Businesses engaged in import or export of goods and services have to fulfill several legal requirements. One of them is the requirement to obtain Import Export Code (IEC), which is a unique 10-digit identification number issued by Directorate General of Foreign Trade online via DGFT portal. Obtaining an IEC is mandatory for most persons and businesses engaged in import/export of goods/services in India.
However, an IEC is not actually required in each and every case as certain persons, entities and categories of imports or exports are actually exempt from requirement to obtain one. In this blog post, we shall discuss import export code exemption so you can learn who is exempt and does not need it.
Import Export Code, abbreviated as IEC, is a unique identification code issued by the DGFT. It contains a total of 10 digits. Obtaining an IEC is mandatory for most import and export businesses in India but not all.
Certain categories are exempt from the requirement of obtaining this number. The process of securing an import export code is an entirely online process that needs to be completed through the official DGFT portal.
After completion of the process, the IEC is issued online through the same portal. IEC does not require traditional renewal because it never expires. With that being said, the IEC holder is required to complete an annual online update on the said portal between 1 April - 30 June every year.
Below, we have provided you with the IEC exemption list. Once you go through the entire list, you will learn who is exempt from obtaining the import export code from DGFT.
| S. No. | IEC Exemption Categories |
|---|---|
| 1. | Individuals importing or exporting goods intended for personal use. These goods must not be connected to trade, manufacturing or agriculture. |
| 2. | Ministries/Departments of Central/State Government. |
| 3. | Persons importing or exporting goods from/to following countries:-
|
| 4. | For exporting special chemicals, organisms, materials, equipment and technologies under Appendix 3 of Schedule 2 of ITC HS, IEC exemption does not apply except in case of exports by category 2. above. |
Generally speaking, IEC is required by most businesses dealing in export or import of goods and services. However, there are a few exemptions to this rule. This includes individuals importing or exporting goods for personal use, Central/State Government ministries and departments and persons importing or exporting goods to or from certain countries, subject to prescribed value limits. Entities not falling under any of the IEC exemption category must ensure obtaining the IEC in a timely manner.
For assistance in obtaining import export code for your business or in ensuring other business compliance requirements, you can get in touch with our experienced compliance consultants at Registrationwala.
Q1. Do I need to obtain IEC to send personal-use items or gifts to my family abroad?
A. No. In such a case, you are exempt from the requirement of obtaining IEC.
Q2. Do I need to obtain IEC to export goods to Nepal for business purposes?
A. If CIF value of a single consignment does not exceed Rs. 25,000, then you are exempt from the requirement to obtain IEC. If the CIF value of a single consignment exceeds the specified limit, then obtaining IEC becomes mandatory.
Q3. Am I exempt from obtaining IEC number if I want to import goods from Bhutan for business purposes?
A. Where the CIF value of a single consignment does not exceed Rs. 25,000, you are exempt from the requirement to obtain the IEC number registration. However, if the CIF value of a single consignment crosses the specified limit, obtaining IEC registration is mandatory.
Q4. Are Central/State government ministries and departments exempt from IEC registration?
A. Yes. Ministries and departments falling under the Central and State governments are exempt from IEC license registration.
Q5. Can I apply for IEC license offline?
A. No. You cannot apply for the IEC license offline. Physical filing is not allowed. You need to complete the entire IEC application process online by visiting the official DGFT gov in portal.
Q6. Can I get customs clearance without IEC number?
A. No. You cannot get customs clearance without IEC number unless you fall under an IEC exemption category.
Q7. Do I need IEC to buy clothes from a foreign website?
A. No. If you want to buy clothes from a foreign website for personal use, then you do not need IEC. However, if you want to buy clothes for business purposes, you need to obtain this number from DGFT.
Q8. Are IEC holders exempt from paying custom duties?
A. No. The IEC holders are required to pay the applicable custom duties.
Sunny Goel is a Chartered Accountant (CA) and the Senior Finance & Regulatory Consultant at Registrationwala. He has expertise in accounting, taxation, finance, regulatory compliance, and insurance compliance. He writes simple and easy-to-understand content to help businesses understand financial rules, tax laws, insurance regulations, compliance requirements, and other regulatory matters.
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