What is IEC (Import Export code)?

Our country is having huge fiscal deficit, and ministry of finance is always trying to control the same by limiting and balancing imports with exports called as balance of payments. Hence, these 2 things are very important from the economic point of view. Keeping track of the same government has implemented various tools and providing an identity code for all those involving in such transaction called as IEC code.

The first requirement before you start an import/ export business in India is to obtain an IEC. An IEC is necessary for import/export of goods. In case the import/export is of services or technology, IEC is required in only limited circumstances, when import/export is in ‘specified services’ or ‘specified technologies’, i.e. services or technologies in which international trade is restricted by the Government of India as they pertain to national security, such as dealing in nuclear weapons, automatic guns, etc.

IEC (importer Exporter Code) number is a 10 digit code number given to an exporter or importer by the regional office of the Director General of Foreign Trade (DGFT), Department of Commerce, Government of India

The following categories of importers or exporters are exempted from obtaining Importer - Exporter Code (IEC) number:

 1.    Importers covered by clause 3 (1) [except sub-clauses (e) and (l)] and exporters covered by clause 3(2) [except sub-clauses (i) and (k)] of the Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.

2. Ministries/Departments of the Central or State Government.

3.Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture.

4. Persons importing/exporting goods from/to Nepal provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

5. Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

However, the exemption from obtaining Importer-Exporter Code (IEC) number shall not be applicable for the export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix- 3, Schedule 2 of the ITC(HS) except in the case of exports by category(ii) above.

In simple words, each and every body engaged in import/export business needs to have IEC code (exept the ones in the exempted list).

However, IEC code is not necessary in importing/exporting small consignment (upto Rs 20,000) with very less frequency (say once in a month or two).

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