If you want your business to expand tremendously, it is important to highlight your services and brands in all sorts of international platforms. For this you need an import and export operation which is difficult for an individual and is made even more difficult by the various commercial and legal procedures international trade has.
Import Export License (IE Code)
- Online Application of IE Code
- Easy, Secure , Online Process
- Free Consulting for future query
What is an Import Export Code (IE Code) or an Import Export License:
To import certain goods in the Indian territories, it is important for the national administration to grant a document known as the import license. The license is a non – tariff barrier to trade and is used as a way to discriminate against another nation’s goods in international competition. The license can be sold to importing industries at a reasonable price or simply a set fee. The government has the authority to put certain restrictions on the number of important goods and services to be imported.
To carry out certain kinds of a transaction the person must have legal permission that is an export license. An export license is a legal certificate granted, for an exporter to export goods in the foreign market. To carry out import and export means to maintain a balanced trade relationship. The license is issued by an appropriate licensing agency. The license depends on the nature of products being transported as well as the destination port. The license is issued after a careful report of the facts surrounding the given export transaction. Therefore, an exporter must determine whether the products are good to be exported and if it needs an export license.
If a person thinks to import and export his/ her goods from the country then it is mandatory to get an import-export license or an IE Code and it also checks as to what products are shipped or delivered between international locations. If the import-export is of technology services then the IE Code is required for some limited circumstances. But if the import-export is in a specified technology that is where international marketing is restricted by the government of India as they are concerned regarding national security like dealing with nuclear weapons, autonomic guns and many more. For importing and exporting goods, it can benefit from details about what it takes to import-export automobiles, agriculture products, chemical, beverages, and edible products, pharmaceutical products, and industrial products. The IE Code is also important for availing advantages under schemes like MEIS ( Merchandise Export from India Scheme) and SEIS (Service Export from India Scheme). To get your import and export license you need to pay a required amount through electronic money transfer. Both Import and Export helps in bringing jobs to the local economy globally.
Authority:
The import and export license comprises of 10 digit number that is IE Code which is granted by the zonal or regional office of DGFT that is the Directorate General of Foreign Trade which has jurisdiction over the individual’s location of business. It is needed by any person in India who is seeking to import or export anything from the country to the other international countries.
Sample of import license:
The sample of import license consists of two copies and they are enlisted below:
Foreign change control copy:-
For opening letter of credit or to be utilized for effecting remittance to foreign sellers.
Customs copy:- It is utilized for presenting to customs authority enabling them to clear the goods. If an individual does not have a custom copy then the importer will be declared as an unauthorized import, liable for confiscation and forfeiture.
Categories of Import and Importers:
The imported goods are of the following four categories:
Firstly we have the freely importable items. Most of the capital products fall in this category. Thus, the products declared as feely importable items do not require an import license.
Secondly, we have licensed imports. Certain goods like semi-precious stones, products related to safety and security, seeds, plants and animals, some insecticides, pharmaceutical products, electronic items and 17 miscellaneous or special – category items can only be imported under an import license.
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Third, we have the canalized items. The items like petroleum, nitrogenous phosphatic, potassic and complex chemical fertilizers, vitamin A drugs, etc. can only be imported in India through specified channels or government agencies.
·And lastly, we have the prohibited items which comprise of just four things that are tallow fat, wild animals, animal rennet and unprocessed ivory that are banned for importation.
The categories of importers are divided based on products to be imported and its target buyers.
i. Actual users: To import any item for personal use and for business and trade purpose then an actual user must apply for the license.
Actual users are divided into two slabs:
a. General License: The general license can be used for the imports of products from all countries leaving those which are prohibited.
b. Specific License: This license can be used for the import of products from a specific country.
ii. Registered exporters: Are those who have a valid registration certificate granted by an export promotional council or other registered authority designed by the government for export transactions.
iii. And lastly the other category.
Difference between IE Code and Import Export License:
An applicant who has a wish to undertake any import or export operation is allotted a unique import-export code by the regional office of DGFT. This ‘Import and Export Code’ is also known as IE Code. The IEC remains valid unless it is canceled or surrendered by the applicant. It is a PAN (Personal Account Number) – based registration of an individual with the DGFT. Therefore, in conclusion, an individual cannot start an export-import transaction unless he /
she has a valid IE Code.
Coming to import and export license, it is a permission granted by the Central government to undertake any transaction of import or export related to goods that are restricted. There are various goods which are not freely permitted to be imported in India as the administration or government can impose restrictions on their import to India.
General Principles:
There are general principles leased on the import of certain restricted goods and they are:
To protect Public Mortals.
Protection of life and health of all living beings (humans, plants, and animals).
Prevention of prison labor.
To protect Intellectual Property Rights.
To protect our natural resources.
To conserve the holistic beauty of the environment.
Protection of artistic and archaeological value of National Treasure.
To discourage and limit traffic in arms, ammunition and war-related items as well as export and import of gold and silver.
Features of Import and Export Code:
The following are the features of the Import and Export license:
The IE Code is a 10 – digit numeric number assigned to the individual who is undertaking any export or import transaction.
The IE Code must be quoted while sending the shipment.
It is a PAN-based number and only one IE Code is allotted against one PAN number.
While receiving currency from abroad, banks require the exporters IE Code.
The entire process of allotment is online.
No export or import transactions can be carried out without the 10 digit code. Therefore, it is mandatory for you to have an IE Code.
