To successfully transact an import or export transaction, you need to follow specific rules and laws
In India, Import Export Code (IEC) is one of the most important requirement for both import & export business
It is also called the Importer-Exporter Code
Let us know about the significance of IEC and how to obtain the IEC number
What is IEC?
An IEC is a 10-digit code allotted to a person that is mandatory for undertaking any export/ import activities issued by DGFT. No export or import shall be made by any person without obtaining an IEC
Now-a-days IEC is PAN based (XXXXX1234X)
Benefits for IEC
- Expand your business - You can expand your business by purchasing and selling products and services in the global market
- Government Incentives - You can receive several benefits from DGFT, as Government of India always promotes and supports Exporters
- Easy Processing - You can obtain the IEC code within 5 to 15 days. Moreover there is no obligation to import or Export after obtaining the IEC
- No Reporting - There is no requirement of any return filing
When is IEC required?
- When the Importer has to clear the goods from the Customs Authority, IEC is required
- When the importer sends money outside India, IEC is required by the Bank
- When the Exporter has to send goods outside India, IEC is needed by the Customs Port
- When the Exporter receives money in foreign currency, IEC is required by the Bank
Documents required for IEC registration
- PAN Card
- Voter ID or AADHAR or Passport
- Cancelled cheque of bank account
- Proof of Place of Business (rent agreement / electricity bill)
- Address details for delivering the Certificate of IEC by registered post
Tip for Exporters
Check out our video on Exports and refunds under GST here
Also Read: All you need to know about: Refunds under GST
Your IEC will get deactivated
- You won't be able to Import or Export from 01st July, as your IEC will be De-activated.
- DGFT has mandated all IEC holders to update their IEC every year between April to June( Trade Notice No. 1 dated 29th April, 2021 )
- Update your IEC to ensure smooth Import & Exports
- After 01st July 2022, IEC can be Re-activate only after updating on DGFT
- Even where there are no changes in IEC details, the same also needs to be confirmed online
FAQ
Q) Is there any tax on IEC?
No
Q) Do I need to mandatorily export or import after obtaining IEC?
No, there is no import or export obligation
Q) Do you need to renew IEC?
As such you need not renew the IEC, however, you need to update it every year before 30 June
Q) Do I need to file any returns?
No, once, an IEC is issued there are no further procedures required to maintain validity of the IEC. Even if import or export transactions occur, there are no filings required
CAclubindia
