What are the Benefits of Import Export Code in India?

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What are the Benefits of Import Export Code in India?

In the global market, the IEC number is a way to expand your customer base to the international level. Without IEC registration, it is not possible to import or export items from or to India. However, some traders don’t require this number but most of the business requires it. Having an exporter and importer license in India is required, and obtaining the license has several benefits. In the article, the benefits of export & import certification are shared.

What is the Import Export Code?

The registration of the IEC code is applied under CHAPTER III of the Foreign Trade (Development and Regulation) Act, 1992. This code is a 10-digit code issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industries, Government of India. Import-export code registration is mandatory for every individual or business that wants to participate in import-export activities. 

It is required to clear the customs to import or export the goods out of India. Without IEC registration the person cannot practice international trade. However, the size and nature of the business don’t matter, every business must acquire an IEC certificate. The IEC code helps the entity to participate in the global market and expand its products or services. Once you obtain an IEC certificate, you don’t need to renew it as it has a lifetime validity. 

Where the IE Code is Required?

Below are the several situations where the import export code is required:

• In case of import, the import-export code is required to clear the shipment.
• If the importer wants to send money abroad through the bank, then the bank requires an IE Code.
• If the exporter has to send his shipments then the customs port requires the code.
• In case the exporter receives money in foreign currency from the bank, then the bank requires an IE Code.

Where Import Export Code is Not Required?

As per the latest circular of the government, the Import Export Code is not mandatory for all traders. Their PAN number will be considered a new IEC code for the import and export of goods for personal purposes and not for commercial purposes. So, the other categories that don’t require import export code are as follows:

• Ministries or Departments of Central or State Government.
• Persons are importing or exporting goods for personal use and trade, manufacturing, or agriculture.
• The persons importing or exporting goods to or from Nepal and Myanmar through the Indo-Myanmar border areas, or China. They must check that the CIF value of a single consignment is at most Rs. 25000. 
• The exemption is not provided for exporting special chemicals, organisms, materials, equipment and technologies listed in Appendix 3 of Schedule 2 of ITC HS.

Benefits of Import Export Code

As per the Service Exports from India scheme, the exporter receives an incentive range from 3% to 5% of their net foreign exchange earnings. 

The registration provides importers and exporters with various subsidies to encourage trade by obtaining an IEC number. However, this boosts the Indian economy by reaching to the foreign markets. 

Because of imports, the production cost of many businesses gets reduced. For example: car spare parts and smartphones become cheaper. Also, this lowers the sales price of the product. This increases the demand for the product and increases the revenue. 

For exports, the traders focus on maintaining the sales potential of the product through the expanding markets. However, this creates a mark in the international market by becoming a recognised business. 

That’s why, having an Import Export Code is mandatory for trading goods and getting incentives and legal recognition from the government.

Why IEC Registration for a Business is Important?

The IEC registration has multiple benefits and some of them are as follows:

• The traders get a way to introduce their products in the international market and expand their area of trade.
• The process of registration is online and easy to do, a single portal is used for all purposes. The application form has a list of documents that must be attached to make the process simpler. 
• The documents required for IEC are less, and it just requires four documents. 1) PAN card 2) ID proof copy 3) passport size photograph 4) cancelled cheque.
• Once the importers and exporters register themselves and complete the IEC registration process. They don’t need to file annual or monthly returns. Also, they don’t need to pay the annual maintenance cost.
• After the registration, the entities are administered by a single authority, so the chances of illegal transportation are reduced. 
• Once the entity is registered, then the registration is valid for the lifetime and there is no requirement for renewal.
• Lastly, the government is providing multiple benefits to the registered traders under different schemes.

Conclusion

The Import Export Code open the possibilities for Indian businesses to reach the global markets. They can choose their target audience and by getting the code, the businesses increase the Indian economy, and position India in the global trade landscape. So, if you want to get an IEC number, then complete Import Export Code Registration. Reach out to Registrationwala, for any query, help you from application to final registration.

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