IMPORT-EXPORT CODE REGISTRATION

DEFINITION OF IMPORTER-EXPORTER CODE

An import export code license is a legal authorization that allows companies to engage in international trade of goods and services across borders. It is typically issued by governmental bodies and allows the license holder to import or export specified products by complying with applicable regulations, taxes and duties associated with such trade transactions. The license facilitates cross-border commerce by legitimizing the entity's trading activities under relevant laws.

INTRODUCTION TO IEC REGISTRATION IN INDIA

An import export license is an essential legal document required by companies and traders engaged in international commerce and trade across national borders. It is issued by governmental authorities to regulate and monitor the import and export of goods considered sensitive from an economic, security or environmental perspective.

The license sets out the products, quantities and values a company can trade as well as outlining compliance requirements related to customs controls, taxes and trade quotas. Obtaining an import export license enables legitimate cross-border trade while allowing officials to implement policy, protect domestic interests and collect duties where applicable.

The licensing system facilitates above-board international trade and ensures transparency for customs and enforcement agencies in time stamping documentation and performing necessary checks. The key purpose of an import export license is granting official permissions to companies to engage in importing and exporting activities which have implications from trade, security and compliance standpoints. It provides accountable oversight for goods movement across national jurisdictions.

Terminologies

• HARMONIZED SYSTEM (HS) CODE: A standardized numerical system to classify traded products developed by the World Customs Organization. It has over 5000 commodity groups.
• BILL OF LADING: A receipt given by the carrier for goods accepted for transportation. It is a document of title for shipped goods.
• CUSTOMS TARIFF NUMBERS: Codes assigned to imported goods based on the Harmonized System for calculating duties and taxes.
• DOCK RECEIPT/MATE'S RECEIPT: An acknowledgment issued by a shipping company indicating receipt of goods for shipment.
• EXPORT CONTROL CLASSIFICATION NUMBER (ECCN): Alphanumeric codes used in the US to identify dual-use items, technology and software subject to export controls.
• FREE ON BOARD (FOB): A trade term requiring the seller to deliver goods on board a vessel designated by the buyer.
• IMPORT EXPORT CODE (IEC): A 10 digit code required for importing/exporting goods in India. Issued by Directorate General of Foreign Trade.
• LETTER OF CREDIT (LC): A document sent from importer's bank to exporter's bank providing guarantee of payment upon presentation of specified documents.
• CERTIFICATE OF ORIGIN: An important international trade document attesting that goods in a particular export shipment have been wholly obtained, produced, manufactured or processed in a specific country.
• SHIPPING MARKS: Identifying marks and symbols stamped on packages to help in timely identification and delivery.

GOVERNMENT FEE

Import-Export Code (IEC):

• Mandatory for all businesses engaging in import or export activities in India.
• Cost: ?500 (government fee) paid online during application.
• Validity: 10 years.
• Application: Online through the DGFT website (Directorate General of Foreign Trade).

Additional Charges:

Customs duties: Vary depending on the type and value of imported goods. Calculated using HS Code (Harmonized System Code).

GST (Goods and Services Tax):Applicable on imported goods and domestic goods sold across states. Rates vary depending on the product category.

Other charges: May include port handling charges, transportation costs, inspection fees, etc.

PROCESS FOR IEC REGISTRATION

Here's a guide to the IEC registration process in India, incorporating visuals for clarity:

STEP 1- Upload Documents Attach scanned copies of mandatory documents:

PAN card, Address proof (Aadhaar card, utility bill, etc.), Business proof (registration certificate, GSTIN), Cancelled cheque, Digital Signature Certificate (DSC).

STEP 2- Pay Registration Fees

Pay the INR 500 registration fee online using a credit/debit card or net banking.

STEP 3- Submit Application

After completing all fields and uploading documents, submit the application. You'll receive an acknowledgment with a unique application reference number.

STEP 4- Verification and Approval

The DGFT will verify the information and documents. If everything is in order, you'll receive your IEC number via email or SMS within a few days

STEP 5- Download IEC Certificate

Log in to your DGFT account and download the IEC certificate for future reference.

WHO CAN APPLY

Here are the key parties who can apply for an import export license:

• Importers and Exporters:

Trading companies directly involved in importing and exporting various goods and services can apply for an import export code license to legally conduct international trade.

• Agents and Distributors:

Businesses that act as agents or distributors for international sales and commerce between a domestic manufacturer and foreign buyer would need licensing for undertaking these regulated activities.

• Limited Liability Partnerships & Private Limited Companies:

Business firms registered under these common corporate structures are eligible to apply if they aim to conduct cross border merchandise trade.

• Customs Brokers:

Customs brokerage firms that assist traders in meeting trade compliance, clearance formalities and transportation logistics can obtain licensing depending on the regulations.

• Export Oriented Units:

Businesses qualifying as EOUs that primarily focus on manufacturing goods for export also need to submit applications to relevant government departments controlling the trade.

• Commercial Banks:

Certain designated banks provide import-export code licensing facilities for capital goods and offer the possibility to withdraw money from the license as goods are imported and exported.

ADVANTAGES OF IEC REGISTRATION

• Access to Global Markets: An IEC acts as your passport to the global marketplace, enabling you to legally import and export goods across international borders. This opens up a vast network of potential customers and suppliers, expanding your business reach and revenue opportunities.
• Increased Credibility and Trust: Possessing an IEC signifies your commitment to legitimate trade practices. This boosts your reputation and builds trust among international partners, facilitating smoother business collaborations and transactions.
• Simplified Customs Clearance: An IEC serves as a unique identification number for your business, streamlining the customs clearance process for both imports and exports. This translates to faster turnaround times, reduced paperwork, and lower administrative costs.
• Eligibility for Government Benefits: Holding an IEC makes you eligible for various government incentives and schemes designed to promote exports. These can include tax rebates, duty exemptions, and financial assistance programs, giving your business a competitive edge in the international market.
• Competitive Advantage: An IEC equips you with the necessary infrastructure and tools to compete effectively in the global arena. This allows you to negotiate better deals with international suppliers, optimize your supply chain, and ultimately enhance your profitability.
• Business Growth and Expansion: By tapping into the international market, you unlock new avenues for growth and diversification. An IEC empowers you to explore new products, markets, and business models, propelling your business towards sustainable expansion.
• Enhanced Brand Recognition: Engaging in international trade can elevate your brand image and recognition beyond domestic borders. This fosters brand awareness and establishes your company as a reputable player in the global marketplace.
• Risk Management and Mitigation: An IEC facilitates compliance with international trade regulations and standards. This minimizes the risk of legal complications, trade disputes, and reputational damage, ensuring smooth and secure international operations.

HOW NKG CAN HELP??

For the past two decades, NKG has been helping more than five thousand clients worldwide, across the healthcare spectrum, to get their products registered. The dedicated regulatory team of NKG has more than ten years of experience in helping clients cross the hurdles they face while marketing their products to sell or distribute in India.

Have a query, drop it at [email protected]

1.A representative from NKG will contact you within 24 hours

2.A team will be assigned to help you.

3. Team will help you understand your product's regulatory requirements.

4. Team will help you to prepare the documents to comply with regulations.

5. The product marketed successfully.