Learn About the IEC License and the Process to Obtain It

A person wishing to start an import or export business in the country must have an Importer Exporter Code (IEC), a 10-digit code with a lifetime validity. It is issued by the Director-General of Foreign Trade (DGFT). Without this ten-digit IEC, neither importers nor exporters are eligible for crossing the border for business. This piece of content will provide a detailed guide on the IEC license generation process.

IEC Registration Process

The below-mentioned steps need to be followed to apply for the IEC registration process:

5. Go to the official portal of the DGFT website.
5. Go to the Sign-in option
5. Sign in with your email address, contact number, and address
5. Applicants need to fill out the application form with all the details
5. Address proof, bank details, and certification of incorporation
5. Then, submit the application through the digital signature certificate
5. You can also submit it through the Aadhaar verification procedure through OTP
5. This time you will be redirected to pay the fee of the portal online
5. Once the fee is paid, you have to download a PDF copy for further use or print
5. The application will reach the authority for verification and authentication
5. If the application is correct and in order, you will receive an IEC.
5. After logging in to the portal, you can download it.
5. The DGFT will provide the IEC code. Once the IEC code is created, you may print your certificate.

Documents Required for IEC Registration

The following documents are required for different types of companies or firms.

Proprietorship

• Digital portrait of the proprietor
• A copy of the applicant’s PAN card.
• Copy of voter's I-card, driver's license, passport (first and final pages), and UID (Aadhaar card) 
• The most recent electricity or phone bill, a sale deed (if the business location is self-owned), a rental or lease agreement (if the office is rented or leased), or both.
• Cancelled cheque with the applicant's name and account number preprinted, or bank certificate following ANF 2A (I).

Partnership Firm

• Digital portrait of the managing partner.
• A copy of the application entity's PAN card.
• Copy of voter's I-Card, driving license, passport (first and last pages), UID (Aadhaar Card), or PAN of the managing partner signing the application.
• Copies of partnership agreements.
• The most recent electricity or phone bill, a sale deed if the business location is self-owned, a rental or lease agreement if the office is rented or leased, or both.
• Bank Certificate following ANF 2A (I) or a voided check with the applicant entity's name and account number preprinted on it.

Private Limited Company or LLP or Section 8 Company

• The Designated Partner or Director of the Company must be shown in a digital photograph (3x3cms) signing the application.
• A copy of the application entity's PAN card.
• Copy of the voter's I-Card, driving license, PAN (any one of these), voter's passport (first and last pages), or voter's UID (Aadhaar card) of the managing partner or director signing the application.
• The most recent power or phone bill, the rental/lease agreement, or the certificate of incorporation as issued by the ROC Sale deed, if the business location is self-owned.
• A bank certificate under ANF 2 A(I)/a canceled check with the firm name and account number preprinted.

Hindu Undivided Family (HUF)

• 3x3 cm. digital image of the Karta.
• A copy of Karta's PAN card.
• Copy of Karta's driver's license, voter ID card, passport (first and last pages), or UID (Aadhaar card).
• The most recent electricity or phone bill, a sale deed if the business location is self-owned, a rental or lease agreement if the office is rented, or both.
• Cancelled cheque with the applicant's name and account number preprinted, or bank certificate following ANF 2A(I).

Society or Trust

• A 3-by-3-cm. digital portrait of the signing applicant, secretary, or chief executive
• A copy of the application entity's PAN card.
• Copy of voter's I-Card, driver's license, PAN, voter's passport (first and final pages), or voter's UID (Aadhaar card) of the Secretary, Chief Executive, or Managing Trustee signing the application.
• The most recent electricity or phone bill, a sale deed if the business location is self-owned, a rental or lease agreement if the office is rented or leased, or both.
• Copies of the Trust Deed and the Society's Registration Certificate
• Bank Certificate under ANF 2A(I)/Cancelled Cheques with the Account Number and the preprinted name of the Registered Society or Trust.

IEC Exemptions

The IEC exemptions are mentioned below:

5. Import/export by Departments of the State or Central Government or Ministries.
5. Individuals who import & export products for personal objectives unrelated to trade, agriculture, or manufacturing.
5. Parties or individuals who import or export products to/from Nepal and Myanmar with a single consignment shall not exceed a value of 25,000 through Indo-Myanmar border areas & China.

The Circumstances Where an IEC Is Required

The following details include the circumstances where an IEC is required:

• Importing Goods: It is necessary for businesses that are importing goods into India for economic and commercial purposes which ensure compliance with the import-export regulations and is vital for managing a capital structure.
• Exporting Goods: The companies or businesses that are exporting goods from India must have an import export license to comply with the customs regulations.
• Availing Export Incentives: Availing export incentives and benefiting from schemes for export promotions like the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS).
• Sending and Receiving Payments: An IEC is crucial to receive payments in foreign currencies to export goods and services.
• Customs Clearance: In import and export activities, the IEC is necessary for the customs clearance of goods at the ports and airports.

