What is IEC?
In this globalised world, one might think that international trade can be done by big corporations and conglomerates only. However, there is a tool which ensures a level playing field for all the businesses in India, especially MSMEs. The tool is often underrated but can be very useful for your business’s global success. The tool is none other than IEC, which expands to Import Export Code. In this article we will learn everything about it and how you can use it to take your business to global markets.
This code is required for every business which wants to import or export any sort of goods or services to or from India. Every business engaged in import/export business has a unique IEC, which is linked to the PAN of the business for accurate recording and tracing of each and every transaction for maintaining transparent trading records. Obtaining IEC is a mandatory requirement for any business seeing the global dream, without which its operations will be limited to domestic markets only. Therefore it is the first step for any Indian-origin business to step into global markets and explore the vast potential of internal markets.
Furthermore, the IEC is issued by the DGFT (Director General of Foreign Trade). Which is nothing but a 10-digit code enabling a business to legally import/export. This code has lifetime validity, however, it needs to be updated every year, even if there are no changes in your IEC profile. If you fail to do so it will result in the deactivation of your IEC. Which can only be reversed by updating your IEC profile.
Benefits of IEC
There are numerous benefits of IEC, major ones are listed below:
- Takes your business to the global level
- IEC once issued, has no expiry. You just need to update it yearly.
- Can be used to avail various benefits through government schemes such as subsidies, tariff exemptions, export promotion schemes etc.
- IEC enables easy processing for your business when interacting with customs and other similar authorities.
- IEC offers a very flexible regulatory framework and there is no requirement for return filings
- Also enhances the credibility of your business
How to Apply for IEC?
The process of obtaining IEC is very straightforward, you just need to follow the below-mentioned steps:
- Completing the Application: As stated earlier IEC is issued by DGFT. Therefore to obtain it an application needs to be submitted to DGFT along with the required documents and pieces of information.
- Filling of Application: The whole application for IEC is online, which needs to be done through the website of DGFT. You need to fill out the IEC form available there and upload the required documents.
- Fee Payment: After filing out the IEC form, the applicant is required to pay the government fees for processing the application. The updated fee for issuing the IEC is Rs. 500.
- Issue of IEC: After filing the application and payment of the fees, the IEC will be issued within 10-15 days. Provided that the information and documents provided were true and complete.
Documents Required
The following documents are required to apply for the IEC registration:
- PAN of the entity or individual as required
- Identity proof of the applicant such as Voter ID, Aadhar Card or Passport etc
- Proof of establishment, incorporation or registration of business, as applicable
- Proof of address of the business premises, such as the rent agreement, sale deed, utility bills etc, as applicable.
- Cancelled cheque of individual or the business as applicable
- An envelope addressed to self, for delivery of IEC certificate by registered post.
Validity of IEC
As stated above, once issued, it is valid for a lifetime. However yearly updation of your IEC profile is required even if there are no changes or amendments in the IEC details. If you fail to do so, it will be deactivated and will only be activated again by updation of the IEC profile.
Other Registration Requirements
Having an IEC is mandatory to begin your import/export business. However, it’s not enough to completely enable seamless, efficient and legal import/export. You would still need to obtain other mandatory registrations or licences as required for the goods or services you wish to import/export. For Instance: If you want to export Spices, then it is mandatory to do a registration with Spice Board. Similarly, Tea Board registration is required for exporting Tea and various other boards for various other commodities.
Costs Involved
The government fee for filling out the application for obtaining IEC is Rs 500. However one needs to bear additional costs for professional assistance in obtaining IEC, if the business wants to engage a professional in the process to make it seamless and effective in one go. The fees for professionals depend on various factors such as their expertise and experience in obtaining IECs. Generally, the professional fee varies from Rs. 1000 to 3000.
We at RegisterKaro, understand how crucial is the role of IEC in taking your domestic business to international levels. Our experienced professionals have years of expertise in IEC registration. We can assist you in obtaining your IEC seamlessly while you focus on your expansion strategies.
