Import Export Code (IEC)– Application Process and Documentation

Post Independence, India was following a more Socialist form of Economy. The era is also often known as the era of “License Raj”. There were different Licenses required for the simplest of things in this Country. Even for putting the Music system in your own car – there was a requirement for a license. Obviously, for doing business, there were licenses required for the simplest of things. It is estimated that there were 80 different agencies through which people had to obtain hundreds of licenses.  

Resolving the IEC Code mystery

Even for doing Import and Export of Business, many licenses were required in the past. Post 1990s, processes were simplified, and many licenses were abolished altogether. But still, a lot remains and needs to be complied with. These are also necessary as basic compliances need to be maintained to ensure that Businesses are regulated and structured. Currently, all Exporters and Importers of Goods and Services require a 10-digit code known as Importer-Exporter Code (IEC), which is issued by the Foreign Trade Department (DGFT). There is a simple process to do this, and requires basic efforts only – but remember one needs to be sufficiently knowledgeable on how to do this and furnish proper information to ensure that the application is not rejected by the government department. Click here to get your Importer-Exporter Code. 

Need for Registration

Why does the government require different identification numbers for various activities a business does?

The answer is simple – it acts as an Identification process and ensures that the same Document need not be filed again and again with different Government agencies. This is the main crux of different licenses and identification numbers.

PAN is required for Income tax purposes. Other than an individual, every entity requires to have a PAN number. Individuals, who are below a certain level of earnings, do not require to have a PAN. TAN- is required for tax deducted at source

MSME- is required for an entity to be identified as a micro, small or medium enterprise. Being registered as an MSME gives the entity many privileges. To know more click here. Thus, all companies need not have this registration. For example- Reliance Industries Limited is way too large an entity to be getting an MSME registration.

IEC- required only if a company will be importing any goods or services or exporting any goods or services. Thus, all entities need not have this registration.

Requirement of IEC Code

Why does the government require some identification number for various activities a business does. Answer is simple – it acts as an Identification process, and ensures that the same Document need not be filed again and again with different Government agencies. This is the main crux of different licenses and identification numbers. IEC code acts as identification numbers for all foreign trades (Manufacturing, Trading and even Services). This is required in all correspondence, for banking and foreign exchange clearances and also for customs clearances. Some of the key areas where IEC required and has advantages are 

1. Availing Government Subsidies and Export oriented Incentives – without IEC (if applicable), the government shall not give any subsidy/incentives. 
2. Clearing Foreign exchange transactions – Banks require this as a prerequisite for Foreign Exchange transactions 
3. Customs Clearances – IEC requires different forms of Customs, and goods will get stuck in Ports, unless this is given.
4. Making Business Scalable – As everyone knows that this is needed in Foreign Trade, people shall refuse to work with your organization if the IEC is not provided. Hence this is a prerequisite now for one to expand business beyond India.  

Application Process for obtaining IEC Code

Remember whether you are a Manufacturer, or a Trader, or simply providing services – IEC is must if you are importing or exporting anything. Fortunately, the government had made Application for IEC a relatively simple process; People need to keep following handy and then start the process

1. Name of the Organization 
2. Address of the Organization
3. Type of Business (Current, and future) for which the code is required 
4. Details of the Bank Accounts, including Bank Name, Branch, IFSC Code and Address
5. PAN Card or copy of the PAN card 
6.  Details of the Directors / Promoters / Partners 
7. Passport size Photographs of the Directors / Promoters / Partners

After keeping the following handy one needs to go to the DGFT web site and start applying for the IEC through the form ANF 2A.

Some other important points:

IEC number has to be renewd at time intervals?

The IEC number, once allotted to an applicant, is valid for all its unit(s) / branch(es) office(s)/ division(s) / factory(ies). once issued, it is valid always and does not require to be renewed at any time..

If hard copy of IEC is lost/ misplaced?

If the original IEC, is lost or misplaced, the issuing RA will grant a duplicate copy of the IEC based on an affidavit given by the entity. An FIR with the police station should be filed for faster movement in the application for a duplicate.

Can IEC be surrendered?

Yes, an entity may surrender the IEC issued in its name, if it has decided to opt out of the business of import/ export. It has to inform the issuing authority, and on receiving such a request the authority cancels it. An intimation is also sent by this authority to  DGFT and Customs authorities alongwith to the surrendering entity..

Modification in IEC

Sometimes, changes to the IEC registration has to be made. Like the entity may have changed its name or the PAN has been updated, the registered office has changed etc. In such cases the following process has to be followed:

make an application for modification with the office from where IEC was originally applied for.

Fill in the required form for modification of IEC details that require the modification/ updation. This application has to be filed within 90 days of the modification; else the entity has to pay penalties along with the application fee.

If a sole proprietorship business with an IEC (Importer-Exporter Code) decides to sell, give away, gift, or change ownership of the business, and the business will maintain itself as a sole-proprietorship, then this business owner should apply to update this change with the authorities. This application should also include the PAN (Permanent Account Number) details of the new owner.

But, if because of this change, the business becomes something other than a sole proprietorship business, then it should also apply to update this change with the authorities.

FAQ related to IEC Code

We have also answered some of the often asked questions about the IEC, please read them for better understanding

• Can an Individual apply for an IEC? 

Ans: Individuals can also apply for an IEC, They shall need to keep details of their Identification Proof, Bank Account, PAN, Address handy while applying for the IEC

• Do I need one IEC or multiple? 

