Do we Need an Import-Export Code for Selling on Amazon? 

Last Updated at: Feb 03, 2021
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import-export code
On 31st August 2020, the Ministry of Commerce issued a notice regarding the procedure and criteria for exporters to apply for export licence for shipments of N95/FFP2 masks. According to this, online applications filed by such exporters only from September 7 to 9 will be considered for granting export licence by Directorate General of Foreign Trade (DGFT).

 

Owing to stringent lockdown conditions in almost every part of the world, global trade through online selling has expanded. This has created massive opportunities for companies engaged in the global sale via online shipping. The trend is further encouraged by increased costs of maintaining fixed spaces like outlets and compliance cost in different countries. In this post, we analyse the need for an import-export code for your business. We also trace its need for online selling via aggregators like Amazon. 

What is the purpose of an import-export code license in India?

An Import Export code is a ten-digit identification number helpful for international commercial shipments. It is issued by the Director-General of Foreign Trade, Department of Commerce, Government of India. It is compulsory to get an Import Export Code for carrying out both import and export transactions. 

Are you allowed to send shipments to another country without an import-export code?

Small quantities  

  • Yes, for small value, or small quantities, there is no need for an import-export code. This can be done via international shipping companies. 
  • It is ideal for small businesses that are still figuring out the market for their products.
  • You could also send small samples of your product. 
  • If you’re sending a non-frequent product, which isn’t ordinary for your business, you can do so without the IEC number 
  • Gifts of personal nature can also be sent without the requirement of IEC 
  • Shipping through national courier, registered post, India Post or Speed Post option does not require you to quote any IEC details 

However, when the quantity of shipments becomes larger, it may be uneconomical to send products via courier.  Moreover, in certain cases, penalties have been imposed on sellers for routinely shipping their products into India under the guise of “gift”. This miscategorisation of a sale transaction is likely to lead to legal consequences and action by the customs office.  

get import export code

What are the documents required for selling via Amazon?

Basic Business & Product Information

Tax Identification Number

Bank Account details – Current, Savings or Overdraft 

Pan Card

Address Proof

ID Proof

For Distributors or Resellers – 

  • Authorisation Letter on company letterhead
  • Invoice 

For Manufacturers – 

  • Declaration Letter on company letterhead

For Food Related Products

  • FSSAI license with Annexure (Including Product Category Details) with validity details 

Thus, Amazon by itself does not ask for your IEC number. However, shipping through the portal would nevertheless require you to quote the number. This would be required at the stage of shipping, courier, receipt and entry of the goods into the other countries.  

What are the various options available for shipping via Amazon?

If you choose to register yourself as a seller on Amazon, you have two options open to you 

  1. Fulfilling international orders on your own 
  2. Using Fulfilment by Amazon services 

Fulfilling international orders on your own

  • As a seller, you may choose to ship orders from India to another country all by yourself. This can be done by contracting with a delivery service portal that engages in international shipping. 
  • In such a case, you become liable for customs delays, additional duties and taxes on the products. 
  • To be safe, you may choose to have a contractual agreement with the shipping company for adhering to strict timelines of delivery 
  • You may also engage the services of an insurance company to help safeguard your business from the risk of transit losses. Your insurance may cover theft, accidental damage, loss of package etc 

Using Fulfilment by Amazon for International Orders 

  • In this route of fulfilling international orders, your products would import into the country where you intend to sell the products. These would then be stored in an Amazon fulfilment centre in that marketplace. 
  • As an exporter, you would need to import the goods into the destination country. You may also need to pay import taxes, customs duties and fees levied by the importing country.  
  • This is especially helpful for selling in the United States, European Union, Canada and Japan 
  • You may also use Amazon’s Multi-country inventory program. Under this, you can send your most selling products directly to countries where customers are buying these products. This reduces the time for fulfilment of orders. 

For starting to selling via Fulfilment on Amazon mode, you will need an import-export code for selling. Regardless of the more, your courier company would ask for an import-export code. Hence, it is advisable to get the code before proceeding to start 

How is Import Export Code different from Authorised Dealer Code?

The Foreign Trade Policy in India necessitates that an exporter or importer obtain an Import Export Code. While applying, you would need to furnish an Authorised Dealer Code. An exporter needs to obtain an authorised dealer code from their bank. This is a 14 digit code that is common for all customers of the same bank. It has to be from the bank where the exporter holds a current account. The dealer code is for all ports for the purpose of customs clearance. 

