Many businessmen ask what steps one should take to start an export business in India. The first thing should be applying for an Import Export Code (IEC). It is a unique 10-digit number issued by the Directorate General of Foreign Trade (DGFT) that is mandatory for all exporters and importers dealing with international shipments of products.
Here is the explainer guide for the IEC Code.
Need for an IEC Code
Taking an IEC is one of the essential steps for starting an import-export business from India. Here are critical points on the need for an IEC:
- Easy business registration
As both registered and unregistered businesses can apply for IEC on the DGFT website, it makes the entire business registration process much easier. After all required documents have been submitted, it takes just ten days to get the IEC from DGFT. If a business is registered under GST, then that number can also be used as the IEC.
- Access to government incentives
Several export incentive schemes have been launched by the government, like the market access initiative, MEIS, etc. These incentives can only be availed by individuals that have an IEC. An exporter can also use the IEC to furnish a Letter of Undertaking (LUT) under GST without paying integrated tax.
- Global transactions
Securing an IEC for business allows a business to complete international transactions without much hassle seamlessly. An IEC helps identify a verified importer and exporter in global markets.
How to get an IEC code?
An exporter or importer needs to submit the following documents to get an IEC:
- Aadhaar Card
- Cancelled Cheque
- Business proof (GST Registration or incorporation certificate)
- Digital Signature Certificate (DSC)
How to apply for IEC code?
An exporter or importer can follow these steps to apply for IEC:
- Log into DGFT Website. Select Services and then choose IEC from the drop-down list.
- Click on the Online IEC application. The user then needs to submit the PAN Number.
- Fill up the application form. Add business and partner details in this stage.
- Upload documents mentioned as scanned copies. The format can be PDF or GIF. Once the documents are uploaded, the user will have to pay a nominal fee.
- After completing all the steps, the user can preview the form and print it as a record for official purposes.
IEC will be generated once the application is verified and approved by the DGFT. The user must go to the Services tab on the DGFT website for the IEC after logging in. Scroll down to ‘My IEC’ and then select ‘Print IEC’. This is the easiest way to download the IEC.
Apart from getting an IEC for business, it is equally essential to ensure that the correct details are reflected in a user’s IEC profile. Any change in PAN, Director(s), or addition/deletion of a partner needs to be updated regularly on the DGFT website.
How to edit and renew IEC?
Importers and exporters must renew IEC each year in the April-June period. Non-renewal can lead to the deactivation of the IEC. A user can follow these steps to edit and renew IEC:
- Log into the DGFT website
- Click on Update/Modify IEC
- Click on update details and submit
How to cancel IEC?
In case an exporter or importer wants to cancel the IEC code, they need to file an online request on the DGFT website. The required documents will need to be submitted to surrender IEC. After the application is verified and approved, the IEC would stand cancelled, and all import-export transactions in the future would be revoked.
How to link IEC with DGFT and GST?
All importers and exporters must link their IEC with the DGFT each year between April-June period. It can be done by logging into the DGFT website and clicking on ‘link IEC’. The user needs to authenticate by entering the OTP received.
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