What is IEC and How to Apply for It?

When it comes to expanding a business, going international can be a very lucrative option. 

But before you go eyeing the global cake, you need to be wary of many regulations and compliances. 

The IEC, aka the Importer-Exporter Code, is a prerequisite you must deal with before you can set foot in the global market. 

Why? If you want to enter the import-export business in India, you need an IEC. 

It’s as simple as that. 

But don’t worry, the process isn’t complicated at all. In this article, we will tell you about the IEC and how you can apply for it. 

Let’s get started.

Understanding IEC

The Importer-Exporter Code (IEC) is a 10-digit alphanumeric code that acts as a key business identification number mandatory for exporting goods from or importing goods to India. 

An IEC is required for service or technology exports only if you seek benefits under the Foreign Trade Policy, with exemptions outlined in Para 2.07 of the Handbook of Procedures.

The IEC is issued by the DGFT (Directorate General of Foreign Trade), an Indian government agency responsible for regulating and promoting foreign trade. Its primary role is to implement the Foreign Trade Policy (FTP) to support exports and facilitate smooth trade relations between India and other countries.

With the introduction of GST in June 2017, the IEC is now the same as the firm's PAN. 

However, businesses must apply for an IEC separately through the DGFT. Whether you're running a proprietorship, partnership, LLP, limited company, trust, HUF, or society, you’ll need an IEC to engage in foreign trade.

Benefits and Importance

Yes, the IEC is almost mandatory when you want to get into trading internationally. But apart from being an essential document, it serves other purposes too, most important of which are as follows.

Multiple government incentives

As an exporter with an IEC, you can avail of various export incentive schemes undertaken by the government. Here are some of them: 

• EPCG Scheme: If your business needs to import capital goods for production, this scheme lets you do it without paying customs duty.

• Duty Drawback Scheme: The Duty Drawback Scheme facilitates the refund or reimbursement of customs and excise duties on inputs, as well as the GST paid on input services used in manufacturing export goods.

• RoDTEP Scheme: Get reimbursed for the taxes, duties, and levies you pay on your exports, helping you stay competitive.

• NIRVIK Scheme: If you're a small exporter, this scheme provides insurance coverage to safeguard your business.

• GST Refund for Exporters: Don't let GST eat into your profits—claim refunds on the GST paid for your exports.

Easy processing

Getting an IEC code from the DGFT is a straightforward process and typically takes one working day after submitting your application if there is no discrepancy in your information. You don’t need to provide proof of any export or import to obtain it.

Prerequisites and Documentation

You need the IEC. But to apply for it, it’s best if you are ready with some things. They are: 

• Your valid login credentials to the DGFT portal that you got after registering to the portal.
• An active Firm's Permanent Account Number (PAN) and its details like Name as per PAN and Date of Birth or Incorporation.
• The following scanned documents:
  • Proof of establishment/incorporation/registration
    • Partnership
    • Registered Society
    • Trust
    • HUF
    • Others
  • Proof of Address which can be any of the following documents:
    • Accepted Address Proofs: Sale deed, rent agreement, lease deed, electricity bill, telephone landline bill, mobile postpaid bill, MoU, or partnership deed.
    • Additional Documents for Proprietorships: Aadhaar card, passport, or voter ID.
    • If Address Proof is Not in the Firm’s Name: A No Objection Certificate (NOC) from the premises owner, along with the address proof, must be submitted as a single PDF document.
  • Proof of your firm’s bank account:
    • Cancelled cheque
    • Bank certificate
• You need an active DSC or Aadhaar of a firm member to complete the submission.
• You must have an active firm’s bank account to enter its details in the application and make the online payment of the application fee.

Application Process

Once you are ready with all of that, it’s time to initiate the application process. Let’s go step-by-step.

Step 1. Go to the DGFT website and log in with your credentials.

Step 2. After logging in, click on "Apply for IEC" on the dashboard, or use the menu path: "My Dashboard → Importer Exporter Code (IEC) → Apply for IEC.

Step 3. Click on the "Start Fresh Application" button, or if you have already saved a draft, click on "Proceed with Existing Application".

Step 4. Fill in the details in the General Information section.

