With an IEC code, traders can avail several benefits provided by the Government of India like different import/export schemes, easy registration and no future compliance or renewal.
The Importer-Exporter-Code (IEC) is registered under the Customs Duties Act 1962. This license allows the trader to import and export things outside the national boundaries.
Why should you register for IEC Code?
If you are a trader or want to import/export outside India, then it is necessary for you to get an Import Export License. It is a 10-digit numeric code which is valid for a lifetime once you register it.
Without this license, you will not be able to import/export anything outside Indian borders since you would require the IEC Code when-
- An exporter is sending shipments at the Customs Port.
- An importer sends money abroad through the Bank.
- An exporter receives money directly in the bank account.
- You pay to the Customs Authorities.
To avail benefits from the Government, it is necessary to have an IEC Code Registration.
Benefits of IEC Registration in India
The registration of Import Export License allows you to increase the scope of your business. You can import/export outside India and increase the probability of gaining profits. This will increase business relations with other countries and improve the goodwill of your company.
Easy Registration Process
The Directorate General of Foreign Trade (DGFT) has initiated an online process for ICE registration. Both registered and unregistered businesses can apply for the license and get the code within 10 working days.
In case you have registered yourself under GST, then you do not need a separate LEC code. Your GSTIN will be used as an identifier at the transaction level.
No Annual Compliance
Once registered, the Import-Export License is valid for a lifetime which means that you do not require re-filing or renewing it. It is a permanent license which is valid till your business exists.
However; if you do not wish to use the license or operate the business, then you will have to surrender the same by informing DGFT through a written application.
The Government has launched various schemes under the Foreign Trade Policy to promote imports and exports in India.
Exports from India Scheme
There are two schemes under this category which are -
Merchandise Exports from India Scheme (MEIS)
This scheme offers certain rewards and incentives to the exporters at a specified rate which might vary with different products. The incentive is granted in the form of duty credit scrips which are freely transferrable.
The credit scrips are offered on the realised Free on Board (FOB) value of exports in free foreign exchange at a rate of 2% to 5%. You can use these credit scrips to make payment of customs duties, service tax and excise duty.
Service Exports from India Scheme (SEIS)
The Government offers 3% to 5% of incentives (on the net foreign exchange earned) to all service providers who give services outside India. The incentives given in the form of credit scrips can be sold or transferred to some other person also.
You can also pay different taxes during the import/export of goods using the credit scrips.
Duty Exemption and Remission Scheme
This scheme focuses to improve the condition of Imports in India and include several different schemes under it. The important ones include -
Duty-free Import Authorization Scheme (DFIA)
This scheme allows duty-free imports of goods for which a minimum value addition of 20% needs to be fulfilled. It will be exempted only from the payment of basic customs duty.
Duty Drawback of Customs/Central Excise Duty/Service Tax
You can claim the refund of the duty for products which are made out of duty paid inputs. The refund can be claimed by –
- All Industry Rates and,
- Brand Rate
You can also claim for the refund of service tax which is paid on the services used for export of goods.
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