The majority of businesses are expanding their services and products by bringing them to the worldwide market, including operations such as importing and exporting. Because overseas transactions fall within the category of business activity, a national’s government's requirements and regulations must also be observed. In India, one such criterion is the Importer – Exporter Code, obtained before starting any online transaction.
According to the Government of India, the Importer-Exporter Code or IEC is a key business identification number that is mandatory for export from India or Import to India. The Foreign Trade (Development and Regulation) Act, 1992, applies to the registration of the code. The Directorate General of Foreign Trade (DGFT) issues and assigns it as a 10-digit unique number. The IEC Registration Certificate is the most important document for every business that deals with imports and exports.
Any corporate entity, including individuals, can register for import or export registration in India. Importer–Exporter Codes are not required to be renewed because they are assigned and awarded with lifetime validity, i.e., until the business ceases to exist. The application for IEC Registration is submitted to the DGFT online, together with the required papers.
However, an IEC is not required for service exports unless the service provider receives incentives under the Foreign Trade Policy.
Importance of IEC
Importers and exporters must apply for IEC registration to import and export products and services. Without the IEC, no one can engage in the import/export industry. No person can make exports or imports without obtaining an IEC unless they are specifically exempted.
The purpose of supplying the IEC code is to maintain track of and record all of a company's operations that engage in international business (10-digit Number).
With the rise of globalization, there are many cross-border commercial options—the Import Export Code registration aids a person to take advantage of these opportunities.
Hence, the IEC code is extremely important for all businesses to function seamlessly in the international forum.
Benefits
- Seizes the International Market: Import Export Code registration is essential for import and export businesses; it allows individuals to tap into the global market, improving and progressing the business-standard.
- A Starting point for foreign transactions: It is the primary document necessary for starting international dealings.
- Improves the quality of business: IEC registration aids in the maintenance of business relationships and the improvement of business quality by expanding worldwide reach.
- Imposes control over illegal Trading: To receive an IEC Registration, you must provide valid and accurate information. The department cannot issue an IEC registration without receiving complete and accurate information, limiting the illegal trade of commodities.
- Additional benefits: IEC has lifetime validity. Businesses also are not required to renew their registration. Certain benefits are also available from areas such DGFT customs, Export Promotion council, etc. Furthermore, businesses can obtain a refund of taxes paid while exporting goods.
Process of Registration
A company can apply for the IEC code: proprietorship, partnership, limited liability partnership, limited company, trust, HUF, or society.
Before the application, the company must have a PAN, a bank account in its name, and a valid address.
On issuing of the IEC, the DGFT may physically verify the address.
Before applying, please have your PAN, bank account information, and firm information handy at the time of registration.
- In the case of offline registration: The applicant submits an IEC application to the Directorate General of Foreign Trade's nearest Regional Authority (DGFT). The applicant must complete and submit the relevant forms (Form - ANF2A) (Aayaat Niryaat).
- A single IEC will be issued for a single Applicant's PAN number.
- In the case of online registration: An Applicant can get ANF2A in PDF or Word format from the website. Appendix 18B must be attested by the bank authorities on the letterhead, together with two passport-sized photographs.
After the procedure is completed, an application is assigned an IEC number (10 digit number) valid for all of the company's branches and divisions.
Conclusion
In this age of globalization, every corporate entity seeks IEC Registration to expand its operations internationally. By obtaining the Import Export Code registration through proper compliance and procedures, business owners intend to develop their firm internationally.
