An export company, like other businesses in India, is expected to undergo certain mandatory registrations and pursue certain licenses. Once the required registrations are done, the company can start taking orders for exporting.
In India, regardless of rain or shine, it is always time to dine. Indian cuisine is a place where diversity is instilled even in its delicacies, such that there is something for everyone’s taste. India’s is not just culture and tradition. It is more than that. The love for Indian food is now omnipotent and has spread across the world. Indian cuisine has a variety of dishes and varies across the states. Yet one staple item that cannot be missed in this list is rice. India is one of the dominant producers of rice and no wonder, it is the staple food for many in the country. Being a tropical plant, it flourishes conveniently in this hot and humid climate. With this enormous growth, it is only obvious that India would be the world’s largest rice exporter. Several other countries such as Iran, Saudi Arabia, Iraq, Kuwait, and the United Kingdom are major consumers of Indian rice varieties. Therefore, rice export from India is undeniably a lucrative business. Like any other business, this also demands certain prerequisites and specific protocols as per Indian laws.
Procedure Involved in Rice Export:
Exporting in general means conveying or supplying commodities or services from one nation to another. There are a few mandatory steps that have to be meticulously followed to carry out rice export from India.
1. Registration of Company:
Like any business, the export business also needs a legally approved business structure. This can be accomplished by registering the company. This is the first and foremost step to be pursued in the case of export business. The business can be registered as a sole proprietorship, partnership firm, trust, or LLP company. A unique name should be selected for the company, without a logo, and it is advised that the business owner gets it registered under the Trademarks Act, 1999. The company registration formalities could take about 2 weeks to be completed. After the registration is done a bank account should be commenced to carry out the financial transactions of the export company. A bank account is crucial for an export company to receive foreign remittances and to avail of overdraft facilities. Once the bank formalities are completed the PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) should also be obtained.
2. Trademark Registration:
Any business, let alone a company dealing with the exporting of rice, should register trademark / the name of the company under the Trademarks Act, 1999. The trade name of the company carries the goodwill and reputation of the company and hence must be protected dearly. Protecting the trademark would restrain the competitors from using the name of the company to sell their products fraudulently. Registering the trademark bestows the legal right of using the mark on the owner, thus enabling the business to become the sole owner of the respective brand. Although registering the trademark isn’t mandatory, it urged to do so to avoid the misuse of the brand name of the company.
3. IEC Number:
One of the most pivotal prerequisites of export business is obtaining the IEC (Import Export Code) Number. It is an indispensable registration procedure for businesses that deal with exporting rice and other types of goods. It is to be obtained by submitting the required documents and proofs to the DGFT (Directorate General of Foreign Trade). After the commencement of GST (Goods and Services Tax), the IEC number is the same as the PAN, however, it is issued individually by the DGFT based on an application in the portal.
The IEC can be obtained by submitting an application online and it is absolutely a hassle-free process. The business owner has to furnish the required documents such as the registration certificate of the company, address proof such as the sale deed , NOC (No Objection Certificate) from the owner, utility bills, Identity proof such as Aadhar card, passport etc.
4. AD Code(Authorised Dealer Code):
Like the IEC number, the AD code is yet another mandatory registration that should be done by an export company that exports not only rice but any other product as well. The AD Code registration is indispensable for customs clearance. The code ensures that the foreign remittance of customers is done legally. The custom clearance procedures mandate shipping bills to clear the products that are exported for which an AD code is required.
5. FSSAI (Food Safety and Standards Authority of India) Registration:
Businesses that deal with food and food products must acquire an FSSAI License registration. FSSAI is a statutory body that regulates the quality of food products and services in India. Since the export company is dealing with rice which is a food product, the company has to procure a FSSAI license. The license gives the business a huge credibility among the customers.
6. Procuring MSME (Ministry of Micro, Small, Medium Enterprises)/ Udyam Registration:
The MSME registration is not mandatory, but by getting it done, the company can avail of several benefits from the government and the banks. This includes getting access to interest free government loans, subsidies on patent and trademark registration and various other such emoluments.
7. ISO (International Organisation for Standardisation) Certification:
It is recommended that the export company intending to export rice, gets the ISO certification done. A company that possesses this certification is viewed with high credibility, as the products or services of the company are considered to be of high quality and to abide by international standards. The products of such companies carry rigorous quality management techniques. Further, ISO Certification for FSMS(Food Safety and Management System) ensures the quality, safety, and hygiene of the food product.
8. GST (Goods and Services Tax) Registration:
The GST is an indirect tax levied on the supply of goods and services based on the turnover of the company. Nevertheless, the law mandates all export and import companies to obtain the GST registration, regardless of the company’s turnover. Having a GST registration, can be beneficial for a rice export company in many ways such as being able to claim the GST Return Filing, being able to sell products online as online portals mandate a GST registration, being able to have tie-ups or business relations with multinational companies etc.
9. APEDA (Agricultural and Processed Food Products Export Development Authority) and FIEO (Federation of Indian Export Organisations) Registration:
The exporters reap several benefits by registering the company under APEDA and FIEO. While APEDA is concerned with agricultural products FIEO focusses on Indian Exporters in Foreign Marketplaces. APEDA registration helps the business owner to Avail Financial Schemes commenced by the Government. The registration ensures the participation of business owners Trade Fairs and Orientation and training Programmes conducted by APEDA for Export Promotion. The FIEO participation helps the business owner get a discount on all the national and international air tickets.4
10. Choosing the right country:
An able exporter must be an avid reader and a keen researcher and therefore should be able to find out the prospective countries that would import rice from India. Shortlisting the countries and understanding their import-export regulations would do a great favour to the company to prevent legal battles in the future.
Thus, this lucrative business has been successful here for decades. In addition to the above requisites, the business owner must be educated about the market and current export trends. A thorough scrutiny of the same has to be employed. It is also necessary to be registered with ECGC ( Export Credit Guarantee Corporation Limited) which ensures that the exporter gets the payment from the importing party.
Plainly, the process of starting an rice export company could be very cumbersome, making the owner run from pillar to post to acquire the above stated licenses or registrations. The best way to get this done is to hand over the process to the experts. At Vakilsearch, we understand your business priorities and would help you gather these endless lists of registrations and licenses for your export company. You could give us the mandatory documents, and the necessary proofs and sit back relaxed, while we would keep the ball rolling and set up your brand-new export company in no time!
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