In the last few years, India’s SME (small and medium enterprise) sector is booming magnificently. But let’s face it. Even giant companies such as Amazon and Google had started initially as small companies before becoming the multi-billion-dollar as they are today.
The SMEs in India, too, realize this and business owners are cognizant that to stay on the top of the game, they will have to expand their business beyond the domestic market. Nonetheless, setting up your business and building it into a global brand is not an easy task. There is a specific process to follow before you dive into the global business market. One of the procedures is of an IEC (import-export code).
Defining IEC (Import and Export Code)
The IEC code is used by companies or individuals that are looking to set up an import-export business. It would be issued by the DGFT (director general of foreign trade), the IEC code for export of services and its import is a ten-digit code that is valid for a lifetime. If one does not have an IEC code, then one cannot import or export any goods.
Does one require an IEC for export services?
Yes, one needs it. Without an IEC code, merchants cannot export goods or services to other countries. The customs port needs the IEC in case a merchant is exporting goods and services. You would also require an IEC code as an exporter if you receive money in foreign currency directly into your bank account.
How can one register for IEC code, especially for exporters and importers?
You are needed to follow the requisite steps to register an IEC code for exporters and importers as given below;
– You will have to prepare an application form such as Aayaat Niryaat form 2A format and submit it with the concerned DGFT.
– Along with the form, you will have to file all the identity documents such as your Passport, Aadhar card, PAN card, and so forth. And your address proof such as Voter ID, Passport, Aadhar card along with your bank details.
– Once you are done with this, you will have to submit it with DGFT using a DSC (digital signature certificate) and pay the prescribed amount of fee to register for IEC.
– Once your application has been approved, you would receive a soft copy of the IEC from the government.
What is an import and export code?
An IEC code, an import and export code, is a code needed by a person or business involved in imports and exports in India.
Is an IEC code needed in all import-export circumstances?
There are specific T&Cs where an IEC code is not needed for the export and import of goods and services as given below;
– An IEC code is not needed for the import and export of goods used for personal usage are sent or received, such as these goods are not associated with the manufacture, trade, or agriculture.
– Suppose the government or the government departments or ministries and specific notified charitable trusts/organizations are involved in the importing or exporting of goods. In that case, an IEC code is not needed.
Who has to obtain the IEC code?
Any business or person involved in the export and import of goods and services in India should obtain an IEC code.
What are some of the required documents to obtain an IEC code?
To get an IEC code, you are obliged to file a self-attested copy of your PAN card. Also, the address proof of the business, the business constitution. Furthermore, a letter of authority from the bank where your business has an account.
How much time will it take to obtain the IEC code?
Generally, it would take betwixt 3 to 7 working days before you obtain an IEC code. Nonetheless, do remember that this is only after all of your documentation has been filed in order. And your registration for the code is sanctioned.
Will I get penalised for not applying for an IEC code?
You will not be penalised for that, but you cannot import or export any goods or services without an IEC code.
Do I have to submit anything after I obtain an IEC code?
The IEC code is just a ten-digit code. That you are obliged to show to successfully import and export goods and services. You are not obliged to submit transactions under this code and pay additional tax for having this code.
For how long this IEC code will be valid?
An IEC code is valid for a lifetime without any renewal.