Ans. Even if you have hundreds of branches across the country and are exporting through different ports – whether Land, Sea or Air – or Exporting multiple classes of goods or even Services and Goods separately. For all of these or for combination of all of these, you shall require only a single IEC. 

• Can I surrender my IEC Code if my Business stops?

Ans. Yes, you may surrender your IEC code at any given point of time. Remember that you should not Export or Import goods or services once you surrender. 

• Can I reapply and take a new IEC after surrendering the old one?

Ans. Yes, it is possible for an entity to reapply and get a new IEC if the need arises. 

• What compliances do I need to do to maintain the Validity of my IEC?

Ans. IEC code is given by the government for the lifetime of an Entity / Organization / Person. As such you may keep the IEC even if the Business stops. IEC does not require any kind of continuous filing or compliance requirements. It simply needs to be quoted everywhere. Just remember, if some particulars of your Business have changed, like chanorganizationsge in address or Bank Account etc, one should immediately go and update the same – so that IEC reflects true details at any given point of time and at all times. 

• What Businesses / Organizations are exempt from IEC?

Certain groups of people or certain organisations do not need Importer-Exporter Code (IEC) number for importing or exporting goods. Here are the entities that are exempted from this requirement:

• Importers who fall under a specific category mentioned in the government order from 1993, except for a couple of specific subcategories and exporters who also fall under a specific category mentioned in that order.
• Government ministries or departments at the central or state level.
• Individuals who import or export goods for their personal use that are not for any business, manufacturing, or farming purposes. They should not be using it for gainful employment.
• People who are importing or exporting goods to or from the country of Nepal. Here, the total value of the goods in one shipment should not be more than Rs. 25,000 in Indian currency.
• People who are importing or exporting goods to or from the country of Myanmar through certain border areas. Here, the total value of the goods in one shipment should not be more than Rs. 25,000 in Indian currency.

However, it's important to note that the exemption from needing an Importer-Exporter Code (IEC) number does not apply when exporting special chemicals, organisms, materials, equipment, and technologies (known as SCOMET) listed in a specific document (Appendix-3, Schedule 2 of the ITC(HS)), except in the case of the second category mentioned above (government ministries or departments).

Checklist for online application for Importer Exporter Code:

Check if you've filled out the correct application form as mentioned in Public Notice No. 84 dated 11-November-2011.

1. If you're applying for a new IE Code, you should use form ANF-2A and fill out parts A, B, and D only.
2. If you're making changes to your existing IE Code, use form ANF-2A and complete parts A, C, and D. (Use part B only if you are changing the address.)
3. Have you submitted your application along with all the necessary documents? Make sure they are all updated with page numbers and placed securely in a white colour file cover.
4. Have you completed all sections of the application, including providing an email address? If a section does not apply to you, write "NA". do not leave any blank sections.

Make sure that the following details are filled in correctly in Part-A of the form ANF-2A:

• Name
• Father’s Name
• Residential address,
• Telephone No. of either the Proprietor or each Partner or each Director or each Trustee

Ensure that you've clearly indicated your choice for sub-para i.e., i, ii, or iii under Para-5 of the Declaration/Undertaking.

The application has to be signed either by the Proprietor or the Partner or the Karta, or the Director. Each page should be self certified by the applicant. Applications signed by anyone other than the Proprietor, Partner, Karta, or Director will not be accepted and carries the risk of rejection/ resubmission.

Penalty has to be paid for any modifications done after 90 days from the date of the change.

If a bank certificate has been asked for, then it will be in the specified format in Part-B of ANF 2A, on the bank’s letterhead, without any additional clauses.

Verify that the Registered Office address in the bank's certificate matches the one in the application being made.

For Public and Private Limited companies, the registered office address and the list of Directors and their addresses will be the ones with which they have registered on the MCA portal.

A passport-sized photo of the applicant in jpeg format has to be attached to the form in the place mentioned therein.

self-certified copy of both sides of the PAN (Permanent Account Number) in the name of the applicant being the firm/company or LLP.

List of documents that will be required

For Proprietorship

• Scanned photo and ID proof (like Driving License, Passport, or Voter Card).
• PAN Card.
• Rent/Lease Agreement or Sale Deed (if business property is owned).

For Society/Trust:

• Scanned photo of the Secretary/CEO/Signing Authority.
• Registration Certificate and a copy of the Trust Deed.
• Rent/Lease Agreement or Sale Deed (if business property is owned).
• Bank Certificate as per ANF-2A or a Cancelled Cheque (with the name of the entity and Account Number).

For Partnership Firm/LLP:

• Partnership Deed.
• A list of partners with their scanned photo, ID proofs, and address proofs.
• Rent/Lease Agreement or Sale Deed (if business property is owned).
• Bank Certificate as per ANF-2A or a Cancelled Cheque (with the name of the entity and Account Number).

For OPC/Company:

• A list of all directors with their digital photographs, ID proofs, address proofs, and PAN Cards.
• Rent/Lease Agreement or Sale Deed (if business property is owned).
• Bank Certificate as per ANF-2A or a Cancelled Cheque (with the name of the entity and Account Number).

Closing Thoughts

Remember, the IEC is an important identification number/document – if you intend to get into Exports / Imports of goods and Services. This is for your own benefit and shall ensure speedier growth of your Business.