Import Export Code: Strengthening Small Businesses Globally
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Growth is an integral component of any small business. The survival and sustenance of any small business is directly proportional to its participation in the market with that of big players. Growth ensures that the small business remains in operation for a long time and reduces its possibility of getting closed. It is therefore highly crucial as a matter of fact that these small businesses must be strengthened to the core.
Any small business that wishes to open its avenues at a global level must understand that its growth is dependent on the sincere allocation of its resources, earning sustainable profits coupled with optimization.
Growth is in itself a very subjective term and entails variation in the types and its related levels. Different businesses experience growth in varied manners. The journey to growth is also full of disruptions and uncertainties.
Small businesses have witnessed escalated importance in the recent years. It is no hidden fact that they very well contribute towards the development of economic growth, creation of wealth and generation of jobs.
Setting up Small Business at Global Level
Business owners these days are seeking to expand the portals of their business beyond the walls of domestic markets. It has become part and parcel of their vision to make their standing at a global level.
The only way out to be able to cope up with the intricacies and survive in an environment that presents unexpected competition, stands at knowing the fact that the transition from the small business to a big business shall take place only through diversifying the business and escalating it globally.
Besides these things, it is critical for any owner of a small business to know that setting up the business at a global level is not a cakewalk. Along with it, comes the need of fetching up a few things and also mandates having a good network to support business.
So, if your initial business is located in India, make sure you comply with all the prior formalities and conform to all the rules and laws in place. Further you would need to fetch a few licenses to initiate the business beyond domestic markets.
What does it mean by IEC?
IEC stands to mean import export code. This is a license required by any business owner who wishes to start an import export business from India. This license which is also known as importer exporter code is duly issued under the authority of Director General of foreign trade i.e. DGFT.
The IEC code consists of ten digits which is backed up by a validity stretching to a period of lifetime. This license is highly required by the merchants involved in the import and export business. Also, after this license has been acquired, the business owner is able to avail many benefits.
This IEC code is required under many situations. Some of them can be jotted down as follows:
- IEC code is required in the event wherein the importer seeks to clear the shipments that too from the customs and after that is deemed necessary by the customs authorities.
- This code is documented by the bank in the case, wherein the money is sent by the importer via the banks.
- His code is very well required by the customs port in the event wherein the shipments are needed to be sent by the customs port.
- The IEC code is required by the banks for carrying out verification in the event money is received by the exporter in his bank account directly.
Which Business Types are Required to Fetch IEC Code?
This code, which is known as Importer exporter code is required to be fetched by the business types that include the following: proprietorship, a limited liability company, HUF and partnership etc.
Following the launch of GST i.e. goods and services tax, Import export code is construed to be similar to that of the firm’s permanent account number. DGFT would grant the IEC code on an independent basis.
Registering the IEC Code for Small Business: Overview of Whole Process
In the year 2020, DGFT paved an easier way for registering the IEC code. It was made possible through the launch of the online platform facilitating such service. The online application is required to be filled by the applicant, and at the end of filing the application, it has to be authorized by the applicant with the help of a digital signature certificate (DSC) which in simpler words can be understood to mean E-sign.
Hence it is a necessary impediment that the DSC must be registered on the portal of the DGFT so that the online IEC registration process can be carried out smoothly and without any obstruction. Few steps needs to be followed for successfully registering the IEC number, given below are the steps in detail:
- First and foremost requirement is to visit the portal of DGFT which is available online. Then the next step is to select the option that calls for applying for the IEC.
- Your screen will pop up with the page displaying numerous vacant fields that are to be filled by the applicant. The fields would invite the filling up of the personal details that must be accurately filled.
- Once you are done with filling up the details, the next step includes clicking on the option to send OTP. The said OTP would be received on the registered mobile number or the e-mail id for due verification.
- You would receive the requisite user name and the related password on entering the OTP.
- The very next step involves logging in with the help of credentials that are provided to you.
- Further, select the option that talks about applying for fresh application.
- Next, the screen would pop up that invites the applicant to fill out the details pertaining to the details of the branch, and other address details of the firm
- Thereafter, the applicant is required to mention in detail about the partners and directors or the Karta.
- The section ahead, would be required to fill out the details pertaining to bank like account number etc. Also, make it a note to upload the Aadhar details and the PAN details.
- 10) Next in the row stands at filling out the operations sector that is preferred by the applicant.
- The declaration form must be duly consented by the applicant. After addressing this, select the save button and proceed further.
- Then, the very next step is to reach the bottom of the screen on the following page and duly select the “sign” tab.
- Following the previous step, a dialog box would pop up pertaining to digital signature, it would ask for certain details to be filled out with regards to list of provider, password etc.
- Once you are done with this procedure, a message would be displayed on the screen showcasing the confirmation message.
- As soon as you click on the “ok” button, you will be redirected to another window related to payment.
IEC Registration Process: Documents to be Uploaded
The following documents are required to be uploaded at the time of filing the application, few of them can be listed as below:
- Cancelled cheque in case the business is in the form of partnership
- In case of self-owned business, a copy of the sale deed must be attached together with the application.
- Copy of the lease agreement in the event the location of the business is within premises that is rented out.
- Specimen of the partnership deed wherein the business type is a partnership.
- Voter id and Aadhar details of the partners.
Use of Digital Signature Certificate
Digital signature certificate has been made a part and parcel of the IEC registration process. Only class two and class three tokens of DSC are supported by the DGFT.
IEC Registration: Related Benefits
There are numerous benefits that come along following the registration of the IEC number for a small business. Few of them are jotted down below:
- In the very first place, the benefit that surfaces as a result of the registration of the IEC number is that it significantly contributes towards expanding the business. In other words, the services offered by any business can be utilized at a global level.
- Secondly, the small businesses that have acquired the IEC number or code can make use of other benefits that come under the umbrella of the registration. To exemplify we can say the range of benefits including that of customs-related benefits.
- The major advantage of having the IEC number is that it does not need the returns to be filed. Once this code has been allotted, it makes things very easy since no further process has to be followed for maintaining its validity. Not only is this, but even in the case of export transactions, there no need for returns to be filed under the authority of DGFT.
- Yet another benefit that comes tagged with the IEC registration lies in the fact that it is rather easy to fetch and obtain. DGFT issues the IEC code within a period of ten to fifteen days subsequent to the filing of the application. Further, no import-export activity is required to be shown as a mark of proof.
- Once you get allotted with the IEC Code, be assured that you don't have to run here and there for the purpose of getting it renewed. It is valid for a lifetime.
Are there any Exemptions to Obtaining IEC Code?
As per the circular notified by the respective authority, it has come to light that it is not a mandatory requirement that all the traders must obtain the IEC number, which entails registration under the umbrella of the GST.
Read Our Service: Start Your Import - Export Code (IEC) Process
In reference to all such unique cases, the solution stands in knowing that for carrying out any import export trade, the PAN would be considered equivalent to the IEC code. In addition it is crucial to know that in case the goods are traded globally on the sole basis of personal purpose, then in that case the IEC code is not required.
In the nutshell we can come to a conclusion that in order for a small business to spread its wings out across the whole world, it is deemed utterly important that the business must first get hold of the Import Export code.
This IEC license would not only make things easier for the business owner but offer “n” number of benefits. The good news about the IEC license is that it can be obtained in a fairly simple manner when applied through the DGFT portal, which is a online platform to facilitate the whole process.
It is preferably recommended to obtain this license if you are looking forward to the growth of your small business. The IEC code is obtained within a period of fifteen days at maximum length.