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Importer-Exporter Code (IEC) is a 10-digit unique identification number issued by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, Government of India.
Purpose of IEC:
IEC is mandatory for anyone looking to import or export goods and services from India. It acts as a business identity in foreign trade transactions.
Key Points:
– Required for customs clearance, shipment, and remittances.
– Valid for lifetime (no need to renew).
– Applicable to individuals, firms, LLPs, and companies.
– Issued based on PAN.
When IEC is Needed:
– When importing goods into India.
– When exporting goods or services from India.
– For receiving money in foreign currency from abroad.
Without IEC, import-export operations cannot be legally conducted in India.
Documents required for IEC registration
● Digital Signature Token
● PAN
● GST Registration
● Aadhaar card matching the PAN details
● Address details of the branch office
● Bank details of the IEC holder3
Eligibility for IEC registration
● Proprietorship firms
● Partnership firms
● Limited Liability Partnerships (LLPs)
● Private Limited and Public Limited Companies
● Hindu Undivided Families (HUFs)
● Trusts and NGOs involved in trade activities4
What are the benefits of IEC registration?
● Access to tax benefits and government schemes: Exporters who have an IEC can avail various export incentive schemes introduced by the government. They can also claim tax benefits on exports. For instance, exporters who file a Letter of Undertaking (LUT) under GST may be exempted from paying taxes on exported goods and services.
● Ease of global transactions: Obtaining an IEC makes all your cross-border transactions legal and easy. Additionally, having this code marks you as a verified importer/exporter. It reduces the illegal transportation of goods across the borders.
● Global market access: IEC facilitates entry into the international market, allowing organizations to showcase and sell products on global platforms.
● Lifetime validity: The IEC is effective for the entire lifespan of a business, reducing the need for lengthy renewal processes. Note: While IEC registration has lifetime validity, it needs to be updated annually online.
When is IEC required?
You will need an IEC registration to engage in any international trade activity, including:
● Importing goods into India: Required to clear shipments through customs, whether you’re bringing in raw materials, machinery, or products.
● Exporting goods or services: Required to ship products or offer services to customers outside India and receive payments.
● Applying for trade finance: Banks need a valid IEC to offer export-related financing.
● Claiming duty refunds or incentives: An IEC is needed to get benefits like duty drawbacks and other export incentives.
How to link IEC with DGFT and GST?
It is mandatory for every IEC holder to link their IEC with the DGFT website every year between April and June. For this, just log into the DGFT website and click on ‘Link IEC.’ Authenticate by using your Aadhaar-based OTP or with your registered DSC.
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