CBIC introduced changes in system w.r.t AD Code Registration in exports
INTRODUCTION:
For starting an Import and Export business in India, you must have two registrations as per Government regulations. One is IEC Registration, and another one is AD Code Registration. Without these two registrations, you can not start an import-export business in India. The AD Code is required for customs clearance of your Goods.
An AD( Authorised Dealer) Code is a 14-digit number issued. The purpose behind the AD Code is to ensure that foreign currency transactions in an exporter’s current account are from a legal channel or not.
AD Code registration is required for each port separately for custom clearance of export or Import of Goods.
Benefits of AD Code Registration:
There are multiple benefits of AD Code Registration which are listed below.
1. AD Code Registration will assist you in developing your business and reaching out to a broader market on a worldwide scale, allowing your company to flourish at a rapid pace.
2. Registering an AD Code is the one-time process. It means you won’t have to submit any returns. Once the code is assigned to you, you will not be required to complete any more steps or return filing.
3. An AD Code is valid for as long as the entity survives. In other words, the AD Code has life-long validity. As a result, if you register for AD Code, you will never have to worry about renewing it.
4. Based on their AD Code registration, the companies may receive various incentives for their imports/exports from the DGFT, Export Promotion Council, Customs, and several other Government schemes.
Why is AD Code Registration Required?
AD Code Registration is a must for many reasons in carrying out export business. The significant reasons are as follows:-
1. Exporters who want to export goods from India must register the AD Code.
2. A Shipping Bill is one of three documents that must be submitted for export customs clearance. Without an AD Code registration, you cannot produce a Shipping Bill on Icegate, Indian Customs’ electronic data exchange platform.
3. AD Code Registration allows you to transfer credit to the trader’s current account directly.
4. Any Government advantages you want to avail of, for example, duty rebates and exemptions, GST (Goods and Services Tax) refunds, and so on, are credited straight to your current account if you have an AD Code registered with customs.
5. Registering or submitting the AD code in each & every port from where you want to export shipment is a mandatory requirement.
6. When exporting goods, exporters must provide the IE Code as well as the AD Code.
7. Furthermore, while receiving money from Abroad, Banks can demand the AD code of the business/individual
There was a demand from trade that an AD code should required to be registered only once in Customs System for filing documents across all the customs locations. To facilitate trade, the following changes have been made in the System in respect of AD Code registration. The erstwhile process and the changes introduced are as below :
Erstwhile Process – AD Code with associated bank account registration in System was a one time process for an IEC for filing of document (i.e. Shipping Bill) at any Customs EDI port. An AD Code was required to be registered at every port where documents were filed. There could be multiple AD codes associated with an IEC at various ports.
The registration request could be made online either through ICEGATE ID or at the Customs House. The same was to be approved by an officer at every individual port, where the IEC sought the registration of the AD code.
Recent Changes – AD code with associated bank account will now required to be registered in the System at only one port, and thereafter, the AD code would be available at all Customs locations. For any new AD code registration (or updation) at any port, the same has to be registered through online request at ICEGATE. The option to Add/modify the AD code and account against an IEC has been disabled in ICES under “CLK” role.
As in the existing procedure, the request would be approved by the officer under the CLK role at that particular port. Once an AD code is registered against an IEC at any port, the same can be used for all ports.
There is no requirement of separate registration at other ports for filing documents. Further, any change/amendment in the particular AD code account details will have to be done at that port of registration only i.e. the port chosen by the IEC at the time of making application for registration. Further there can be multiple AD codes and associated accounts registered against an IEC. No changes have been made in this regard.
As explained above, all multiple AD codes will have to be registered in the System at any one of the ports as explained above. Thus for an IEC, there can be different ports of registration for different AD codes.
Further for existing AD code(s) and associated accounts registered for an IEC, the Customs port, where the last Shipping Bill with a particular AD code was filed, has been taken as the port of registration for that AD code in the System. The details of port of registration for each registered AD code against an IEC would be available on the ICEGATE login ID under Bank Account Management Option. As explained above, any change/amendment in the particular AD code account details will have to be done at that port only.
