Overview

 Import & Export Code, popularly known as IEC number, is a ten-digit unique number issued by the Directorate General of Foreign Trade (DGFT). IEC registration certificate is mandatory for businesses involved in import and export. Before initiating an import of goods into India, an importer must ensure the importing entity has both GST registration and IE code, as both are required to clear customs. Without an IE code and GST Registration, goods will be stuck at the port, incurring demurrage charges or could be destroyed.

Who needs Importer Exporter Code?

Businesses engaged in the export or import of goods or services

Any business that is involved in the export or import of goods or services is required to obtain an IEC. This includes businesses that export goods, import goods, provide services to clients outside India, or receive payments from clients outside India.

Individuals who engage in import or export activities

Individuals who engage in the import or export of goods or services are also required to obtain an IEC. This includes individuals who are engaged in small-scale import or export activities for personal or commercial purposes.

Exporters who wish to claim benefits under various schemes

Exporters who wish to claim benefits under various schemes, such as the Merchandise Exports from India Scheme (MEIS) or the Service Exports from India Scheme (SEIS), are required to obtain an IEC.

Importers who wish to clear customs

Importers who wish to clear customs for their imported goods are required to obtain an IEC. The IEC is used as a reference number for customs clearance and is mandatory for all importers.

Benefits of Import Export Code

IEC is essential for businesses entering the global market, as it supports growth and development. Some advantages of obtaining an IEC include:

1. Unlocks the international market, enabling a smoother entry for Indian companies and paving the way for growth and expansion.
2. Online registration process, making it hassle-free with minimal document submission.
3. IE Code has lifetime validity, so there are no issues with updating, filing, or renewing the registration.
4. Reduces illegal goods transportation by requiring authentic information during the application process.
5. Avails numerous benefits for importers and exporters, such as subsidies from Customs, Export Promotion Council, or other authorities.
6. No specific compliance requirements like annual filing or return filings.

Types of Firms Eligible for IEC

Different types of firms can obtain an IEC, including:

• Proprietorship Firm
• Partnership Firm
• Limited Liability Partnership
• Limited Company
• Trust
• Hindu Undivided Family (HUF)
• Society

Pre-Requisites for Applying for IEC

Before applying for an IEC, make sure you have:

• Valid login credentials to the DGFT portal (after registering on the DGFT portal)
• An active firm's PAN and details like Name as per PAN, Date of Birth or Incorporation
• A bank account in the name of the firm and a valid address

Note: These details will be validated with the Income Tax Department site.

Penalties for non-compliance with rules and regulations

Penalty for late submission of IEC application

If a business or individual fails to submit their IEC application within the prescribed time frame, they may be subject to a penalty. The penalty can vary depending on the time period of delay and can range from Rs. 1,000 to Rs. 10,000.

Penalty for incorrect information

If a business or individual provides incorrect information while applying for an IEC, they may be subject to a penalty. The penalty can range from Rs. 10,000 to Rs. 1 lakh, depending on the nature of the incorrect information provided.

Penalty for misuse of IEC

If a business or individual misuses their IEC, they may be subject to a penalty. Misuse of IEC includes using it for illegal activities or providing it to unauthorized persons. The penalty can range from Rs. 10,000 to Rs. 1 lakh, depending on the severity of the offense.

Penalty for non-compliance with export regulations

If a business or individual violates the export regulations, they may be subject to penalties. For example, if a business exports goods that are prohibited or restricted, they may be subject to a penalty of up to five times the value of the goods.

Penalty for non-compliance with import regulations

If a business or individual violates the import regulations, they may be subject to penalties. For example, if a business imports goods without the required licenses or permits, they may be subject to a penalty of up to three times the value of the goods.

Required Documents for IEC Registration

Prepare the following scanned documents for IEC registration:

• Proof of establishment/incorporation/registration (for Partnership, Registered Society, Trust, HUF, and others)
• Proof of address: Sale Deed, Rent agreement, Lease deed, Electricity bill, Telephone landline bill, Mobile post-paid bill, MoU, Partnership deed, or NOC if address proof is not in the applicant firm's name
• Proof of firm's bank account: Canceled cheque or bank certificate
• Active DSC or Aadhaar of the firm's member for submission
• Active firm's bank account for entering its details in the application and making online payment of the application fee