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All you need to know about Import Export Code Exemptions in India?

All you need to know about Import Export Code Exemptions in India?
Japsanjam Kaur Wadhera
| Updated: Jan 12, 2021 | Category: IEC

The Import Export Code (IEC) is required by every person who is engaged in the business of import export trading. The IEC code is issued by the Director General of Foreign Trade (DGFT) as required under the Foreign Trade Policy. Without obtaining the import export code, the import export activity cannot take place at all. IEC is a mandatory requirement to avail the benefits under the Service Export from India Scheme (SEIS) or Merchandise Export from India Scheme (MEIS). However, there is a certain list of categories of importers or exporters who are exempted from obtaining an IEC code. This article will provide with the information regarding all you need to know about Import Export Code Exemptions in India. 

The Import Export Code is a 10 digit unique number that has to be obtained by the importer or exporter. IEC registration plays a very important role for those who wish to expand their business globally. It unlocks the opportunity to reach to the global market to sell the products.

Import Export Code exemptions in India

The list of categories for Import Export Code exemptions in India are as follows:

  • The Importers who are covered by clause 3(1) [except sub- clauses (e) and (I)] and exporters covered by clause 3(2) [except sub- clauses (i) and (k)] of Foreign Trade (Exemption from application of Rules in cases) Order, 1993.
  • Ministries or departments of State or Central government.
  • Persons exporting or importing goods for personal use which are not connected with trade, agriculture or manufacture.
  • Persons exporting or importing goods to or from Nepal, Myanmar through Indo- Myanmar border areas and China (through Gunji, Namgaya Shipkila and Nathula ports), provided that the CIF value of a single consignment does not exceed Indian Rs. 25,000. In the case of Nathula port, the applicable value ceiling will be Rs. 100,000/-.

The Import Export Code exemptions shall not be applied for the export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix – 3, Schedule 2 of ITC (HS) except in the case of exports by category (ii) above.

Permanent IEC numbers for Non- commercial PSUs

The following permanent IEC numbers shall be used by the non- commercial PSUs and the categories of exporters and importers mentioned against them for the purpose of export import:

Sr. No.

Permanent Import Export Code Number

Categories of Importer/ Exporter

1

0100000011

All the ministries or department of the Central government and the agencies partially or wholly owned by them.

2

0100000029

All the ministries or departments of any State government and agencies partially or wholly owned by them.

3

0100000037

Counsellor officers, Diplomatic personnel in India and officials of UNO and its specialised agencies.

4

0100000045

Indians going abroad or returning from and claiming benefits under the Baggage Rules.

5

0100000053

Institutions, Hospitals or Persons exporting or importing goods for personal use which are not connected with the trade, agriculture or manufacture. 

6

0100000061

Persons exporting or Importing goods to or from Nepal.

7

0100000070

Persons exporting or Importing goods to or from Myanmar through Indo- Myanmar border areas.

8

0100000088

Ford Foundation.

9

0100000096

Importers importing goods for display or use in exhibitions or fairs or similar events under the provisions of ATA carnet. This IEC number can also be used by the importers importing for fairs or exhibitions as per Para 2.29 of HBPv1.

10

0100000100        

Director, National Blood Group Reference Laboratory, Bombay or their authorized offices.

11

0100000126

Charitable Institution, Registered NGOs or Individuals importing goods, which have been exempted from Customs duty under the notification issued by the Ministry of Finance for bonafide use by the victims affected by natural calamity.

12

0100000134

Persons exporting or importing permissible goods as notified from time to time, to or from China through Gunji, Namgaya Shipkila and Nathula ports, subject to value ceilings of single consignment as given in Para 2.8 (iv) above. 

13

0100000169

Non- commercial exports or imports by entities that have been authorized by the Reserve Bank of India.

Why importers and exporters other than those who are exempted, needs to obtain Import Export Code?

Other than the categories exempted to obtain IEC Code, in the following situations the import export code is required by the importers and exporters: –

  • It is mandatory to obtain IEC Code to clear the shipments from the customs by the custom authorities.
  • It is necessary to provide Import Export Code by the exporters to the banks to send funds via banks.
  • The exporters are required to provide Import Export Code to the Custom ports to clear the shipments.
  • The exporters are required to provide Import Export Code to the bank to receive the funds in foreign currency transferred to them via bank.

Validity of the IEC Code

Once the IEC Code is obtained; it is valid for a lifetime. There is no need to file for the renewal of the IEC Code registration. The IEC code is valid until the business exists or the registration is surrendered or revoked. The Exporter or Importer does not need to file for or follow any compliance requirement like annual filling.

Since, the validity of the IEC Code is for a lifetime, once it is obtained, it requires no additional compliance and all those businesses or firms who wish to expand their business globally must obtain IEC code, and for the firm once it is incorporated.

Conclusion

IEC code is mandatory code that is to be obtained by all the businesses engaged in the import export trade. Such Code is issued by the DGFT[1], but there are some categories defined by DGFT, which are exempted from obtaining the code. The Import Export Code Exemptions in India is provided to certain importers and exporters mentioned in the list, which is stated above in the article. Other than that, no person is allowed to engage in import export trade without obtaining the IEC Code.

Also, Read: Frequently Asked Questions (FAQs) about Import Export in India

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Japsanjam Kaur Wadhera

Japsanjam Kaur Wadhera is an Advocate and has completed her BA.LLB (Hons) and has experience of writing various research papers during her college time. Earlier she was working as an Associate Advocate in a reputed Law Firm. She has an extreme interest in writing legal content and her core area falls under legal enactments, tax and finance.

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