How to start an export import firm in India .

             How to start an export import firm in India .

We hope, this article about setting up an Export Import business in India helps the traders to enlighten necessary procedures and formalities to start an International business in India.

Government of India  amends formalities and procedures to set up an Export / Import firm time to time. So, I write this article about setting up an Import / Export Firm, to let you know an apparent idea about subject. Those who need to start an export import organization can visit necessary departments to have a clear idea on this subject – How to set up an Export Import firm in India.

                                   Registration and documentation procedures in India

           Rental agreement / or own property

Once after forming a firm name, you need to have a rental agreement with the premise owner. This rental agreement may be required for various government authorities to register your address proof of firm. While drafting rental agreement, please make sure, you have paid necessary legal charges as stamp duty on your document.

You need to make sure all details furnished in the document are in order including the authorization and witnesses.

If the premise is your own and your firm is a proprietorship concern, you need not arrange any separate rental agreement, the sale agreement deed of said premise is treated as a proof of address. However, if the premise is your own and your firm is a partnership firm involved by other partners, you need enter in to a rental agreement with other partners.

  

                                                PAN - Parmanent Account Number

PAN is an income tax ID number issued by Income Tax Department. PAN means Permanent Account Number. You need to provide your required information with supporting documents with Income Tax Authorities  if necessary. Most of the business transactions are now linked with this 10 digit - alpha numerical - PAN number by government. Separate permanent account number for individual and firm is required to be registered with income tax department.

                              Is individual PAN number sufficient for firm name?

How to obtain a PAN number for Proprietor, Partnership or Private limited company

 This is a common question among business men who just entered in to the business. Whether a business man has to obtain a Permanent Account Number – PAN in his firm name, although he has already obtained PAN in his individual name from Income Tax Department.

Here, if you are a sole proprietor of your firm, your individual PAN number is sufficient, as there is/are no other partners on your firm. However, if the firm is a partnership a separate permanent account number – PAN in the name of firm is required to be obtained from Income Tax Department. While applying for the said common PAN number in the name of company, a copy of individual PAN number of each partner has to be mentioned in the application form.

If your firm is a private limited company or public limited company, you need to obtain a separate PAN number in the name of your firm other than your individual PAN number. While applying for the said common PAN number in the name of firm, a copy of individual PAN number of each director, has to be mentioned in the application form.   

In this article I have explained about the procedures and formalities to set up an export import company in India. Do you  wish to add more information to update this article about setting up an import export firm in India?  Share below your thoughts about starting an export import company in India.

                                                  CURRENT ACCOUNT opening.

 Open with a bank who got effective export import services who does not delay in crediting foreign exchange etc…. preferably with a bank with exclusive international business.

                             How to obtain an IEC number with DGFT with branch code

If you need to export or import from India, you need to obtain an Import export Code IEC from Director General of Foreign trade within the jurisdiction office of your firm situates. Without an IEC code, no movement of goods from/to the country to outside is allowed.

DGFT procedures to obtain an IEC number are too liberalized now days. As per the recent notification, the following documents are required to obtain an Import Export Code. However, you may cross check for further update with DGFT before applying for import export code.

1. Bank receipt / demand draft against application fee. This fee is INR 1000.00 while writing this article. You may re-clarify with DGFT before applying.
2. Application form in prescribed format issued by DGFT for issue of Import Export Code number. This application for is prescribed in Appendix 21B.2.
3. Please attest the application for IEC with you banker where in you have opened current account in the name of firm to operate export import activities.
4. Self attested copy of Permanent Account Number PAN issued by income tax authorities.

5. Two copies of passport size photographs of the applicant. You need to attest the said passport size photographs with your authorized bank.
6. If any partner or partners are non resident interest or holding in the firm or company exists with repatriation benefits, you need to attach a self certified copy of Reserve Bank of India approval on the same.

When can an IEC obtained after submitting documents.

Normally, if all documents are in order, Import Export Code is issued by DGFT within two working days. However, by taking in to consideration of transit time, you can expect to receive IE code through post office to your official address within 10 days after submitting documents subjected, all submitted documents for Import Export Code are in order.

                      AD code - Authorized Dealer Code - registration with customs.

Once you obtained IEC if you intend to do export or import, you need to register your IEC and Authorized dealer code details with the port through which you are exporting or importing. If you are going to export by sea, you need to register with sea port customs and if by air, with airport customs also. You can appoint a customs house agent to get the job done on behalf of you.

What are the formalities for AD code and IEC registration with customs: What CHA does with your documents for registration.

Along with the Authorized AD code letter received from your bank though which you are going to transact your foreign trade; you need to attach a copy of IEC with a covering letter on your letter to be applied with customs officials. The customs officials normally finish these formalities within an hour.

The registration has to be done within the jurisdiction where your factory is situated.

RCMC registration procedures

Many government agencies supports exporters in various levels to boost the export of the country and such agencies extends all supports including financial supports to exporters. In order to avail such benefits, an exporter need to register their product and obtain Registration Cum Membership Certificate from the respective agencies who deals under specific goods separately.

If you are a manufacturer of a particular product or products, you need to obtain a registration cum member ship certificate from respective authorities. The details has been mentioned in my another article called ‘How to obtain RCMC’.

Registration with sales tax office

Exporters are eligible to claim sales tax benefits against exports. So, once after completion of necessary IE code procedures, you need to register with Sales Tax authorities under your jurisdiction area where in you can obtain necessary guidelines to act as an exporter or importer.

I hope, I could you explain in detail about the major procedures and formalities to set up an export import firm in India. As stated earlier, these details are only for information purpose, as government of India revise the procedures and formalities to set up an Import Export firm time to time.

Before setting up of such export import firm in India, you may once again reconfirm the procedures and formalities with necessary government agencies. 

What are the benefits of Importer exporter code ?
Import Export Code number is the primary proof of a firm as an Exporter/Importer in India.   IEC number can be submitted with government authorities as a proof of exporter/importer to obtain various benefits on their exports / imports from DGFT, customs, Export Promotion Council etc.

Where to obtain an IEC ? 

IEC number is issued by Directory General of Foreign Trade at each regional offices where the exporter/importer situates.

How to apply for an Importer Exporter Code?
The necessary application for Import Export Code number can be downloaded from DGFT website and follow  procedures.

Can I   apply Import Export Code application by  online?
Yes, the application can be filed   for issue of new Importer Exporter code.

What are the documents needed for an Importer Exporter Code application ?

Document are listed below (Please reconfirm with the authorities, as these information can be changed amended time to time)

1.Bank Receipt / Demand Draft details evidencing payment of application fee of Rs. 1000/-. DD should be in favour  of Zonal JDGFT, New Delhi.

2. Certificate from the Banker of the applicant firm in the format given in Appendix 18 A (Part B).

3. Self-certified copy of Permanent Account Number (PAN) issued by Income Tax Authorities.

4. Two copies of passport size photographs of the applicant. Photograph on the bankers certificate should be attested by the banker of applicant.

5. Self-addressed envelope duly stamped for Rs.25/-  (Amount may differ time to time; you may get exact amount from issuing authority)

6. These documents may be kept securely in a file cover.