Frequently Asked Questions:
Q 1: What is IEC?
Ans: IEC or Import & Export Code is a unique 10-digit alpha Numeric code issued by DGFT. Presently it will be the same as PAN number of individual/ organization.
Q 2: Who can get IEC?
Ans: Any individual or company who wants to enter the international business.
Q 3: What is the basic requirement to get IEC?
1.Valid registration of Firm
2.Valid registration of PAN
3.Valid Mobile number and Email id
4.Valid Bank Account in the personnel/ firm Name
5.Valid Digital signature (Class 2 or Class 3)
Q 4: Who Issues/ How to apply/ fee?
1.DGFT is the authority to issue IEC
2.Apply only through DGFT portal
3.Rs 500/- to be paid online.
Q 5: Is IEC required for Service exporter?
Ans: IEC is not mandatory for Service exporters except when they want to Claim benefits under Foreign Trade Policy.
Q 6: Who are the Regulatory bodies for international trade?
a.Director General of Foreign Trade (DGFT) – Under Ministry of commerce - Formulate foreign trade policy/ procedures
b.Central Board of Indirect Taxes & Customs (CBIC) – Under Ministry of Revenue – Monitors physical movement of goods and implements TRADE policy decisions.
c.RBI- Reserve Bank of India regulates Remittances for imports and monitors export realization.
Q 7: What are export promotion councils and their role in international trade?
Ans: Export promotion councils were set up by Ministry of commerce to assist and handhold manufacture exporter and Traders for particular commodity or Multiple commodities. They assist in providing Market information and also Marketing of products globally. There are product specific councils and Development Authorities.
Q 8: Is it mandatory for exporter to register with EPCs?
Ans: It is mandatory for exporters of Agriculture/ Dairy products/ food products to register with APEDA and Marine products to register with MPEDA and obtain necessary RCMC (Registration cum Membership Certificate). For the rest of the products it is not mandatory to register with EPCs. However, exporters will not be eligible to claim any incentives/ Benefits under FTP unless they have registered with EPCs.
Q 9: What are ITC (HS) codes?
Ans: Indian Trade Classification (Harmonized system) is a compilation of codes for all commodities for export/import and are classified into groups/ subgroups at 2/4/6/8 digits. This is also issued by DGFT.
Q 10: What are the mandatory documents required for Export/ Import?
1.Exports - Bill of lading/ Airway bill, commercial invoice cum packing list, Shipping Bill,
2.Imports - Bill of lading/ Airway bill, commercial invoice cum packing list, Bill of Entry.
Q 11: what are the other documents / additional documents may be required to be furnished?
1.Certificate of Origin
2.Certificate of Inspection
3.Phytosanitary certificate, Health certificate, Animal Quarantine Certificate, Drug license etc for specific commodities
4.Any other documents as agreed by buyer/seller.
Q 12: What are INCOTERMS?
Ans: Incoterms are international commercial terms that clearly defines the roles and responsibility of exporter/importer in a trade transaction. Presently INCOTERMS 2020 is in vogue and there are 11 types of incoterms under which trade responsibility is shared.
Q 13: Which are the most commonly used INCOTERMS in transaction?
a.EX - works - used for exclusive products where the exporter responsibility is pack it and hand over to Importer and all the responsibility will be with importer
b.FOB- Free on board - where exporter will pack/ move the goods to port/ custom clears and keep it on board.
c.CIF - Cost/ Insurance/ Freight- where the exporter bears the cost of freight and insures for voyage.
Q 14: What is Certificate of origin (Coo)?
Ans: It is a document to establish evidence of origin of goods from exporting country.
Q 15: How many types of Coos are there and who issues?
Ans: There are 2 types:
1.Non-preferential - Issued by EPCs/ chamber of commerce/ VTPC
2.Preferential - This is to avail preferential custom duties at importing countries agreed by bilateral trade agreements - issued by FIEO/ EIC/ DGFT.
Q 16: Which are commercial terms in international trade?
2.DP terms - payment against documents
3.DA terms - payment against acceptance
4.Letter of credit.
Q 17: What are common Risks in international trade and Mitigating agencies?
1.Credit (payment risk) - by insuring with ECGC
2.Currency risk - by adopting forward contract with AD bank
3.Carriage risk - by getting Marine insurance
4.Country risk (political stability) - by insuring with ECGC.
Q 18: What are the Common incentives offered by GOI for exports?
1.Duty drawback (customs duty paid on inputs for export production) – issued by Custom department directly to exporter account.
2.MEIS/ SEIS/ Ro DTEP/ - Incentives for a particular commodity/ service exports - issued by DGFT as scripts
3.Status Holders - who excel in exports year on year-preferential treatment in exports offered by Customs
4.TMA assistance - Transport and Marketing assistance- For transport of Agriculture commodities incentives offered- by DGFT.
5.Duty exemption/remission/EPCG- Issued by DGFT
Q 19: what are the incentives offered by Karnataka Government for exports under the industrial policy 2020-25?
1.100% Electricity tax exemption for new MSMEs whose exports are minimum 50% of their turnover, for a period of 5 years in Zone - 3
2.MSMEs who double their exports in subsequent years will be paid 1% of FOB value maximum Rs 10 lakhs per unit.
3.Reimbursement of Bank charges for obtaining EBRC - Maximum Rs 1 lakh/ unit
4.Reimbursement of ECGC charges for MSMEs – maximum 1 lakh/unit
5.Refund of certification charges incurred during obtaining statutory certification-Rs 1 lakh/unit
6.Refund of fees for acquiring individual certification from EXIM course offered by IIFT – New Delhi- Rs 25,000/ Maximum.
7.Market Development Assistance- To participate in Trade fair in south American countries - assistance up to Rs 1.75 lakhs and other countries -assistance up to Rs 1.50 lakhs.
8.Market Development assistance for MSEs and Artisans - Air/Train fare/ Stall Rent up to maximum Rs 25,000 / DA at Rs 1000/day for 10 days maximum.
Q 20: How to check Quality requirements required for different products in different countries (SPS/ TBT requirements)
(Kindly visit Karnataka Vanijya Mitra Portal, select Market Intelligence Report, select the product in the relevant column, select the product for export and click on the SPS column to get the quality requirements required for a particular country/ region.