Eligibility Criteria for an IEC License

Let us look at the eligibility criteria for an IEC license:

• Indian Citizen: To apply for obtaining the IEC license, the candidate must be an Indian citizen.
• Business Entity: It is applicable to all types of business entities such as proprietorship, partnership, LLP, and companies.
• PAN Card: The individual or the business entity must have a valid PAN card.
• Bank Account: A business or an individual’s current bank account in their name.
• Business Registration: The essential business registration documents such as the partnership deed and incorporation certificate.
• GST Registration: Obtaining a GST registration is not mandatory in IEC but it is preferable for businesses.

Validity of the IEC Registration Process

The Importer Exporter code is valid for a lifetime and has no expiration date. As a result, updating, renewing, or applying for IEC Registration is not difficult. The registration is valid as long as the business is still operating or until it is canceled or given up. IEC Holder shall be responsible for updating the same as whenever a change takes place immediately, or at least, once in a year.

Cases Where an IEC License is not Needed

IEC is not needed for all GST-registered traders, according to the government's most recent circular. In each of these scenarios, the trader's PAN will be considered as a new IEC code for import and export purposes. If the products being imported or exported are just being utilized for personal, non-commercial purposes, the Importer Exporter Code is not required. Registered charitable organizations may export and import through the departments and ministries of the Government of India without needing an Import Export Code.

Essential Features of IEC Registration

Some of the essential features of IEC registration are mentioned in the following details:

• Increases Business

You can increase your business overseas through the export import code. Understand the need of Indian customers and foreign customers, and increase your business across the globe.

• Government Programs Are Beneficial

The Indian government assists the business owner to exporting goods from India. Therefore, having an IEC code makes it simple for exporters to get benefits from customs, DGFT export marketing programs, export promotion council, etc.

• Subsidies

Based on the IEC Code, a company that engages in import & export activities makes use of government-provided fare assistance.

Importance of Import and Export Code

There are a lot of benefits of having an Exporter Importer Code. Here are some of them.

• Unlocking International Market

Because the IEC Code is necessary for both import and export operations, it enables the items to be sold on the global market. The IE code facilitates an Indian company's entry into the global market and creates opportunities for development and expansion.

• Online Registration

Finding the IEC Code is a simple, hassle-free process that requires minimum paperwork submission.

• Fewer Papers Required

In India, relatively few documents are needed to receive an IEC Code. The list of the paperwork needed for acquiring an import-export code is available here.

1. 1. The applicant's PAN
   2. Canceled Cheques
   3. Applicant's photo
   4. Applicant’s address proof
   5. Some basic documents of incorporation

• Lifetime Validity:

The IEC Code registration is good for as long as the company is in operation. As a result, updating, submitting, & renewing Importer Exporter Code registration are all without problems. The IEC registration is valid as long as the business is active or as long as it isn't canceled or given up. Update your IEC instantly if any changes happen in your business details or at least once in a year.

• Reduces Transportation of Illegal Goods:

The import-export code's most fundamental provision is that you must give accurate information of goods. Transportation of illegal products and goods is prohibited under these criteria. So, illegal goods will automatically be restricted.

• Advantages of Schemes:

The IEC code provides significant advantages for both exporters and importers. The registered business enterprises will be eligible to receive advantages from Customs, the Export Promotion Council, or other agencies in the form of subsidies. Exporters can perform exports without paying taxes by submitting LUT under GST. If exports are made after paying taxes, the exporter may request a return of the tax amount paid.

• Compliance

In contrast to other tax registrations, carrying out an export or import does not need to meet any particular compliance requirements, such as the yearly filing or return filings. However, any change of the business or business details must be update as soon as it  happens or at least once in a year- as the case may be.

Conclusion

Anyone wishing to begin an importer-exporter firm in the nation must obtain an IEC, which is declared by the Director General of Foreign Trade. The 10-digit IEC is valid for an unlimited period. Without the Importer Exporter Code license, merchants who are primarily importers are unable to import products. In contrast, merchants who are primarily exporters are unable to receive advantages from DGFT for the export plan.

A corporate entity must have an import and export code, which is a 10-digit unique identifier provided by India's Directorate General of Foreign Trade (DGFT), to import and export goods. The Import and Export Code aids in the expansion of the company on a worldwide scale. Visit our website Online Legal India to get assistance from our professionals on getting an IEC license.

FAQs

Q1. Can I get my IEC registration done online?

Yes, you can get your IEC registration done online through DGFT portal. You can contact Online Legal India to file your application flawlessly.

Q2. What is an IEC license?

A vital company identification number required for exporting from or importing in India is an Importer-Exporter Code (IEC). Unless explicitly exempted, no person can export or import without an IEC.

Q3. Can I start an import-export business without acquiring an IEC license?

No, nobody can import or export without this code. However, there are some exemptions. Such as:

• Import/export by Departments of the State or Central Government or Ministries.
• Individuals who import & export products for personal objectives unrelated to trade, agriculture, or manufacturing.
• Parties or individuals who import or export products to/from Nepal and Myanmar with a single consignment shall not exceed a value of 25,000 through Indo-Myanmar border areas & China.

Q4. Is the validity of an IEC license for a lifetime?

Yes, the validity of an IEC license is for a lifetime. However, you have to update your details as soon as any declaration is provided from the government or change from your businesses’ end. You should update your details at least once in a year.

Q5. Is the need for IEC registration product-based?

No, the need for IEC registration is not product-based. For any type of goods or services involved in export or import business require it.