwise declared by the Customs, Export Promotion Council or other authorities. After filing LUT under GST, the exporters can make exports without payment of taxes. In case the exports are made with payment of taxes, the exporter is able to claim refunds of the amount paid as tax.
Unlike other tax registrations, the importer or exporter does not require to fulfil any specific compliance requirement such as Annual Filings or return filings. The code possesses no need of compliance after registration.
No Annual Maintenance
As there is no compliance listed, there is no requirement of annual maintenance fees to be paid after obtaining this code. There is no requirement of filings or renewal of the registration for each Financial Year or otherwise.
Obtaining the code is the license for importing and exporting goods and services for business purpose. It is a chief legal license that makes the cross border transactions easy and legal.
Reduces the risk of Illegal transportation
IEC helps to eradicate the illegal transportation or illegal exports and imports. The centralised registration helps the officials to supervise and better administer the transactions undertaken as a part of cross border business. The accountability of prohibited or restricted transactions is apportioned well.
Obtaining Importer Exporter Code is mandatory before commencing activities of Import or Export. Unless one has obtained this registration, the goods or specified services cannot be imported into or exported from India. The applicant engaging into exports is also required to get registered under GST as specific category of registration is specified under the law. The necessity of IEC registration cannot be neglected as it is mandatory in nature.