It is very much essential to know the basic things of Import/Export code before getting into a process of business expansion. To bringing the small business to a huge international market. It is necessary to get the IE code. Keep an eye on this to know how the process is carried out and what are the things to remember while registering.

What is IE Code?

IEC (Import Export Code), the most important things for any business in a country without that, no exports or imports can be done inside or outside India. Bringing the products or services to the international markets in order to expand the business is an ultimate goal for any business personnel. As soon as the business starts to operate internationally, there are so many additional factors which must be taken into consideration. Those factors might be a great impact for success. IE code is the core of any large successful business.

Import export concept established due to some inadequate resources in each places. Each country is specified with some unique resources and also lack of other essential resources, this may prevent them to develop the overall economic status of the country. In some countries, they are rich in minerals, fossil fuels, and precious metals where other countries may experience shortage or lack of these resources. Some may have high educational systems and infrastructures, while others do not.

All business engaged in importing and exporting goods need to obtain import/export code. This code enables identify the seller of goods and reduces the illegal selling of goods or services. It is mandate for business dealings in export and import of goods to obtain IEC code before commencing imports and exports.

If suppose the import/export is service or technology, IEC is required only in limited circumstances. Specified services and technologies are restricted by the government since the Government of India pertain to national security such as dealing with automatic guns, nuclear weapons etc.

IEC code is a unique 10 digit code which is issued by Director General of Foreign Trade (DGFT).

Benefits of Import/export code:

Introduction of new product in the market:

Generally businesses in India and china are tending to produce more goods and services for the American and the European market. Main focus to do business there is because of the size and the purchasing power of the population. When a new product is introduced in that market, there may take one year to introduce the same product in other and smaller markets.

To be a leader in the international market:

Key benefit of importing products is a kind of opportunity to become a market leader. Manufacturing new improved and innovative products is a never ending process. Many business personnel in the world wide grab the chance to import unique products before their competitors do. Being the first to import new product will eventually make you lead in the import/export industry.

Cost Reduction:

Most important benefit of importing is the reduction in the manufacturing cost of the product. Nowadays importing products of car, bike, smartphones, computers, etc. and their products are more affordable when compared with producing them locally in the host country.

Customs Clearance:

The IE code will be very helpful for clearing the customs. Banks also requires the importers IE code while sending the money to abroad. While sending shipments, IE code must be quoted. Banks requires the exporters IE code in order to receive the money from the abroad.

Increases the sales profit:

Importing products facilitate to reduce the cost of businesses whereas exporting of products increases the sales and sale potential. Businesses which focus on exporting expand the business internationally, regionally and globally. Instead of selling the offerings in the local market to earn the profit, these businesses can be focussed on discovering new products in other countries to get a huge exposure.

No return filing:

IE code doesn’t require any filing of returns. Once the IE code is issued, there are no procedures to maintain the validity of IE code. There are no filings required for DGFT even if the import or export transaction occurs.

Life span of IE code:

 

IE code lifetime is up to the life of an entity. There is no need of renewal. All the import/export transaction can be done once the IE code is obtained. Without any further inconvenience, the process can be carried out once you got the IE code legally.

Proprietors can have IE code:

The proprietors of the business can obtain IE code in their name. It is not necessary to incorporate a business for obtaining IE code.

IEC not required under certain circumstances –Exceptional cases:

• Import/export of goods which are not connected with any agriculture, trade or manufacture.
• IE goods for personal use.
• Import/export of goods by ministries or governmental organisations or any notified charitable organisations.

Documents required for obtaining IEC:

• Self-certified copy of PAN card.
• Partners and directors list and their corresponding addresses need to be mentioned.
• Memorandum and Articles of association has to be attached. If it is a partnership firm, partnership deed duly notarised and self-certified need to be produced.
• Passport photographs of the signing authority.
• Date of formation of the company as per the agreement or as per the registrar of companies.
• Bank account details and the bank certificate.
• One thing to keep in mind is that the PAN is the prerequisite for granting IEC. One IEC can be issued against one pan.
• Company’s letter head for issue an IEC number.
• In case business premise is self-owned the sale deed agreement can be submitted. If suppose the premise is rental/leased, the electricity bills or the rental agreement can be produced.
• No Objection Certificate (NOC) from the landlord (if applicable).
• Certificate of incorporation need to be produced (in case of a company).

Procedures for obtaining Import/Export Code:

Step1:

All applications need to be made in Aayaat Niryaat Form 2A (ANF) format to DGFT in the particular region where the registered office of the company is situated.

Step2:

All the required details and documents need to be submitted along with the ANF 2A form. Digital signature is required in this form.

Step3:

Once the application got completed, it will be filed with DGFT and the required application fee to be paid to the government. The department of IEC may send back you the application for any correction or change. It is indeed to reply back within 15 days to DGFT.

Step4:

The application will be scrutinised by the examiner in the department. DGFT will allot a unique IE code for your business. IE code may come in both soft and hard copy. Once you receive the soft copy via e-mail, you can start processing your transaction.

 

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