IE Code is a unique identification of the applicant with the DGFT.
The IE Code number is a chief proof of a firm as an Exporter / Importer in India.
Documents required for an IE Code:
The following legal applications or documents one requires for registration are enlisted below:
A copy of the canceled cheque of the current bank account.
If it is a rented property then you need to have a No Objection Certificate along with the rented agreement.
A copy of the Permanent Account Number (PAN) Card.
Any utility bill like electricity bill, etc. of the premises.
Two copies of the applicant’s passport size photograph and a Aadhaar card or voter id card to justify your identity as well as your company.
Covering letter on the letterhead of the applicant’s enterprise to request for the issue of a fresh IE Code Certificate.
Procedure to obtain an IE Code :
The the very thing to know is whether you are eligible to obtain an import-export license or not. Then with the help of the given procedures, you can easily register for your license.
For the registration you need to file an application form that is assembled in the stipulated format of Aayaat Niryaat Form no. 2A and submit the same thing to the Regional Office of the DGFT. Go ahead by submitting all sorts of necessary documents like your identity proof followed by your address proof and bank details with a certificate according to ANF2A. Once you are done with the above-mentioned procedures, you have to continue by applying with DGFT via Digital Signature Certificate (DSC) and then pay the import and export license fees for obtaining the import-export registration.
Lastly, when your application has been approved, you will receive your import export registration code in a form of soft copy from the government. After the completion of the registration procedure, you will be provided with your Import Export License within 15 to 20 working days from the very date of issue.
Charges to be paid for registration:
You need to submit an application fee of Rs. 500/- with the above-listed documents.
If you are applying online then need to upload the scanned copies of all the legal applications and make electronic or online payment for the application fee to DGFT.
In the offline format you need to submit a demand draft of Rs. 500/- which can be paid to the Regional Office of DGFT. Just after this the certificate and receipt of the demand draft have to be sent along with the copy of documents to the nearest DGFT Office. With this, you also have to attach a self – addressed envelope with Rs. 25/- and a postal stamp for delivery of the IE Code certificate through registered post or else a challan/ DD of Rs. 100/- for the speedy post. The DGFT office should receive the physical application within 15 days from the very date of online submission of the form.
The validity of the License:
The import and export code is a permanent registration. So, there is nothing called as the validity period of the license. As it is a permanent registration, the applicant will not have to face difficulties once again for updating, filing and renewing the IE Code registration. Unlike other registrations like GST registration or PF (Provident Fund) registration, the importer or exporter does not require to file any filings or follow any other compliance required such as annual filing. The IE Code is valid until the business exists or the registration is surrendered or revoked. Thus, all companies and LLPs should obtain an IE Code after incorporation as it requires one-time registration and no additional compliance.
Inspection of the license:
The customs officials of the customs department usually scanned any kind of breach in the import license. The custom inspector and other officials have the authority to examine and assess the products to be imported. They also have the authority to charge penalties if any violation in the license is found to be done. They must determine whether imports conform to the description in the license or not.
Import Export policy:
The Import Export policy is also known as the Exim Policy. It is a set of rules and regulations as well as instructions related to the import and export of goods.
The government of our country, India ; notifies the Exim Policy for a period of 5 years ( 1997 – 2000) under section 5 of the Foreign Trade(Development and Regulation Act) 1992. All sorts of modification related to the Exim Policy is announced by the Union Minister of Commerce and Industry who coordinates with the Ministry of Finance, the DGFT and its network of regional offices. The important feature under Exim Policy is Canalization. Under these certain products ( like gold, in bulk can be imported by specified banks like SBI) can be imported only by designated agencies.
The policies of the government are very vast but some of them are listed below:
· The legal framework for foreign trade of India.
· The main features of the EPCG Scheme which are
i. eligibility for imports.
ii. Adjustment in the value of the EPCG License
iii. Amount of Export Obligations.
Green card facility.
Replacement of defective products.
Export of goods after repair.
Export of Imported products.
Private bonded warehouse for imports as well as export.
Preferential trading arrangement and India’s exports and many more.
Benefits of having an Import Export License:
There are numerous benefits one can enjoy after issuing an Import and Export License:-
It is proof of the applicant ( importer or exporter) in India.
No Annual Compliance.
It is a Government assisted trade.
It provides people with better quality. Acts as a license for importing and exporting goods in other territories. Products are cleared from the customs authorities with the the help of the IE Code number. It is submitted to various government authorities to gain benefits concerning their export and import from customs, Export Promotion Council, DGFT, etc.
It provides the details of the port from where the goods are being imported as well as exported along with the applicant’s code details.
With the help of this license, you can import as well as export goods abroad and increase the probability of gaining profits. Thus, helps in market expansion.
Thus, from the content, one can visualize the importance of having an IE Code as well as why it is mandatory. Numerous benefits can be gained for the global economy by obtaining an Import Export license. Trade in the international market helps to influence the strength of local economies, lowers the rate of unemployment and increases the opportunity in business. It also provides individuals to enjoy a large variety of edible items, clothing and many more. This results in the industries to gain more profit from their foreign customers. It could be easily said that imports and exports level the economic playing fields for all the developing countries.
In this unit, we have covered up all the necessary details one requires to register for an Import Export License.
We have also highlighted the benefits and profits one gains from foreign trade. We hope this piece of article will be propitious for our clients to register for an Import Export License in a very easy and serene way.