After a while, every business owner considers expanding their market. You’ve come to the right website if you own a company in India and are considering applying for an import export license to expand your company globally and access new markets. We have made an effort to address the complex subject of why import export code registration is significant in this article. Get in touch with LegalRaasta if you have any queries with an import export license. Here, we highlight the importance of IEC code registration.
An import-export license: what is it?
If you wish to get started, traders or business owners who want to import goods from international markets or export goods to foreign markets must have an import export license. After registration, the ten-digit numerical number has a lifetime validity, so you won’t have to worry about renewing it after a few years. If you wish to submit shipments through Customs, you must register your import export code.
Additionally, it is necessary to receive money in the bank account for the exported goods and transmit money to a foreign country through any bank. The Customs Authorities are paid with it, and it is also utilized to receive different government advantages. Therefore, connect to LegalRaasta for IEC registration before it’s too late to take advantage of these perks.
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Following are some advantages of having an import export license:
- Market Expansion: With an import export license, you can enter any new markets you wish to investigate. It would often result in an increase in income. For example, an Indian businessman who exports to the US, where the dollar has a higher value than the rupee, will be able to earn in dollars and live affluently in India. Additionally, you may easily expand your consumer base abroad by asking those who purchase from you to spread the news.
- No return filling: One of the main advantages of having an import export license is that you don’t have to file any returns. The license does not require the regular maintenance procedures that many other licenses do after you have it. Additionally, even if you conduct numerous export transactions, you are not required to file any returns with the DGFT.
- Benefit from Government Programs: The Indian government has introduced numerous programmes in accordance with its foreign trade strategy, which encourages imports and exports within the country. If you regularly import or export and have an import export license, you may be eligible for a number of government programmes, including the Duty Exemption and Remission Scheme, the Duty-free Import Authorization Scheme (DFIA), the Duty Drawback of Customs/Central Excise Duty/Service Tax, and many others.
- No Annual Compliance: An IEC license you obtain will be good for the duration that your business is in operation. It doesn’t require renewing or refreshing. However, you must give it up and notify the DGFT by filing a formal application if you want to cease using it.
- Easy Application Process: Applying for an IEC code registration is a simple process. The whole procedure can be finished quickly. Both registered businesses and unregistered businesses can easily apply for a license. If everything has been done correctly, the majority of firms may anticipate receiving the code in 10 working days. Additionally, keep in mind that you do not require a distinct IEC code if you have already registered for GST. At the transaction level, the GSTIN will serve as an identification number.
Situations Where IEC Is Necessary
- When an importer must pass through customs to clear his shipments, the customs officers demand iec code license.
- When an importer sends money abroad through a bank, the bank requires IEC Code registration.
- When an exporter needs to convey his shipments, the customs port wants it.
- A bank’s requirements must be met when an exporter receives payments in foreign currency directly into his bank account.
Are there Circumstances in which an IEC is Not Required?
The most recent government circular states that not every trader that is GST-registered is required to have an import export code. If the products being imported or exported are just being utilized for personal, non-commercial purposes, Import Export Code (IEC) need not be used. Notified charitable organizations may export and import through the departments and ministries of the Government of India without needing an import export code.
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IEC is not required for traders registered under GST, for example, is one of these circumstances. For import and export purposes, the trader’s PAN will be treated as a new IEC code in each of these cases. You do not require an import-export license if the products are imported and exported for personal use alone, not for any commercial purpose. You only need it if you want to use the products for business purposes or sell them to others. The import and export operations of the Ministries and Departments of the Government of India as well as the Notified Charitable Institutions are exempt from the requirement for an import export license.
Several prerequisites are necessary to launch an authorized import-export business in India
- Before beginning any business in India, you must establish your company as a legal organization. IEC code registration, which is used to register your business as a legal entity, requires the formation of a business, which can be a proprietor firm, a partnership firm, or a company.
- The least expensive type of business entity to incorporate is a proprietorship, which is available to individual business owners.
- Partnership firms must have a minimum of two partners and are subject to limitless liability for IEC Code registration.
- The most widely used structure for forming businesses in India. Large corporate organizations that want to conduct significant import and export operations must register as private limited companies.
- Such a registration is beneficial if one wants to work with large corporations in other countries and the company is registered as an LLP company with the central government’s ministry of corporate affairs.
- The PAN card, which is also required for iec code registration, is issued by the income tax department.
- Once a business has been registered and a PAN card has been issued for it, a current account must be created at any commercial private or public bank. To open a current account, the account must only be used for commercial purposes.
Final Words
In this blog we are talking about importance of iec registration which is required for importers to send money to overseas bank or products through customs and shipment or receiving money from foreign banks. In other words, IEC Registration is required for importers or exporters business.
Now, if you are a business owner who has an import-export license and you want to build the online presence of your business, then you must register on LegalRaasta legal advisor. With import export licenses, Legalraasta can help you expand your web presence throughout the world and simultaneously connect with a large number of potential customers. We hope you enjoyed our blog on import export code registration and you will share our blogs to other social media platform.