In this article, we will discuss what is this certificate and who needs an import and export certificate. We will also delve into the benefits of IEC and who are exempted from registering under the EIC certificate.
Who Needs an Import and Export Certificate?
India’s foreign trading and exports and imports are governed by the Central Government under the leadership of DGFT. The way they keep a tab on the number of Companies and Individuals being associated with this take is by an Import and export certificate.
What is the concept of the Exports and Imports certificate?
To keep a track of all the Indian importers and exporters that are active in the trade and are registered with the government, they are awarded a numeric or an alphanumeric expression as an Identification mark. For most businesses and trades this IEC sometimes also referred to as EIC, is absolutely mandatory. This is like a permit, without which there would be a lot of problems in trade.
What are the basic requirements to procure an Exporter as well as an Importer certificate?
`The eligibility for the Importer as well as Exporter certificate is given to all businesses, with a few examples being Trustees, Partnerships, organisations of any size, big and small dealing with exports and imports of agricultural or trade based goods. For any of these cases PAN card details of the applying party, address and birth certificate documents of the applying party, a copy of a banker’s leaflet or a bounced/rejected/cancelled check with the name of their company on it. PAN card of the company can be required, but it is not mandatory.
Who needs the EIC?
The Directorate of Foreign Trade and Commerce had laid in iron the conditions which a trade or a business has to check off to be eligible to get the license to carry the imports and exports. There are conditions for who needs Import and Export Certificate and who does not.
The following conditions have to be abided by the corporations who need an import and export certificate.
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- Importing and exporting: The certificate is only awarded to those traders and businesses who carry out imports and exports. In other words, this condition has to be abided foremost.
- The Payments that are done in response to the export or the import: For the businesses that are in importing/exporting the payments are completed only upon showing the EIC. This has to be done if you are paying money or you are getting money.
- Necessary for customs: Customs checking is a huge part of the business. The goods are never cleared after the routine customs checking if there is no IEC code on the goods.
- For clearing shipments: International shipments are the last part of the transaction process and as crucial as any other. Here too, without a proper Importing-exporting code and certificate, the shipment delivery will not happen.
What are the factors that can get exemption a business for the E and I norms ?
Just like there are clear distinctions of who needs an import and export certificate there also stand some clear instructions about which businesses and people stand exempted from its rules. This list discusses briefly the exceptions:
- Any single individual dabbling in this business does not require the certificate
- Any goods that may be brought in or deported out of the country for personal purposes and not trade-related purposes are also out from E and I certificate norms.
- All the packages under the Central Government and Ministries that are subjected to Exporting or importing are exemptions from the rule as well.
- Any trading and exporting/importing of goods that do not fall in the sphere of trade or manufacturer or agriculture are also out.
- All trades are done in and around Nepal and around the Indo-Myanmar border by Indians who generate a revenue of no greater than 25,000. They also do not have to get EIC certificates.
- EIC exemptions are also present in the exportation of chemicals, equipment, certain organisms and certain materials. These together are called the SCOMET. They were exempted in accordance with their enlistment in the 2nd schedule of the 3rd Appendix of the ITC.
Why should I comply and get the E and I certificate?
This is a common query among a lot of business personnel in the domain of Exportation and Importation. Our column here will supply the readers with the main benefits of getting the certificate as an Indian trades person od this particular sphere:
- The illegal trading and the trade and transportation of banned substances can be controlled by getting an IE code and certificate. It basically marks you as honest trading personnel.
- By registering under the IEC you can take your business overseas and around the globe, there creating an expansion of income.
- It is almost a seamless process to get your own code, especially after the introduction of E-IEC. From payments to editing and getting the certificate, everything is available over the web and right at your home.
- Ease of importing and outsourcing process. With your IEC code on your products, you will have almost zero bumps in the process of customs and shipping.
- Benefits like extra promotion of customs and councils are sometimes offered by the Foreign Trade Department.
- Unlike GST, there are no multiple filings and no filing for returns. Before 2021, IEC was a lifetime membership almost, with once being procured it would need no updates. But after the 2021 amendments, it is mandatory to update and renew the EI certification: https://www.dgft.gov.in/CP/ of your company within the 30th of July. Failing to do so will eventually lead to cancellation or suspension of it.
Why choose Vakilsearch when you want to know who needs an import and export certificate?
As an owner of a booming company, keeping a track of this financial nitty-gritty can be hard. This is where Vakilsearch, India’s best online legal firm comes to play. Our dedicated experts will diligently help you through every process in this way. Not only will we keep you updated on the details of the IE certificate’s status, but we also will make it fast. It is a guarantee that with us you will have your certificate within 10 days. What is even a piece of better news is that our rates are extremely affordable with prices starting as low as ₹999. So, the next time you are stuck on the question of who needs an import and export certificate or how should I renew and update the certificate, reach out to us at Vakilsearch.
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