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An import export code license is a legal authorization that allows companies to engage in international trade of goods and services across borders. It is typically issued by governmental bodies and allows the license holder to import or export specified products by complying with applicable regulations, taxes and duties associated with such trade transactions. The license facilitates cross-border commerce by legitimizing the entity’s trading activities under relevant laws.
An import export license is an essential legal document required by companies and traders engaged in international commerce and trade across national borders.
It is issued by governmental authorities to regulate and monitor the import and export of goods considered sensitive from an economic, security or environmental perspective. The license sets out the products, quantities and values a company can trade as well as outlining compliance requirements related to customs controls, taxes and trade quotas.
Obtaining an import export license enables legitimate cross-border trade while allowing officials to implement policy, protect domestic interests and collect duties where applicable.
The licensing system facilitates above-board international trade and ensures transparency for customs and enforcement agencies in time stamping documentation and performing necessary checks.
The key purpose of an import export license is granting official permissions to companies to engage in importing and exporting activities which have implications from trade, security and compliance standpoints. It provides accountable oversight for goods movement across national jurisdictions.
Here are some of the important terminologies related to import export codes in international trade:
A standardized numerical system to classify traded products developed by the World Customs Organization. It has over 5000 commodity groups.
Alphanumeric codes used in the US to identify dual-use items, technology and software subject to export controls.
A document sent from importer’s bank to exporter’s bank providing guarantee of payment upon presentation of specified documents.
A receipt given by the carrier for goods accepted for transportation. It is a document of title for shipped goods.
A trade term requiring the seller to deliver goods on board a vessel designated by the buyer.
An important international trade document attesting that goods in a particular export shipment have been wholly obtained, produced, manufactured or processed in a specific country.
Codes assigned to imported goods based on the Harmonized System for calculating duties and taxes.
A 10 digit code required for importing/exporting goods in India. Issued by Directorate General of Foreign Trade.
Identifying marks and symbols stamped on packages to help in timely identification and delivery.
An acknowledgment issued by a shipping company indicating receipt of goods for shipment.
Knowing these key terminologies associated with import and export codes or documentation helps trade professionals comply with regulations and seamlessly move goods globally.
Here are some of the key documents generally required to apply for an import export license:
Application Form: This is a unique 10-digit alphanumeric number issued by the Indian Income Tax Department
Identification Proof: This is a 12-digit unique identification number issued by the Government of India.
Business Registration: Depending on the applicant entity type, registration certificate for company/partnership firm/LLP.
Bank Account Proof: Statement showing existence of business account in a authorized bank.
Tax Registration: GST registration certificate and IEC code document for those having it.
Ownership Documents: Industrial license, factory license, shop & establishment certificate, deed of partnership etc.
Product List & Details: Description of the items planned to be imported or exported along with any catalogs, brochures etc.
Audited Financial Statements: Balance sheet, Profit/Loss statement for last 2-3 years showcasing required net worth eligibility.
Rent Agreement: Valid Rent or lease agreement showing office address proof. NOC from landlord also needs to be provided in some cases.
Application Fees Payment: Receipt of application fees payment (Bank draft or online transfer) as prescribed.
Additionally, recommendation letters, export performance records, importer-exporter code evidence, and authority letters may also be needed as supporting documents for certain license applications.
Import-Export Code (IEC):
Additional Charges:
Here’s a guide to the IEC registration process in India, incorporating visuals for clarity:
Here are the key parties who can apply for an import export license:
Importers and Exporters:
Trading companies directly involved in importing and exporting various goods and services can apply for an import export code license to legally conduct international trade.
Customs Brokers:
Customs brokerage firms that assist traders in meeting trade compliance, clearance formalities and transportation logistics can obtain licensing depending on the regulations.
Agents and Distributors:
Businesses that act as agents or distributors for international sales and commerce between a domestic manufacturer and foreign buyer would need licensing for undertaking these regulated activities.
Export Oriented Units:
Businesses qualifying as EOUs that primarily focus on manufacturing goods for export also need to submit applications to relevant government departments controlling the trade.
Limited Liability Partnerships & Private Limited Companies:
Business firms registered under these common corporate structures are eligible to apply if they aim to conduct cross border merchandise trade.
Commercial Banks:
Certain designated banks provide import-export code licensing facilities for capital goods and offer the possibility to withdraw money from the license as goods are imported and exported.
International Trading Houses:
Large global trading houses that buy, sell and distribute a broad variety of goods across multiple countries are mandated to have import-export code licensing.
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