 

Do we Need an Import-Export Code for Selling on Amazon? 

136
On 31st August 2020, the Ministry of Commerce issued a notice regarding the procedure and criteria for exporters to apply for export licence for shipments of N95/FFP2 masks. According to this, online applications filed by such exporters only from September 7 to 9 will be considered for granting export licence by Directorate General of Foreign Trade (DGFT).

 

Owing to stringent lockdown conditions in almost every part of the world, global trade through online selling has expanded. This has created massive opportunities for companies engaged in the global sale via online shipping. The trend is further encouraged by increased costs of maintaining fixed spaces like outlets and compliance cost in different countries. In this post, we analyse the need for an import-export code for your business. We also trace its need for online selling via aggregators like Amazon. 

What is the purpose of an import-export code license in India?

An Import Export code is a ten-digit identification number helpful for international commercial shipments. It is issued by the Director-General of Foreign Trade, Department of Commerce, Government of India. It is compulsory to get an Import Export Code for carrying out both import and export transactions. 

Are you allowed to send shipments to another country without an import-export code?

Small quantities  

  • Yes, for small value, or small quantities, there is no need for an import-export code. This can be done via international shipping companies. 
  • It is ideal for small businesses that are still figuring out the market for their products.
  • You could also send small samples of your product. 
  • If you’re sending a non-frequent product, which isn’t ordinary for your business, you can do so without the IEC number 
  • Gifts of personal nature can also be sent without the requirement of IEC 
  • Shipping through national courier, registered post, India Post or Speed Post option does not require you to quote any IEC details 

However, when the quantity of shipments becomes larger, it may be uneconomical to send products via courier.  Moreover, in certain cases, penalties have been imposed on sellers for routinely shipping their products into India under the guise of “gift”. This miscategorisation of a sale transaction is likely to lead to legal consequences and action by the customs office.  

get import export code

What are the documents required for selling via Amazon?

Basic Business & Product Information

Tax Identification Number

Bank Account details – Current, Savings or Overdraft 

Pan Card

Address Proof

ID Proof

For Distributors or Resellers – 

  • Authorisation Letter on company letterhead
  • Invoice 

For Manufacturers – 

  • Declaration Letter on company letterhead

For Food Related Products

  • FSSAI license with Annexure (Including Product Category Details) with validity details 

Thus, Amazon by itself does not ask for your IEC number. However, shipping through the portal would nevertheless require you to quote the number. This would be required at the stage of shipping, courier, receipt and entry of the goods into the other countries.  

What are the various options available for shipping via Amazon?

If you choose to register yourself as a seller on Amazon, you have two options open to you 

  1. Fulfilling international orders on your own 
  2. Using Fulfilment by Amazon services 

Fulfilling international orders on your own

  • As a seller, you may choose to ship orders from India to another country all by yourself. This can be done by contracting with a delivery service portal that engages in international shipping. 
  • In such a case, you become liable for customs delays, additional duties and taxes on the products. 
  • To be safe, you may choose to have a contractual agreement with the shipping company for adhering to strict timelines of delivery 
  • You may also engage the services of an insurance company to help safeguard your business from the risk of transit losses. Your insurance may cover theft, accidental damage, loss of package etc 

Using Fulfilment by Amazon for International Orders 

  • In this route of fulfilling international orders, your products would import into the country where you intend to sell the products. These would then be stored in an Amazon fulfilment centre in that marketplace. 
  • As an exporter, you would need to import the goods into the destination country. You may also need to pay import taxes, customs duties and fees levied by the importing country.  
  • This is especially helpful for selling in the United States, European Union, Canada and Japan 
  • You may also use Amazon’s Multi-country inventory program. Under this, you can send your most selling products directly to countries where customers are buying these products. This reduces the time for fulfilment of orders. 

For starting to selling via Fulfilment on Amazon mode, you will need an import-export code for selling. Regardless of the more, your courier company would ask for an import-export code. Hence, it is advisable to get the code before proceeding to start 

How is Import Export Code different from Authorised Dealer Code?

The Foreign Trade Policy in India necessitates that an exporter or importer obtain an Import Export Code. While applying, you would need to furnish an Authorised Dealer Code. An exporter needs to obtain an authorised dealer code from their bank. This is a 14 digit code that is common for all customers of the same bank. It has to be from the bank where the exporter holds a current account. The dealer code is for all ports for the purpose of customs clearance. 

 


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