Introduction
Any legal entity that is engaged in an import-export activity or the service/technology provider takes advantage of the Foreign Trade Policy (FTP) at that time it is mandatory to acquire an Importer Exporter Code (IEC).
The type of company that applies for an IEC might be “Partnership, Proprietorship, (LLP) Limited Liability Partnership, Limited Company, HUF, Trust, and Society.” The IEC number is the same as the firm’s Permanent Account Number (PAN) as a result of the adoption of GST (Goods and Service Tax). The IEC would be issued separately by the Directorate General of Foreign Trade (DGFT).
What is IEC Code?
IEC Code stands for Importer Exporter Code and is a 10-digit code issued by the DGFT (Directorate General of Foreign Trade), Ministry of Commerce, Government of India. It is a code that is necessary for undertaking any import and export activity in India. It is necessary for businesses to have an IEC Code to carry out any overseas trade or to be involved in foreign trade operations.
Importer Exporter Code Deactivation by DGFT
All IEC holders are now legally required to update and validate their IEC Details, even if there are no changes, from April to June once every year through the Online system, failing which their IEC shall be de-activated and no import or export activity will be possible.
IEC-related provisions in Chapter-1 and Chapter-2 of Foreign Trade Policy, 2015-2020 are amended/deleted, and new provisions are inserted. It is provided that An IEC holder has to ensure that details in its IEC are updated electronically every year, during the April-June period. In cases where there are no changes in IEC details same also needs to be confirmed online. An IEC shall be de-activated, if it is not updated within the prescribed time. IEC so de-activated may be activated, on its successful updation. This would however be without prejudice to any other action taken for violation of any other provisions of the FTP. The application process for IEC and updation in IEC is completely online and IEC can be generated by the applicant as per the procedure detailed in the Handbook of Procedure.
Are you an exporter or importer in India? If yes, then you must be aware of the Import Export Code (IEC) issued by the Directorate General of Foreign Trade (DGFT). It is a unique 10-digit code, mandatory for any company or individual involved in international trade.
Every year, the DGFT requires all IEC holders to re-validate their details on its portal between the 1st of April and the 30th of June. This process is known as Update Your IEC Yearly. If you fail to do so, your IEC will be deactivated and you won’t be able to conduct any international trade.
The process of re-validating your IEC details is quite simple and can be completed in just a few minutes. All you need to do is visit the DGFT portal and log in using your credentials. You will then be asked to enter your IEC details and click on the ‘Submit’ button. That’s it! Your IEC will be re-validated and you can continue with your international trade.
We strongly suggest that you update your IEC details annually to avoid any inconvenience. Failing to do so can result in the deactivation of your IEC, which will make it difficult for you to conduct any international trade. So, make sure that you re-validate your IEC details between the 1st of April and the 30th of June every year.
New Importer-Exporter Code (IEC) Amendments
As stipulated in the Policy, the Importer Exporter Code (IEC) is required for export/import from/to India.
Importer Exporter Codes are issued by the DGFT, and an application for issuance of an e-IEC ( Electronic Import-Export Code) can be made promptly on the DGFT official Notification.
In addition, the application process for IEC and IEC upgrades is online, and IEC can be generated by the applicant following the procedures for upgrading IEC through the E-IEC portal.
Changes to IEC have been made by the Director General of Foreign Trade (DGFT)
To avoid IEC Deactivation, all existing IEC holders should satisfy the following mandatory compliances
Prompt Between April and June of each year, an electronic update of changes in the information provided for getting an IEC Code is performed.
Even if the information provided has not changed, the IEC holder must confirm electronically between April and June of each year to prevent of being deactivated.
To avoid the deactivation of an IEC, the reaction to hazards indicated in the DGFT portal against it must be handled by the IEC holders within a certain time frame.
After updating information or receiving a response to a query through the DGFT Portal, the deactivated IEC can be revived.
Points to remember at the time of Modifying IEC on the DGFT Portal
- A valid user ID credential should be there on the DGFT portal.
- Valid and Active Importer Exporter Code (IEC) in your user profile is a must.
- At the time of making payment for the Modification of IEC, a valid active company bank account is required.
- Active Aadhar for Members or proprietors of the firms or an active DSC is needed.
The process to Update or Modify IEC (Importer Exporter Code)
- Go to the DGFT portal and click on update IEC.
- Login to the Import-Export Code dashboard on the DGFT platform.
- For updating your existing IEC, Link your IEC through Aadhar verification or Digital signature on the DGFT dashboard.
- Select the update/modify IEC option.
- Once the above step is completed a form related to basic details and other information will be generated.
- Fill in all the information and submit the application.
- After a successful update, the IEC will be reactivated and the revised status will be submitted to the Customs system.
Conclusion
If an IEC is not updated within the specified time, it will be deactivated. On successful up-gradation, an IEC that has been deactivated can be re-activated. This would be in addition to any additional actions taken for violations of the FTP’s (Foreign Trade Policies) other requirements.