APPLICATION FOR IEC
For every first time exporter in India, it is necessary to get registered with the DGFT (Director General of Foreign Trade), Ministry of Commerce, and Government of India. DGFT provides the exporter a unique IEC (Importer-Exporter Code) Number that is a ten digits code required for the purpose of export as well as import. No exporter is allowed to export his good abroad without IEC number. However, if the goods are exported to Nepal, or to Myanmar through Indo-Myanmar boarder or to China through Gunji, Namgaya, Shipkila or Nathula ports then it is not necessary to obtain IEC number provided the CIF value of a single consignment does not exceed Indian amount of Rs. 25, 000 /-.
Application for IEC number can be submitted to the nearest regional authority of DGFT.
Application form which is known as "Aayaat Niryaat Form - ANF2A" can also be submitted online at the DGFT web-site. While submitting an application form for IEC number, an applicant is required to submit the following mandatory documents:
- PAN account number. Only one IEC is issued against a single PAN number.
- Current Bank Account number
- Bankers Certificate
- An amount of Rs 1000/- to be submitted as the application fee.
The other documents that must be available for obtaining the IE Code in the name of the business are:
- Name of the Company
- Certificate of Incorporation
- MoA & AoA of the Company
- Directors Identity Proof
- Directors Address Proof
- List of Directors
- Bank Reference Letter
REGISTRATION WITH INCOME TAX AUTHORITIES
Goods exported out of the country are eligible for exemption from both Value Added Tax and Central Sales Tax. So, to get the benefit of tax exemption it is important for an exporter to get registered with the Tax Authorities. To start an export business, the above registrations (Incorporation of a Company, Tax Registration- PAN & IEC) may be sufficient in most states. However, based on the state, further registration such as the shop & establishment factory license, ESI/PF registration etc. may also be required. Also, in case the business proposes to manufacture and export items like food products, approval from FSSAI may also be required.
REGISTRATION WITH EXPORT PROMOTION COUNCILS
Registered under the Indian Company Act, Export Promotion Councils or EPC is a non-profit organisation for the promotion of various goods exported from India in international market. At present there are eleven Export Promotion Councils under the administrative control of the Department of Commerce and nine export promotion councils related to textile sector under the administrative control of Ministry of Textiles. EPC works as a platform for interaction between the exporting community and the government. So, it becomes important for an exporter to obtain a registration cum membership certificate (RCMC) from the EPC. An application for registration has to be accompanied by a self-certified copy of the IEC number.
REGISTRATION WITH COMMODITY BOARDS
Commodity Board is registered agency designated by the Ministry of Commerce, Government of India for purposes of export-promotion and has offices in India and abroad. At present, there are five statutory Commodity Boards under the Department of Commerce. These Boards are responsible for production, development and export of tea, coffee, rubber, spices and tobacco.
An export license is issued by the Govt. of India after which the exporter is allowed to transport his product in a foreign market. The current Export Licensing policy of Govt. of India is contained in the new Import Export Policy and Procedures, 1997-2002. All goods may exported without any restriction except to the extent such exports are regulated by the ITC(HS) Classifications of Export and Import items or any other provisions of this policy or any other law for the time being in force. The DGFT may, however, specify through a Public Notice such terms and conditions according to which any goods, not included in the ITC (HS) Classifications of Export and Import items may be exported without a license. Such terms and conditions may include Minimum Export Price (MEP), registration with specified authorities, quantitative ceilings and compliance with other laws, rules, regulations.
Canalisation is an important feature of Export License under which certain goods can be imported only by designated agencies. For an example, an item like gold, in bulk, can be imported only by specified banks like SBI and some foreign banks or designated agencies. To determine whether a license is needed to export a particular commercial product or service, an exporter must first classify the item by identifying what is called ITC (HS) Classifications. Export license are only issued for the goods mentioned in the Schedule 2 of ITC (HS) Classifications of Export and Import items. An application for export of canalised items mentioned in ITC (HS) Classifications of Export and Import items may be made to the Director General of Foreign Trade. The Export Licensing Committee under the Chairmanship of Export Commissioner considers such applications on merits for issue of export licenses.
Export from India required special document depending upon the type of product and destination to be exported. Export Documents not only gives detail about the product and its destination port but are also used for the purpose of taxation and quality control inspection certification. India has taken a leap forward in improving ‘Ease of Doing Business’ by reducing the mandatory documents required for export of goods to three documents each. These include:
- Commercial Invoice cum Packing List: The commercial invoice that is used by the exporter, wherein the price and the mode of shipment details of the goods are mentioned as per trade term. The packing list consists of the details of the goods contained in each parcel / shipment
- Bill of Lading/Airway Bill: This will depict whether the products are shipped accordingly.
- Shipping Bill/ Bill of Export: Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, included ship's owner, seller, buyer and some other parties. For each one represents a kind of certificate document. The declaration ‘Foreign Exchange Control Form (SDF)’ has been incorporated in the ‘Shipping Bill’ in India.
In comparison, internationally, the mandatory documents listed by the World Bank in Doing Business Report 2015 separately include the Foreign Exchange Control Form (SDF), Terminal Handling Receipt and the Technical Standard Certificate.