Advantages and disadvantages of dgft IEC Code Online Application Procedure India

Advantages and disadvantages of dgft IEC Code Online Application Procedure India

Importer Exporter Code is a 10 digit unique number given to business entities for import into and export from India as a part of business transactions. It aimed at not only facilitating foreign trade but also at facilitating easy taxation. Chapter III of the Foreign Trade (Development and Regulation) Act, 1992 specifies the registration of this 10 digit unique code, which is issued by the Director General of Foreign Trade (DGFT). Without the dgft IE Code Online Application Procedure India a business entity cannot import or export goods and services. However, import or export of goods and services for personal use is allowed even without IEC.

The advantages of IEC Code Online Application India are as follows,

  1. Complete online registration – IEC registration has been made completely online. The Director General of Foreign Trade portal provides the facility for online registration of IEC. This method of registration has simplified the process of registration.
  2. Minimum documents required – Any business entity or an individual can apply for IEC with only 4 documents to be submitted for the registration and they are as follows,
    1. Copy of PAN card
    2. Copy of ID proof
    3. Passport size photo
    4. Cancelled cheque
  3. Permanent registration facility – There is no need to update or renew IEC from time to time. Once the registration of IEC is done, the Code remains with the holder forever.
  4. Exemptions and Subsides – IEC code helps the business entities to avail benefits in the form of exemptions and/or subsidiaries declared by the Customs, Export Promotion Council and other authorities.
  5. No specific tax compliances – NO specific compliances are to be followed by the IEC holders in cases of annual fillings or return filling.
  6. Global market reach – IEC will help the importers and exporters in exploiting the global opportunities, which will in-turn, help them in increasing their profits and efficiency and decreasing their costs.

IEC Code Online Application India comes along with a few drawbacks or disadvantages, they are as follows,

  1. Imbalance in imports and exports – At times IEC may create imbalance in the amount of imports and exports and most of times, imports being more than exports will drastically affect the economy of the country.
  2. Quality measures – IEC only gives the licence to import and export and also enjoy the benefits of subsidiary attached to it. However, there is no mechanism to check the quality of goods and services being supplied. If the quality of the goods and services exported is good then their lies no harm but if the quality of the goods of goods and services is bad then their lies a threat to the reputation of the country. Bad quality of imports may also result in loss to business entities.
  3. Loss to domestic manufactures – IEC has made the process of importing the goods easy. However, if the imports are such that they are taking away the market for the domestic goods and services, it will definitely pose a threat to the national income and per captia income of the country.
  4. Unemployment – As a consequence of import of low cost goods and services, may result in unemployment due to loss of market because of the imports. This will pose a threat to the local manufactures and inflation may be caused.

These are some of the advantages and disadvantages of the dgft IE Code Online Application Procedure India. India is moving rapidly towards Globalization since 1991. For India to be a developed country, it is necessary that we encourage both import and export in an effective manner. Leading firms like Company Vakil, are always equipped with the best persons to help the business entities and individuals in the IEC registration process.

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