How to Apply for an Import-Export Code

  • An Import-Export Code is an important aspect of international trade
    • It is a key business identification number that is mandatory for Indian exporters and importers
    • This code is applicable to all types of businesses, including sole proprietorships, limited liability partnerships (LLPs), regular partnerships, limited companies, trusts, and societies
    • The code is assigned by the Directorate General of Foreign Trade (DGFT), which is the leading trade body in India
    • It comprises a 10-digit code which can be obtained from zonal/regional offices of the DGFT
  • There are several steps that need to be followed in order to apply for an Import-Export Code, which is also known as IEC.

Applying for an Import-Export Code Online

  • Before you apply for the IEC code online, you need to have certain documents in place. These documents will help you in ensuring that the process is completed without any hassles. Documents required for IEC Code are
    1. Permanent Account Number (PAN),
    2. Photographs,
    3. Identification proof,
    4. Address proof,
    5. Bank documents, as well as a
    6. Cancelled cheque
  • You must keep these documents ready before initiating your application so that you can register IEC Code online
  • Once you have all the required documents in place, you need to visit the DGFT portal in order to apply for the IEC
    • This application requires you to fill an online form which includes several columns including firm establishment details, address, identification numbers, as well as other information
    • After filling up the form, you will have to make a payment of ₹250 as part of the registration process. This fee can be paid online via all leading Indian banks
    • Thereafter, you need to upload all your documents for verification purposes. A digital copy of all documents is required in order to proceed

Getting Import-Export Code

  • After you have completed the above steps, you are ready to submit your application
    • At this stage, you will also receive an ecom reference number. Please keep this number handy as it will help you in tracking your application in the future
    • You also need to print the filled form and submit it to your nearest DGFT office
  •  According to the regulations, you should receive the IEC code within two working days
    • You will receive a 10-digit code that will enable you to engage in imports and exports
    • In case you do not receive the code within a few days, you can always visit the nearest DGFT office with your ecom reference number and check on the status of your application
    • In rare cases, you may be required to furnish some additional information. Once you have done this, you will receive the 10-digit code from the DGFT office

Thus, you need to follow all of the above steps in order to obtain the IEC. This code is critical for any importer or exporter in the country. In case you are facing any issues with your application or need to consult an expert, you can always seek help from external sources

How to Apply and Get an Import-Export License Online

  • In recent years, the import-export industry of India has become extremely important
    • Income levels are rising in India, thereby meaning that there is increased demand for certain products
    • As some of these products are not available in the country, businesses are engaging in imports in order to meet the demand
    • Similarly, Indian products are also exported to other countries. However, import and export activities in the country cannot be undertaken in the absence of an import-export license
  • Therefore, it is critical for Indian traders to obtain an import-export license

Applying for an Import-Export License

  • Before applying for an import-export license, you need to obtain the Import-Export Code (IEC). This code can be obtained from the Directorate General of Foreign Trade (DGFT)
  • After getting the IEC, you need to apply for an import-export license. The Foreign Trade Policy (FTP) of India allows traders to export all goods with the exception of restricted or prohibited goods
    • If you want to export or import prohibited goods, then you will have to drop this idea. This is because prohibited goods are completely banned in the country
    • However, if you want to obtain an import-export license for restricted goods, then you can do so
  • There are several items that fall under the restricted goods category. Some of these include live animals and birds, sandalwood, sand, soil, silkworms, etc.
    • If you are planning to import or export one of these items, then you will require an additional import-export license
    • You need to apply for the license on the DGFT website. In your application, you will have to explicitly mention that you are planning to import or export restricted items
    • Further, there are certain documents that are required for the application. Some of these include the profile of the importer/exporter, a copy of the purchase order, proof of online payment, and a Permanent Account Number (PAN)
    • In addition to the above, you will also need to provide an address proof, an identity proof, a cancelled cheque, and a no-objection certificate (NOC) wherever applicable

Getting Import-Export License

  • Once you have submitted your application along with all the documents, it will be processed by the government department
    • A pre-screening of your application takes place before it is forwarded to the higher authorities
    • In case of any errors or discrepancies, a deficiency letter is sent to you
    • After all such discrepancies are cleared, you will receive a response from the DGFT within 30 days
    • Upon approval of your application, you will receive an authorization letter which states that you are allowed to import or export the concerned product
    • Finally, you need to visit the regional authority with your letter and all the concerned documents. They will issue the import or export license to you within three working days

How to Get IGST on Import of Goods

  • In the year 2017, the Indian government announced the launch of Goods and Services Tax (GST) in the country
    • The launch of GST meant that there is an increased level of transparency and businesses do not need to pay multiple state-level taxes on their products
    • The implementation of GST has also meant that importers and exporters in the country are benefitting
  • However, in order to make the most of this tax regime, traders must be aware of the key workings of GST
    • There are three major components of GST including Integrated Goods and Services Tax (IGST), Central Goods & Services Tax (CGST), and State Goods & Services Tax (SGST)

The Process to Get IGST on Imports

  • Under the IGST Act that was introduced in the year 2017, imports are defined as bringing goods into India from a place outside India
    • IGST is charged on top of the basic customs duty that needs to be paid for the imports
    • In order to calculate the IGST, one must first calculate the value of the goods that are being imported into India
    • This can be done by using the formula:

Value of Goods for Calculating IGST = the assessable value of goods + basic customs duty + any other duty chargeable on the goods in question under any law for the time being in force

  • Consider the example of an importer who wants to import goods worth ₹100,000
    • In this case, a customs duty of 10% would be applicable, along with an education cess of 3%
    • Further, an IGST rate of 18% and a compensation cess of 15% would also apply to the goods
    • The assessable value of the goods here would be ₹100,000, the basic customs duty would be ₹10,000, and the education cess would be ₹300
    • Using the formula discussed above, the value of the goods would come out to be ₹110,300
    • Therefore, the IGST, in this case, comes out to be ₹19,854 and the compensation cess comes out to be ₹16,545
    • Thus, the total duty to be paid in this case would be ₹46,699
  • It is also important to note that certain other duties are also applicable to specific products. Examples of these duties include anti-dumping duties or safeguard duties

Thus, traders must be extremely careful while calculating IGST on their importers into the country. All duties must be paid on time in order to ensure the smooth arrival of goods into India

  • To conclude, it is clear that there are several steps to be followed in order to obtain an import-export license, import-export code and IGST. Institutions such as Euro Exim Bank offer customized support to traders in the form of financial instruments and bespoke trade advisory services. Euro Exim Bank offers financial instruments such as Bank Guarantees and Letters of Credit (LCs). Further information about Euro Exim Bank and its key product offerings is available here.