In this era of ruthless clash, people want to advance their trade beyond the borderline of the domestic market. Still, trading globally globally isn’t just a piece of cake for everybody. Previous to going international, one needs to ensure that the multiple procedures and laws are in place and then get different registrations done along with licenses. IEC (Import Export Code) license is one of such essential when one’s deliberating about importing or exporting from India.
IEC ( i.e an Import Export Code) is needed by anybody who is considering to kick-start his/her import/export trade in the country. It is announced by the Director General of Foreign Trade (DGFT). IEC is simply a 10-digit code which has a continuance validity. Broadly, any importer merchant is not permitted to import goods without the Import Export Code and similarly, the exporter merchants cannot avail the advantages from DGFT for the export scheme, etc. without the IEC.
Enrollment under the GST (i.e. Goods and Service Tax) is the first and foremost step. Without an enrollment, an entity can neither gather tax from its clients nor claim any credit of tax paid by it.
GST enrollment is binding for taxable entities as per GST. In a number of states, companies with an annual accumulated turnout of more than INR 20 lakhs (Also INR 10 lakhs,in some states) would be needed to acquire GST enrollment. Along with this, the turnover criteria and other circumstances have also been specified by the GST Council. Nevertheless, all importers would be needed to compulsorily acquire GST enrollment, as GSTIN is now needed for clearing goods from Customs Department.
Once GST was implied on 1st July 2017, the procedure as well as documents needed for import of goods into India have altered. July 01, 2017 onwards, citing of GSTIN is made compulsory for filing a Bill of Entry as IGST is to be paid on imports so that input tax credit can be availed for IGST paid. Along with GSTIN, the need for PAN of the importer as well as IE Code for the importer would also continue.
For an IEC Code enrollment the following documents are required:
PVT. LTD. COMPANY/ ONE PERSON COMPANY/ PUBLIC LTD. COMPANY
IEC helps one in taking his/her services or product to the global market along with growing his/her trade.
The organisations can use several advantages of their imports/ exports from the DGFT, Export Promotion Council, Customs, etc., on the grounds of their IEC registration.
IEC doesn’t need the filing of any returns. Once it is allotted, there isn’t any need to pursue any kind of procedures for maintaining its effectiveness. Even in case of an export transaction, there isn’t any need for filing any returns with DGFT.
It is kind of simple to acquire an IEC code from the DGFT. It is granted within a time span of 10 to 15 days once the application is submitted. There isn’t any requirement to supply an evidence of any export or import in order to get an IEC code.
An IEC code is active for the lifetime of an enterprise and requires no renewal. Once it is acquired, it could be used by an entity against all its export and import transactions.
As per the latest guidelines circulated by the government, an IEC is not necessary for all traders who are enrolled under GST. In all such circumstances, the PAN of the trader shall be deduced as new IEC code for the purpose of import as well as export.
An Import Export Code (IEC) isn’t needed in a situation where the goods exported or imported are for the personal purposes and they aren’t utilized for any commercial purpose.
Any Export/ Import done by the various Departments of Government of India or Ministries, Notified Charitable institutions etc. need not require getting Import Export Code.
Even post exercise of GST, IE Code as well as PAN is needed for import. Import Export Code or IE Code is a certification under the Directorate General of Foreign Trade (DGFT) compulsorily required for import of goods into our country.
Under GST, input tax credit is supplied for the IGST as well as GST Compensation Cess paid on imports. But, the input tax credit cannot be used for Basic Customs Duty or other types of customs duty paid in the event of import.
The GSTIN as cited in the Bill of Entry is used to mark the flow of input tax credit from import to consumption. Thus, in order to use input tax credit, importers would have to compulsorily announce their GSTIN and file GSTR-2 showing details of inward supply.
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