What if I Import Something Without an IEC Code

Last Updated at: Dec 16, 2020
IEC Code

Are you a business person who is involved in the import and export business? Well, you must be aware that there are different types of paperwork and standards you need to meet to run your business seamlessly. Based on the type of business, you have to complete the due diligence. So, if you are in the import and export business, then one of the key aspects that you need to meet is the IEC code or the Import Export Code. This code is issued by the DGFT or the Director-General of Foreign Trade. They will have a closer look at all the documents and supporting proof like PAN card, address proof, electricity bills, and others.

Any individual who wishes to start an import and export business must have the IEC. This is a 10 digit number. The best part about the IEC code is that once you get this code, then you don’t need to renew it, and it also lets you avail of certain benefits provided by the government to the registered import and export company.

One would need the IEC under the following conditions

  1.     The importer needs it to clear the shipment from the customs
  2.     At the time of receiving money
  3.     The exporter needs the IEC to clear the shipment at the custom port
  4.     The exporter requires it to ship from the custom port
  5.     Lastly, the exporter would need the IEC when he receives the foreign currency

While IEC is mandatory for the importer and exporters, there is a certain case where IEC is not required. Let’s understand this:

As per the latest circular issued by the Government of India, IEC is not mandatory for those companies which are registered under GST. Their PAN is considered to be the new IEC code. Hence, for any import or export, you will be using your PAN card as your IEC code.

However, you must know that IEC is not required if you are importing and exporting goods for personal use and it is not for any commercial usage. Also, any import and export done by the Government of India Department and Ministries and Notified Charitable Institutions don’t need the IEC.

apply for Import Export code

So, as the question says if someone imports something without an IEC code. Further, it falls in the product categories mentioned above, then you don’t need to have the IEC code.

You would want to know why IEC not required by the companies registered under GST, let’s answer this ahead:

As per the trade circular by the Government of India, there are two types:

  1.     Registered under GST
  2.     Not registered under GST

Let’s dig a bit deeper

Registered under GST – If a company is registered under GST, then the GSTIN number is used for import and export. But, to maintain uniformity, the PAN card number is used as IEC and not the GSTIN number.

Not registered under GST – For those who are not registered under GST, the PAN works as the IEC code, for and all the new applicants who don’t need to register under GST, the application is made to DGFT, and then the PAN is authorized as IEC.

There are several benefits of IEC registration like it helps in expanding the business; it also helps in giving credibility to the business and also ensures a seamless flow of business operations. And most importantly, there is no need for renewing the IEC again and again.

If you are running an import-export business make sure that you go for IEC registration.