Importer – Exporter Code (IEC): Meaning, Process, Modification, Validity

In the realm of international trade, understanding regulatory requirements is crucial.

One essential requirement is the Importer-Exporter Code (IEC), a unique identifier necessary for any entity engaging in import and export activities.

The IEC ensures compliance and facilitates smooth cross-border operations.

But what exactly is the IEC, and why is it so important?

In this guide, we'll explore its significance, the application process, and the benefits it brings to businesses.

1. What is an IEC and how to apply for it?

An IEC is a 10-character alphanumeric number allotted to an entity and is a mandatory document for undertaking and import / export activities. Application for IEC is made online and it is issued by the Directorate General of Foreign Trade (DGFT). Upon introduction of GST, to maintain the unique identity of an entity, the IEC number is the same as Permanent Account Number (PAN). Thus, only one IEC shall be issued against a single PAN.

2. Is it mandatory to avail IEC for import / export of goods and services?

Yes, every importer / exporter of goods shall obtain an IEC prior to import / export of goods. For export of services or technology, IEC shall be there on the date of rendering of services for availing benefits under the Foreign Trade Policy (FTP). 

Few Categories are exempted from availing the IEC, thus they can import / export without obtaining the IEC. Such exempted categories of importers / exporters are as under – 

1. Importers covered by clause 3(1) [except sub- clauses (e) and (l)] and exporters covered by clause 3(2) [except sub-clauses (i) and (k)] of Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.

2. Ministries /Departments of Central or State Government

3. Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture.

4. Persons importing/exporting goods from/to Nepal; Bhutan; Myanmar (through Indo-Myanmar border areas); and China (through Gunji, Namgaya Shipkila and Nathula ports), provided that the CIF value of single consignment of import/export of goods from/to Nepal; Bhutan and Myanmar (through Indo-Myanmar border areas) does not exceed Indian Rs. 25,000/-; and in the case of China, (a) for import/export of goods through Gunji and Namgaya Shipkila, CIF value of single consignment does not exceed Indian Rs.1,00,000/-; and (b) for import/export of goods through Nathula, CIF value of single consignment does not exceed Rs.2,00,000/-.
   

3. Is the above exemption applicable for all Exports and Imports?

For export of SCOMET items by categories (i), (iii) and (iv) of Point 2 above, exemption from IEC is not applicable. 

4. What is the application process and application fees for IEC?

Application for IEC is to be submitted online, Importer / Exporters need to file Form ANF 2A on the DGFT Portal along with necessary documents. The Fee for applying to the IEC is Rupees Five Hundred.

5. How to modify the IEC and what is the fees for modification in the IEC

In case of any changes in the constitution of the firm, Director’s details, addresses, bank details or any other details, IEC holders need to update such changes within 30 days of such change.

6. What is the annual updating of IEC and what are the consequences if IEC is not updated?

An IEC holder is mandatorily required to update the details in the IEC every year during April – June period. In case, if there are no changes in IEC details, then also such updating is necessary. No fees are charged for updating the IEC during the above period. 

An IEC gets deactivated if not updated within the above period. AN IEC so deactivated becomes activated after its successful updation.

7. What is the validity of IEC?

IEC once allocated is permanently valid unless suspended / cancelled. An IEC will remain valid irrespective of a firm's status as a DTA unit or SEZ unit or an EOU/ EHTP/STP/BTP unit.

8. Can an IEC holder surrender its IEC?

If an IEC holder does not wish to operate an allotted IEC, they can surrender the same online to the DGFT. An IEC can be surrendered only if all authorizations / obligations have been closed for the IEC or in cases where the firm has been amalgamated / acquired / merged etc. with another entity such that all the authorizations / obligations are transferred to the IEC of the new entity.

Conclusion

The Importer-Exporter Code (IEC) is a cornerstone for businesses involved in international trade, providing a unique identifier that ensures regulatory compliance and smooth cross-border transactions. Understanding the significance of the IEC, the application process, and the exemptions can greatly benefit businesses aiming to expand their operations globally. As global trade continues to evolve, the IEC remains a vital tool for any business looking to thrive in the international marketplace. Ensure your business is well-equipped with this essential code to unlock the full potential of global trade.