Forex

Navigating Import Export Code (IEC): Karbon's Top 10 Answers

#1 What is an Import-Export code?

The Import Export Code (IEC code) is a distinctive 10-digit identification number issued by the Department of Commerce under the Government of India. This code carries considerable significance for enterprises engaged in the import and export of goods within India, as it is a compulsory prerequisite for such operations.

Often referred to as the Import Export Code, this special number is essential for businesses intending to transport goods across Indian borders. Without obtaining the IEC code, companies cannot engage in legal import or export activities within India. It is a crucial prerequisite for businesses operating within the framework of Indian trade regulations.

#2 How do I get an Import Export code?

Securing an Import Export Code (IEC) in India is a streamlined process. Embark on your journey into international trade with these steps:

  • Visit the DGFT Website:

Head to the official DGFT website at dgft.gov.in to initiate the application process.

  • Create a User Account:

If you don't have an account, sign up on the DGFT portal, providing accurate details for a smooth application experience.

  • Access the IEC Online Application:

Log in to your DGFT account and locate the Import Export Code (IEC) application form.

  • Complete the Application Form:

Fill in crucial details about your business, including its name, address, and PAN (Permanent Account Number). Accuracy is vital to prevent processing delays.

  • Upload Required Documents:

Prepare digital copies of mandatory documents like your PAN card, proof of identity, address proof, and a canceled cheque or bank certificate. Upload these securely.

  • Payment of Application Fee:

Utilize the online remittance payment options on the official portal to pay the applicable IEC application fee.

  • Submit Your Application:

Please carefully review all provided information and uploaded documents before submitting your application. Once you are content with the accuracy and completeness of the details, proceed to submit the form for further processing.

  • Application Processing:

The DGFT will process your application, and you can track its status through the online portal to stay informed about progress.

  • IEC Issuance:

Upon approval, your unique 10-digit Import Export Code (IEC) will be generated. Download your IEC certificate from the portal.

  • Commence Import-Export Activities:

Armed with your IEC, you're now ready to engage in outbound international trade. Use the code for customs clearance and other transactions, contributing to the global growth of your business.

#3 What is an example of an Import Export code?

This code is crucial as it serves to identify those involved in trading activities, and having it is a necessity if you plan to import or export goods to or from India.

To give you an idea, an IEC code might look something like this: IEC Code: 0512*XX. It's a combination of numbers and letters, like a secret ID unique to each person or business. This code becomes your distinct identifier. It's used whenever you're part of international trade processes, such as going through customs. This ensures everything is handled correctly and all the necessary paperwork is in order when bringing goods into or sending them out of India.

An absolute requirement for individuals or businesses involved in importing or exporting goods and services, the IEC acts as a unique identifier in all international trade transactions. Its pivotal role extends to facilitating customs clearance and aiding the government in monitoring and regulating foreign trade activities.

#4 Is a GST certificate required to get an Import Export code?

The connection between the Goods and Services Tax (GST) and the Import Export Code (IEC) in India is not direct. 

GST (Goods and Services Tax) is a consumption-based tax levied on the supply of goods and services within the geographical boundaries of India. While it is not directly associated with the IEC (Import Export Code), GST applies to businesses engaged in the provision of goods or services, encompassing those participating in import and export operations.

When goods are imported into India, GST is levied on the imported items during the customs clearance process.

Make Note: This taxation process is separate from the IEC's realm, as the IEC primarily focuses on the identification and regulation of importers and exporters, ensuring compliance with international trade regulations.

#5 Who is exempted from the Import Export code?

In India, certain entities are exempted from obtaining an Import Export Code (IEC). The following categories are typically exempt from the mandatory requirement of an IEC:

  1. Individuals for Personal Use:

Individuals importing or exporting goods for personal use and not for any commercial purpose may be exempt from obtaining an IEC.

  1. Government Departments and Ministries:

Government departments and ministries engaging in import or export activities for official purposes are generally exempt from IEC requirements.

  1. Certain Special Economic Zones (SEZs):

Entities located in Special Economic Zones (SEZs) for specified transactions may be exempt from the IEC requirement.