1. Choose the nature of the concern/firm.
2. Enter the firm name.
3. Provide the PAN, name (as per the PAN database), and date of birth/date of incorporation. ,
   Note: These details will be verified in real-time from the CBDT database. Ensure the name matches the "first name, middle name, and last name" provided when registering for PAN with CBDT/NSDL.
4. Choose the preferred activities from the available options.
5. Answer whether the firm is located in a Special Economic Zone (SEZ) and whether it is part of the Export Oriented Unit (EOU) scheme, Electronic Hardware Technology Park (EHTP) scheme, Software Technology Park (STP) scheme, or Bio-Technology Park (BTP) scheme. These responses will determine the RA or SEZ mapping of the offices.
6. Enter the corporate entity number (CIN). After entering the CIN, the system will verify it with the Ministry of Corporate Affairs (MCA) server and fetch the firm and director details, if available.
7. Provide the GSTIN number of the concern/firm, if applicable.
8. Enter the firm’s mobile number (for correspondence with DGFT). The user can update the number after OTP validation.
9. Enter the firm’s email ID (for correspondence with DGFT). The user can update the email address after OTP validation.

10. Enter the firm’s address, city, and PIN code. Based on the entered PIN, the system will automatically select the state, district, and jurisdictional DGFT RA.
11. Attach the proof of the firm's address for verification. This is mandatory for address verification.
    1. Sale deed, rent agreement, lease deed, electricity bill, telephone landline bill, mobile postpaid bill, MoU, or partnership deed.
    2. Additional acceptable documents for proprietorships: Aadhaar card, passport, or voter ID.
    3. If the address proof is not in the firm’s name, a No Objection Certificate (NOC) from the premises owner, along with the address proof, must be submitted as a single PDF document.

12. Enter branch details, if applicable.
13. Provide the GSTIN number, address, city, and PIN code for any branch(es) linked to the above Importer Exporter Code.

Step 5. Fill in the details in the "Details of Proprietor/Partner/Director/Karta/Managing Trustee" section.

1. The DIN (Director Identification Number) is automatically fetched from the Ministry of Corporate Affairs based on the CIN number provided in the General Information section.
   Note: You won’t be able to delete director details fetched from the MCA.
2. Provide the PAN, name (as per PAN database), and date of birth/date of incorporation. These details will be verified in real-time from the CBDT database. Ensure the name matches the "first name, middle name, and last name" registered with CBDT/NSDL for PAN.
3. Enter the name, father’s name, address, city, PIN code, state, district, and mobile number of the proprietor, partner, director, karta, or managing trustee.
4. If the director is not an Indian national, tick the checkbox "Is the Director a Foreign National?"

Step 6. Fill in the details in the "Bank Account Details" section.

In the Bank Account section, provide the account number, account holder name, IFSC code, bank name, and branch name. Also, attach proof (such as a canceled bank cheque or bank certificate).

Note:

1. The account holder's name should match the firm name.
2. The bank details will be validated through the Public Financial Management System (PFMS).

Step 7. Fill in the details in the "Other Details (Export Sectors Preferred)" section. Select the appropriate reason for the question "Why are you applying for an IEC, or how will this IEC be utilized?"

Step 8. Read and Accept the Declaration

Under the declaration, accept the terms and conditions by clicking on the check box and entering place.

Step 9. Review the application summary and click the "Sign" button to sign the application using your digital token or Aadhaar

Step 10. Confirm and proceed to make the payment for the application. You will be redirected to the payment gateway (Bharatkosh). The IEC application fee is ₹500.

After you make the payment successfully, the page will redirect you to the DGFT website, where the receipt will be displayed. You can also download the receipt.

Step 11. You will receive the IEC certificate in the email you used while applying. You can also download the IEC certificate by logging into the DGFT website and using the "Print Certificate" feature under "Manage IEC."

The IEC will be transmitted to CBIC. You can check the transmission status by navigating to "My IEC" and looking at the "CBIC Transmission Status" in the IEC status bar.

Skip The Hassle With Bluno

So, that was the extensive application process you need to go through to apply for your IEC. Yes, the IEC is essential, and you cannot skip it. 

However, this is not the only thing you need to worry about. There’s also the process of creating a DSC or availing the many other services provided by the DGFT, all while maintaining due compliance so you don’t get into trouble. 

Seems too complex right? Wouldn’t it be great if you could just focus on your business and leave the complexities to experts? That’s where Bluno comes in. Our services ensure you get all the benefits without any headaches. Get in touch with us today.