The IEC (Importer Exporter Code) is a ten-digit authentication number designated for individuals involved in import-export businesses in India. Its acquisition is mandatory, emphasising the importance of obtaining it promptly to avoid potential penalties. However, there exists some uncertainty among IEC holders regarding whether this licence is subject to periodic renewal. In this blog, we shall provide essential details about IEC Registration Renewal and surrender.
Understanding IEC Registration and Its Granting Authority
The Importer Exporter Code serves as a fundamental legal approval for exporters and importers in India. The primary authority responsible for granting IEC registration in India is the Directorate General of Foreign Trade.
IEC Registration Renewal
When talking about IEC Registration Renewal and surrender, currently, IEC Registration comes with lifetime validity, eliminating the need for periodic renewal, unlike other licences. Therefore, as of now, there is no provision for IEC registration renewal in the country for those in the import export business.
IEC registration Surrender
In certain situations, businesses may decide to cease operations due to various reasons such as loss or a change in business interests. In such cases, surrendering the IEC registration becomes essential to prevent any potential misuse. Reasons for surrendering IEC may include the closure of an EXIM unit, the winding up of a company, the business owner’s unwillingness to continue the business journey, and other relevant circumstances.
Considerations for IEC Registration Renewal and Surrender
It is crucial to recognise that the IEC is issued against an individual PAN or a company PAN. Consequently, business owners should refrain from surrendering their IEC registration if it has not yet been linked with the PAN. In such instances, they should opt for a new IEC registration instead.
This precautionary measure is essential as surrendering the IEC without linking it to the PAN may hinder the ability of the exporter or importer to re-apply for IEC registration using the same PAN in the future.
Documents Required for IEC Registration Renewal and Surrender
When applying for the IEC Registration Renewal and surrender, it is essential to have the following documents in order:
1. Documents Evidencing the Company’s Location:
Provide documentation confirming the physical location of the company.
2. Business Registration:
Include proof of the business registration, showcasing the legal establishment of the company.
3. PAN of IEC Holder:
Submit a copy of the Permanent Account Number of the IEC holder.
4. True Copy of IEC Registration:
Furnish a true copy of the Importer Exporter Code registration that is being surrendered.
5. Covering Letter Addressed to the Additional Director General of Foreign Trade:
Draft a covering letter explicitly addressing the Additional Director General of Foreign Trade. This letter should accompany the application and provide relevant details.
Once these formalities are met and the required documents are submitted, the Directorate General of Foreign Trade will share information regarding the surrender of IEC with authorities such as the Reserve Bank of India, Customs, and others. It’s crucial to ensure that all necessary paperwork is in order to facilitate a smooth surrender process.
Online Procedure for IEC Registration Renewal and Surrender
Applicants seeking to for IEC Registration Renewal and surrender can follow an updated online process through the DGFT portal. The process is outlined below:
Step 1: Visit the DGFT Portal
Go to the DGFT portal and log in. Select the “services” option from the main menu.
Step 2: Opt for ‘IEC Profile Management’
Under the “services” section, choose the ‘IEC Profile Management’ option from the drop-down menu.
Step 3: Select ‘Surrender of IEC’
Within the ‘IEC Profile Management’ section, locate and select the ‘Surrender of IEC’ option.
Step 4: Login or Create an Account
The portal will prompt the applicant to log in. Those without an account can create a new one by providing necessary details such as phone number and contact information.
Step 5: Select the Surrender Option Post Login
After logging in, review the submitted details, including company name and PAN. Once verified, click on the ‘surrender’ option to proceed.
Upon completion of these steps, the portal will guide applicants through the documentation upload process. Subsequently, the DGFT will initiate the vetting process and, upon approval, revoke the IEC licence accordingly.
Norms Regarding IEC Registration Renewal and Surrender in the Context of Dual Registration
The Directorate General of Foreign Trade strictly prohibits the issuance of two Importer Exporter Code registrations against a single Permanent Account Number. Violating this condition can result in substantial penalties for the defaulting entity. In instances of dual registration, the concerned entity is obligated to surrender one of the registrations to the authority promptly to avoid financial penalties. Compliance with this norm is essential to adhere to regulatory requirements and prevent legal consequences.
The surrender of Importer Exporter Code and the suspension of IEC registration are distinct processes with different implications, yet they share a connection in the context of compliance and authority actions.
Surrender of IEC
Surrendering an IEC is typically a voluntary action undertaken by the licence holder. This act involves the licencee willingly submitting the IEC registration to the Directorate General of Foreign Trade. It is commonly initiated when the owner decides to cease business activities for various reasons.
IEC Registration Suspension
On the other hand, IEC registration suspension is a measure taken by the authority, particularly the DGFT, in response to non-compliance issues. Grounds for suspension may include violations of Foreign Trade Policy guidelines, breaches of shipping norms, or engaging in illegal shipment practices. The authority provides the licencee an opportunity to present a defence before imposing penalties.
Post-Surrender or Suspension Consequences
Following either the surrender of IEC or the suspension of IEC registration, the affected entity is barred from participating in Import and Export activities. The absence of a valid licence prevents them from conducting shipping-related business. It’s important for businesses to understand the distinction between these actions and their respective consequences to ensure compliance with regulatory requirements.
Final Thoughts
Importer Exporter Code registration in India currently holds lifetime validity, obviating the need for periodic renewal. However, adherence to specific norms is crucial, such as ensuring linkage with the PAN before contemplating surrender to avoid complications. While surrendering IEC is a voluntary act initiated by the licence holder, registration renewal is not applicable. DGFT oversees these processes, imposing penalties for dual registrations and taking discretionary actions, including suspension, for non-compliance. Understanding these underlying norms for IEC Registration Renewal and surrender is imperative for businesses engaged in international trade to deal with regulatory requirements smoothly.
