Everything about import and export code 2020 - IEC 2020
When businesses grow, expanding to import and export is a best option. Whenever import and export takes place there are a number of rules and procedures to be followed.
Points covered in this article are
What is IEC?
Why is IEC necessary?
Exceptions to Import Export Code
Import Export Code registration
Documents necessary for IEC registration
Lifetime validity of IEC
Benefits of IEC registration
Additional benefits to exporters
1. What is IEC?
Import Export Code or also called as IEC is a 10 digit registration number to be acquired before importing or exporting goods and services. IEC is issued by Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industries, Government of India. It is mandatory to obtain IEC for anyone before importing or exporting
2. Why is IEC necessary?
Before starting business on a global level, obtaining an Import Export Code is mandatory. It is also required by
● Exporter’s bank requires IEC when the exporter receives money in foreign currency
● Customs port requires it when exporter has to send goods by shipment and when importer has to receive goods by shipment
● Importer’s bank needs IEC when money is sent abroad through the bank
3. Exceptions to Import Export Code
In certain cases, mandatory requirement of IEC is not applicable
IEC is not required if goods are imported/exported for personal use
Also, if import/export is for is by government ministries or departments
IEC is not required in case of import or export of the services except services of the natural security like gun, nuclear weapons etc.
If the importer/exporter has GST registration then IEC registration is not necessary as PAN itself will be considered as IEC
4. Import Export Code Registration
● Visit DGFT website https://dgft.gov.in/, Online IEC Application is to be clicked
● In the next step, PAN number is to be entered and submitted
● Then Name and date of incorporation of entity should be entered and submitted
● In the next step, Email ID and phone number registered with PAN will appear and after Captcha verification, Token generation is to be done
● Next, all the details of the entity is to be filled and required documents is to be uploaded
● After verification of details submitted and payment of fees code IEC can be generated hand on hand.
5. Documents necessary for IEC registration
The documents required to make IEC registration are only two. Those are
● Address proof of the entity like Memorandum of Association, PAN etc
● A blank cheque of the firm which mentions the name of the firm
(Note: Cheque should have the name of the Business entity if there is no name mentioned then a letter should be written your Bank for apporval)
6. Lifetime validity of IEC
Once registration is done and OEC is obtained, it is valid for the whole lifetime. It means that there is no need of renewal of IEC or any kind of upgradation
7. Benefits of obtaining IEC
There are many advantages for both importers and exporters through Import Export Code.
● Like the compliances under other tax registrations, filing monthly or yearly returns are not mandatory for IEC. After registration, there are no compliances
● IEC serves as a licence for businesses. It makes the intra nation transactions simple
● As there is no legal compliances to be followed, maintenance fee is zero
● Importers and exporters avail many benefits and incentives through DGFT, Export and Custom council
● It gives business permission to exchange goods and services in the global market. It can act as boost in the business
8. Additional benefits to exporters
IEC allows a simple transaction and also provides many incentives to exporters. They are-
Under the GST Act, exports are treated as a zero-rated supply and no gst charge on the transaction which are having place of supply outside India.
Exporters can also avail refund on tax which have already paid on input purchases.
Benefit of SEIS to service provider and MEIS to Manufacturer.
However, tax on inputs purchased to produce export goods are taxable. Also, the exemption can be availed for only which are produced by exporters not on trading goods which are purchased by exporter from other producer
If a person wants to expand his business to global level then registration for Import Export Code is mandatory. Without IEC the import/export will be considered as illegal business under the law. Obtaining IEC also gives a lot of benefits by expansion of business
Frequently asked questions
1. Can goods be exported/imported without Import Export Code?
IEC code is mandatory for import or export. Hence to transport goods legally, one should have IEC
2. Is PAN and IEC the same?
For any business where PAN is already obtained, new IEC registration is not required as PAN will be considered as IEC
3. Can one have more than one IEC against a single PAN?
Only one IEC is issued against one PAN. However, if a person owes different proprietorship than a single IEC is enough as the proprietorship does not have a separate legal entity. So the owners PAN is used for all firms
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