IMPORT EXPORT LICENSE REGISTRATION IN INDIA

IMPORT EXPORT BUSINESS LICENSE REGISTRATION

In India Foreign Trade (Development and Regulation) Act, 1992 regulatesimport-export businesses. The act gives the government powers to make rules and provisions that work for development and also regulates foreign trade. The provisions that regulate the current foreign trade are available under the Foreign Trade Policy 2021-2026.

The drastic changes in the economic policies in India and the improvement in ease of doing business have become a major game-changer for import-export business among youths in India. Since the e-commerce business took a rapid development in India the way business functions have also witnessed a rapid change. These changes have made it possible for even smaller businesses to reach out globally from the comfort of their homes and order goods and services across the globe.

Businesses that are traded across borders globally are also called import-export businesses. To perform the import-export business, a proper business setup and company registration, taxation registration is required. If the company or business comes with multiple partners it is advisable to have If it is a one-person endeavour, it is recommended to chose Proprietorship Registration.

The most important license required to start an import-export business in India is Import Export Code (IEC). This code is provided against the registered companies Personal Account Number (PAN). To obtain the license one has to file an application to the Joint Director General of Foreign Trade, Government of India. The importance of obtaining an IEC is similar to that of a PAN. The IEC comes with lifetime validity and it is needed at the time of clearing customs, sending shipments, and also for sending or receiving money from a foreign currency.

 

HOW TO OBTAIN IMPORT EXPORT CODE

 IEC is required for import-export firms when shipments are to be cleared at the customs and when funds are to be sent overseas. IEC for exports helps in when shipments are sent and money has to be transferred in their bank accounts. The Director-General IEC comes with a 10-digit code that has lifetime validity.

The government of India

Following are the procedures through which IEC can be obtained:

1. Filing an application form in the AayaatNiryaat form number 2A format.
2. Sending it to the concerned Regional office of the Director-General of Foreign Trade.
3. Address Proof.
4. Identity Proof.
5. PAN of the director of the Firm.
6. Certificate of Registration of the firm or proprietor in question.
7. A copy of the canceled cheque of the current bank account of the firm or proprietor.

 

 

PROCESS TO START AN IMPORT-EXPORT BUSINESS IN INDIA

 

IMPORT PROCEDURES

1. Import Export Code

To start importing from India every import firm or proprietor is required to obtain an Import Export Code from the Director-General of The Foreign Trade, Government of India. Only those goods will be allowed to import inside of the country that is in compliance with section 11 of the Customs Act, 1962. The items that are restricted or prohibited by the government will need to haveadditional permission from the Director-General of Foreign Trade, Government of India.

 

2. Obtaining Import Licenses

An import license is of two kinds, a General license and, a Specific license. Goods can be imported from any country under a general license. Under specific license only authorised country products can be imported.

To determine whether a license is needed to import a particular product or service, the import firm must classify the item through Indian Trading Clarification that is based on ITC classification. ITC classification is the chief method used in India to classify the trade items for import-export operations. The ITC-HS code is an eight-digit code issued by the Director-General of Foreign Trade. The code represents the category or class of the products that is used by the importer in following the government regulations for goods to be imported or exported.

 

3. Registration-cum-Membership-Certificate

After obtaining IEC for the import-export business in concern, RCMC is required. RCMC certificate is issued by the Exports Promotions Council. India has 26 Exports Promotions Council, the RCMC certificate can be obtained from any one of these council locations.

 

4. Custom Clearing Formalities

Once a license is procured by the concerned firm or proprietor, according to section 62 of the customs act, they are required to provide the import declaration in the prescribed Bill of Entry along with PAN-based Business Identification Number (BIN). A Bill of Entry contains all the important information regarding the nature of the goods, the exact quantityand value of goods.

No Bill of Entry is required if the products are cleared through Electronic Data Interchange (EDI) system.

If the Bill of Entry is without an EDI system, the firm or proprietor will have to submit the supporting documents that would include Certificate of Inspection, Certificate of Origin, Bill of Exchange, commercial invoice, etc.

 

EXPORT PROCEDURES

 

1. Business Setup

After procuring a business license for the Import-Export business it is important for the firm or the proprietor to establish a well-thought plan of action for the business. It is recommended to follow the following steps:

1. Products or services to be exported
2. Costing of Input costs
3. Working capital requirement
4. Long-term capital requirement
5. Customer study
6. Market study
7. Transportation and logistics

 

Just as in import procedure an IEC number is required issued by the Director-General of Foreign Trade. Once IEC is obtained the exporter is required to ensure that the products in concern to be exported are met with all the legal compliances under different trade laws in India. The exporter is also required to make a registration with the Indian Chamber of Commerce (ICC). ICC issues Non-preferential Certificates of Origin that certifies that the products to be exported in India are of Indian origin.

DOCUMENTS FOR IMPORT-EXPORT BUSINESS

1. Commercial documents which are exchanged between buyer and seller and seller and buyer simultaneously.
2. Documents that concern the custom authority, excise authority, andlicensing authorities.
3. Bill of Lading.
4. Airway Bill.
5. Commercial Invoice.
6. The List of packages.
7. Bill of Export. (For Exports)
8. Bill of Entry (For Imports)
9. GST return Forms.
10. GSTR refund form.
11. Exchange control Declaration.
12. Bank Realization Certificate.
13. Registration-Cum-Membership-Certificate.