Import Export Code

How Does the IEC Code Gets Deactivated?

This blog today will discuss the deactivated IEC code, what causes it, some notices and some amendments from the side of the government and what can we do to save the deactivation.

How Does the IEC Code Gets Deactivated?

As per the guidelines of the Indian Government, the laws regarding the renewal and deactivation of all IE code certificates received a major amendment on 2021, 12th February. Under the newer guidelines, non-updated certificates will face suspension, deactivation and even cancellation of the Import/Export Certificate’s number.

What is meant by the term IEC? Why is it so essential in business?

For any Business concern dabbling in international trading and exportation and importation of services and articles, IEC or the Code of Import and Export, as set under DGFT is a crucial certificate. Under this IE certificate, the traders get a unique number called the IE code. This code is extremely important to carry out a hassle-free international business. The IEC is used in both cases to ensure a seamless shipment

  • Exporting indigenous articles outside the subcontinent
  • Importing amenities and articles into the Indian subcontinent from around the globe. 
  • Banks will enquire about IE code details when sending money out for business purposes
  • Banks will also ask for the code when any export fetches money from outside India. 

Under consistent updates, the certificate of the IE code lasts a lifetime. Furthermore, one does not require different codes or certificates for imports and exports, a single registration is sufficient. 

How to get registered and update the IE certificate and code? 

All work on this certificate is done on the official website of the Directorate General of Foreign Trade (that is, DGFT) at dgft.gov.in Registration in the first process. In this registration process, PAN card details of the shareholders of the business and the applicant along with their basic biodata are needed.

When it comes to updating the IE certificate one first register on the website given above and links their  IEC to this registration. Then, from there they can update and edit their documents and print them. The charge for one update is Rs 999. 

Get registered and update the IE certificate

Why does IEC get deactivated sometimes?

The sole reason your Imports-exports code can go into suspension and eventual cancelling are mainly due to the fact that business concerns are often forgetful or careless or simply ignorant at times when it comes to the yearly updates. There is sometimes a misconception that only businesses requiring some sort of the change in their certificate have to go for this update of the IE certificate. This is untrue for the post 12th February 2021 amendment everyone has to compulsorily do it. 

What was the notification regarding all the deactivated IEC codes from the government’s side?

 The following notices were published regarding the information pertaining to defaulters and the deactivated IEC codes. We will first note them down in order and then talk more in-depth about them.  

The three Trade notices are :

  • Notice 18/2021-22 which is dated September 20th, 2021
  • The notice dated 19th of November, 2021 is the trade notice number 25/2021- 2022
  • The Trade notice of 31/2021- 2022 carries the list of IEC defaulters and was published 14th of January, circa 2022

Now, these were the notifications from the side of the Foreign Trade Directorate (DGFT) regarding IE certificate codes that were going to be deactivated:

  • All the IECs that have not seen an update from the month of January of 2005 will be deactivated with due effect from October. According to the Ministry of Commerce, this is a step to accurately figure out the actual number of import and export salesman in the country.
  • According to the notifications of the DGFT, the Foreign Trade and Commerce directorate has mandated for all the IEC candidates to use the internet to update their Coes of IE. This must be done from April to June. It has also warned of scrapping any IEC that does not follow the rule.
  • When any IE certificate of code is awaiting the nod of the regional authorities at DGFTRA, they cannot become deactivated IEC codes as per the amendment. For any previously suspended Code, the businesses can file for a reactivation. 
  • When the updates are successful on the part of the Businesses, it makes the deactivated IEC codes become re-active and usable again. 

Such strong decisions were taken due to a huge number of defaulting IEC codes. There has also come a decision where in February of 2022, the IE codes whose updates were pending since July of 2022 were deactivated. Hence the gravity of the filing and updates of your code of Imports and Exports is plain and understandable. 

 Any company looking to gather more information about it can visit the official website of the Foreign Trade and Commerce directorate (DGFT) and know more. There is even a list published by the DGFT that holds the unique numerical and alphanumerical codes of the IE certificates of all the defaulters. 

Some more Amendments

Other than those previous amendments and rules meted out by the DGFT, a few more have also been put forth. The list below contains a few of those:

  • Any IEC can come under the scrutiny of the directory of Foreign Trade and the holders of the business are expected to comply and help the commercial body by reciprocating its requests within time.  
  • If the updates of any IEC is not carried out by 30th July of that financial year, it will automatically stand deactivated. 
  • All updates of IEC are to be mandatorily done online. This was following the renaming of the IE code as the e-IEC code. 

Hence it is crucial to keep an eye out for any further amendments and also finish updates. In updates must check and if needed edit their communication details, like mail and phone numbers. 

Some Common Questions 

  1. What is the IEC code? 

The IEC or the Imports –  exports code is almost like a PAN identification but for your business concern. It is a lengthy numeric or alphanumeric identification code. 

  1. When did the policies get amended?

The DGFT and the government updated their policies in 2021.

  1. Can I do the update process offline in any way?

The IEC updates and registrations are to be done completely online following the amendments.

Conclusion 

If you are an exports/imports business dealer and have been deeply confounded by these new rules and want some assistance in IEC updates, you can reach out to Vakilsearch. India’s Premiere online firm for all things financial and legal. 

Read More Articles:

0

Back to top button

Adblocker

Remove Adblocker Extension