  1. Diplomatic and Consular Missions:

Diplomatic and consular missions, as well as personnel from foreign embassies and consulates, may be exempt from obtaining an IEC.

  1. Import or Export of Goods for Personal Gifts:

Individuals importing or exporting goods as personal gifts and not for commercial purposes may be exempt from IEC requirements up to a specified value.

#6 What is an Import - Export number in India?

Here are key points about the IEC number in India:

  • Identification: The IEC number serves as a unique identifier for entities engaging in international trade. It is mandatory for conducting import and export transactions.

  • Issuance: Under the Ministry of Commerce and Industry, issues the IEC number to eligible applicants. It is provided after the verification of the application and relevant documents.

  • Format: The IEC number is a 10-digit code. It doesn't carry any information about the entity, and the digits are randomly assigned.

  • Mandatory Requirement: Having an IEC number is a prerequisite for clearing customs, sending or receiving money from foreign countries, and engaging in international trade activities.

  • Application Process: Businesses can apply through the official online portal to obtain an import-export code. The application involves providing business details, PAN (Permanent Account Number), and submitting supporting documents.

  • Use in Transactions: The IEC number is used for international payments and in trade documents and transactions, such as customs declarations, shipping bills, and invoices. It facilitates smooth communication with customs authorities and regulatory bodies.

#7 What is the import-export transaction code?

In India, import and export transactions are commonly distinguished and controlled through specific codes:

The Importer Exporter Code (IEC) functions as a primary identification number for customs authorities and is utilized in various documents and transactions related to international trade. It is used as a reference while processing cross-border payments.

#8 Who is eligible for the Import Export code?

In India, the following entities are eligible to obtain an Import Export Code (IEC):

  1. Individuals: Any individual, including proprietors, can apply for an IEC if they are involved in international trade.

  1. Companies: Entities of various forms, including private limited companies, public limited companies, and sole proprietorships, are eligible to obtain an Import Export

  1. Partnership Firms: Partnership firms have the option to apply for an Import Export Code (IEC) to participate in import and export endeavors.

  1. Limited Liability Partnerships (LLPs): LLPs can obtain an IEC to facilitate international trade transactions.

  1. Hindu Undivided Families (HUFs): HUFs involved in international trade are eligible for an IEC.

  1. Society: Societies, including educational and charitable institutions, can obtain an IEC for international trade purposes.

  1. Joint Ventures: Entities formed through joint ventures, whether with Indian or foreign partners, are eligible for an IEC.

  1. Government Departments: Various government departments may also apply for an IEC if they are involved in import or export transactions.

#9 Is the Import-Export code the same as the PAN number?

No. 

The Import Export Code (IEC) is not the same as the PAN (Permanent Account Number) in India. These are two distinct identification numbers, each serving different purposes.

Import Export Code (IEC):

  1. Function: It's mainly for people and businesses involved in global trade, helping them bring in or send out goods and services.

  1. Application: Entities or individuals involved in cross-border trade must apply for and obtain an IEC to facilitate customs clearance and other international trade transactions.

Permanent Account Number (PAN):

The Import Export Code (IEC) number is issued by the Directorate General of Foreign Trade (DGFT), while the Permanent Account Number (PAN), a 10-digit alphanumeric code, is issued by the Income Tax Department of India.

  1. Function: The primary purpose of PAN is to monitor financial transactions and ensure adherence to tax regulations. It is essential for various financial activities such as filing income tax returns, opening a bank account, and conducting financial transactions exceeding a specified threshold.

  1. Application: PAN is obtained by individuals and entities for income tax-related purposes and is not specific to international trade activities.

#10 What is the Import- export trade code?

If you're a person or a business doing import or export work in India, you must have an import-export code (IEC). It's really important because it helps make the process of moving things in and out of the country smoother. Customs authorities, the people who check what's coming and going, use this special number when goods are being checked at different ports.

For those who want to be part of the active world of importing and exporting in India, getting an IEC is a big and necessary first step. 

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