The internet accessibility and globalization have opened tremendous export possibilities for Indian exporters. With the comfort of running a business and the world growing as an international village, each entrepreneur dreams of exporting their products or services. But there are definite rules for importing and exporting that must be followed.
To export from India, an exporter needs to provide different kinds of permits. The 3 permits business verification numbers and import-export codes, which are released by the DGFT, and the AD code are needed to be furnished.
In this post, we will be discussing this code’s importance in the Indian export business. Read further to find out:
What is an AD Code or Authorized Dealer Code?
It is a 14-digit code you can obtain from the bank with which you have created a current account to operate your import-export business. The code is printed on paper with the bank’s letterhead in a layout specified by the DGFT. A bank should handle or be an approved dealer of foreign exchange to provide an Authorized Dealer code. This is in sync with the intention behind the code, which is to ensure that foreign currency transactions in an exporter’s current account are from legal trade.
Exporters have to register their code with the port or airport from where they aim to ship their products globally. If the freight is to be delivered from an ICD or inland container depot, the code listing is needed for that facility, in addition to the port linked to it.
The registration includes lifelong validity. Furthermore, if an exporter delivers from more than a single port, even if in similar or in diverse states, they should register the code for all of these ports. In such a condition, the code for all of these ports will not be the same.
Reasons an Exporter Need an Authorized Dealer Code
An AD code is a must to the export procedure for the reasons given below:
- A shipping bill is one of the 3 necessary documents needed for export customs clearance. And, without registering for an Authorized Dealer ode, you cannot produce a shipping bill on Icegate.
- The code registration with customs assures that any government allowances you take advantage of – are sent straight to your current account.
Applying for an Authorized Dealer Code
The exporter needs to apply for an Authorized Dealer code by writing an application at his bank. Some banks may offer the facility of digital application, but that is only limited to particular banks.
The steps below are for getting the code from the bank in which the exporter runs a current account.
- Initially, open a current account in a bank that handles foreign exchange.
- Apply for the allocation of code to the bank in the format provided by them.
- Bank will move ahead with the application and provide the code in the format specified by the DGFT.
- After getting the code, list it with the ports from where products are to be exported. Put forward the required documents for registration at CHA or Customs House Agents.
Registering an AD Code with Customs
Previously, when the digital application system was not brought in, the exporter had to furnish physical documents to the CHAs. And then, customs officials used to process further. But now, exporters can register for Authorized Dealer code online from the ease of their homes.
Let us find out the registration procedure and the documents needed.
- The next step post getting the code from the bank is to get listed with the customs department. The procedure will be finished on Icegate.
The documents that will be needed by exporters to be uploaded are:
- The approval letter of the Authorized Dealer code that was released by the Bank.
- Exporter application on letterhead for code registration.
- PAN’s self-attested copy.
- Photocopy of GST registration.
- Photocopy of import-export code.
- Previous three financial years’ self-attested copy of IT returns.
- Past year’s copy of bank statement.
- If the exporter is a manufacturer, he would need to show the manufacturing license.
- Aadhar, passport, and voter id’s copy.
Can Exporters Modify the Registered Authorized Dealer Code?
Yes, exporters can make changes to the Authorized Dealer code. The Icegate or Indian Custom electronic gateway simplifies not only the proliferation of fresh Authorized Dealer code but also eases the modification of the current code.
An AD code is significant for the exporter. It is not just essential for obtaining shipping bills, but exporters can claim different government benefits like GTS refunds, duty shortcomings, refunds of import duty etc., straight to their current account. It assists the government in reviewing the sources of foreign exchange. Also, if you need more, you can follow Amazon Global Selling for the latest updates on Authorized Dealer codes, seller registration and exporting different products from India.