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This is a trade enabling code that as the name suggests, facilitates the international import and export of goods on a commercial basis. This can be issued to an individual or a company depending on the nature of the business under the Foreign Trade Act of 1992. It comprises of 10 digits, each IEC being unique to those it is being issued for and is compulsory for anyone wishing to carrying out a commercial import or export internationally in India. This applies to goods as well as services as enlisted by the government. IEC is not a necessary factor when one sends or receives products on a personal, non commercial basis or if the transaction is domestic.
For promoting entrepreneurship, the government provides special benefits to the small businesses in the form of subsidies and incentives. Also, banks give loans at concessional rates to set up these businesses. For availing those, the small businesses need to register under Micro, Small and Medium Enterprises (MSMEs) act. If a business is registered under MSMEs act, it can avail several benefits like cheaper bank loans, tax benefits, preference during the tender process, and access to various schemes and incentives of government. MSME stands for micro, small and medium enterprises and any enterprise that falls under any of these three categories.
MSME enterprises are the backbone of any economy and are an engine of economic growth, promoting equitable development for all.The IEC is issued on the basis of the Permanent Account Number which is a unique identification provided to taxpayers to authenticate the process. Hence the IEC does not need any renewal, can be cancelled when needed and is applicable to multiple branches of a company. The IEC does not require any filing or returns.Issued by DGFT in India, this IEC is a 10-digit number that is very important and a mandatory requirement for trade relations with international traders.
First, you need to prepare an application form in the specified format – Aayaat Niryaat Form no. 2A format and file it with the respective Regional office of DGFT.
- Step 2:
Secondly, you need to prepare the required documents with respect to your identity & legal entity and address proof with your bank details & the certificate in respect of ANF2A.
- Step 3:
One your application is completed, you need to file with DGFT via DSC (Digital Signature Certificate) and pay the required fee for the IEC Registration
- Step 4:
Finally, once your application is approved then you would receive the IEC Code in a soft copy from the government.
- When an importer has to clear his shipments from the customs then it’s needed by the customs authorities.
- When an importer sends money abroad through banks then it’s needed by the bank.
- When an exporter has to send his shipments then its needed by the customs port.
- When an exporter receives money in foreign currency directly into his bank account then its required by the bank.
- Expansion of Business IEC assists you in taking your services or product to the global market and grow your businesses.
- Availing Several Benefits The Companies could avail several benefits of their imports/ exports from the DGFT, Export Promotion Council, Customs, etc., on the basis of their IEC registration.
- No Filling of returns IEC does not require the filing of any returns. Once allotted, there isn’t any requirement to follow any sort of processes for sustaining its validity. Even for export transactions, there isn’t any requirement for filing any returns with DGFT.
- Easy Processing It is fairly easy to obtain IEC code from the DGFT within a period of 10 to 15 days after submitting the application. There isn’t any need to provide proof of any export or import for getting IEC code.
- No need for renewal IEC code is effective for the lifetime of an entity and requires no renewal. After it is obtained, it could be used by an entity against all export and import transactions.
IEC is a code required by business who are involved in imports and exports in India.
Under these circumstances importer exporter code is not required:
- Import/export of goods for personal use, which is not connected with trade, manufacture or agriculture.
- Import/export by government ministries and departments, and certain notified charitable organizations.
Any Person who is involved in import and export of goods and services in India must get a importer exporter code (IEC).
Generally it takes 3 to 7 days to get the IE code after the submission of all required documents and application.
There is no penalty on not having an IE code but import and export is not possible without an IE code.
The IE code is just a code. Once you have it, you can begin importing and exporting. You don't need to file the transactions done under this code or pay any taxes.
An IE code is valid for lifetime and thus it doesn't require a renewal.