The Importer/Exporter Code: The Key to Successful International Trade

The Importer/Exporter Code: The Key to Successful International Trade

In today’s global economy, international trade has become a vital component of many businesses. Whether you are an importer or an exporter, you need to be familiar with the unique codes that are used to identify your business and the goods you are trading. In this article, we will explore the importer/exporter code, also known as the IEC, and why it is important for businesses engaged in international trade.

 

Importer/Exporter Code: What Is It?

 

(DGFT) of India issues Importer/Exporter Codes (IEC), which are 10-digit codes. Businesses involved in international trade use this special identification number to let customs officials and other government organizations know who they are. All companies in Import or export business activities from India must have an IEC.

 

The IEC is a one-time registration, and once a business is registered, it is valid for all future imports and exports. The registration process is straightforward and can be done online through the DGFT’s website. Businesses are required to provide basic information about themselves, such as their legal name, address, and contact details, as well as information about their business activities.

 

The Importer/Exporter Code: Why Is It Important?

 

IEC certification is a crucial prerequisite for companies involved in international trade. Banks and other monetary institutions use it to handle foreign payments, while customs authorities use it to monitor the flow of commodities within and outside of the country. Businesses are unable to import or export products from India without an IEC.

The IEC is also essential for businesses that wish to take advantage of various government schemes and incentives. For example, businesses that are registered under the Export Promotion Capital Goods (EPCG) scheme are required to have a valid IEC.

 

How to Get an Importer/Exporter Code?

To obtain an IEC, businesses need to apply to the DGFT. The application can be submitted online, and the process is relatively simple. Businesses are required to provide basic information about themselves, such as their legal name, address, and contact details. Once the application is submitted, the DGFT will verify the information provided and issue the IEC within a few days.

 

Am I eligible to have IEC without having any GST number?

Yes, IEC can be applied even without a GST number.

 

Can a person obtain an IEC code?

Who may obtain IEC? An IEC can be obtained by a person or a firm that wants to conduct international business. Individuals may use either their or business names to apply for IEC.

 

Conclusion:

For enterprises involved in international trade, it is a prerequisite to have this code. To monitor the movement of commodities within and outside of the country, customs officials and other governmental organizations utilize this special identifying number. All companies that ship or import goods from India must have an IEC; otherwise, they cannot conduct international commerce. You must secure a valid IEC to ensure efficient and trouble-free operations if you are involved in foreign trade.

Understanding the Difference Between NRI and PIO: Key Features and Benefits

Understanding the Difference Between NRI and PIO: Key Features and Benefits

As India continues to grow and develop, more and more people are exploring opportunities to live, work, and invest in the country. However, with different types of visas, residency statuses, and investment options available, it can be challenging to navigate the system and figure out what works best for you. Two common categories that are often confused are Non-Resident Indian (NRI) and Person of Indian Origin (PIO). In this blog post, we’ll clearly understand the differences between NRI and PIO, including the key features and benefits of each.

NRI vs. PIO: Key Features

Non-Resident Indian (NRI)

An NRI is an individual who holds an Indian passport but lives outside of India. This can be due to various reasons, including work, education, or personal choice. To be considered an NRI, an individual must have spent fewer than 182 days in India in a financial year or 365 days in the four years before the financial year. NRIs can invest in Indian markets, but their investments are subject to certain restrictions and may be subject to taxes on their Indian income. Additionally, NRIs are not eligible to vote in Indian elections.

Person of Indian Origin (PIO)

A PIO is an individual who is not a citizen of India but can prove their Indian origin through birth, marriage, or descent. PIOs are typically foreign nationals with at least one Indian parent or grandparent. PIOs are eligible to apply for a PIO Card, which allows them to enter and exit India without a visa for up to 15 years. PIOs can also open a Non-Resident External (NRE) account, which allows them to hold and transfer their income earned outside India in Indian currency. Additionally, PIOs can invest in Indian markets without restrictions and are eligible to vote in Indian elections.

NRI vs. PIO: Key Benefits

Non-Resident Indian (NRI)

  • Access to Indian markets: NRIs can invest in the Indian stock market, mutual funds, and other investment vehicles. However, their investments are subject to certain restrictions and may be subject to taxes on their Indian income.
  • Taxation: NRIs are taxed differently than Indian residents. For example, they are not taxed on foreign income, but they may be taxed on income earned in India.
  • Banking: NRIs can open an NRE account, which allows them to hold and transfer foreign currency into India. They can also open a Non-Resident Ordinary (NRO) account, which allows them to hold income earned in India in Indian currency.
  • Repatriation: NRIs can repatriate their income earned in India to their country of residence, subject to certain conditions.

 

Person of Indian Origin (PIO)

  • Visa-free travel: PIOs are eligible for a PIO Card, which allows them to enter and exit India without a visa for up to 15 years.
  • Investment: PIOs can invest in Indian markets without restrictions.
  • Banking: PIOs can open an NRE account, which allows them to hold and transfer their income earned outside India in Indian currency.
  • Voting rights: PIOs are eligible to vote in Indian elections.
Tax collected at source (TCS) on remitting money abroad under liberalized remittance scheme (LRS)

Tax collected at source (TCS) on remitting money abroad under liberalized remittance scheme (LRS)

Tax collected at source (TCS) on remitting money abroad under liberalized remittance scheme (LRS)

What is TCS? – Tax Collection at source is the excess amount collected in the form of tax by seller of goods from the buyer at the time of selling of goods over and above the sale price. Collected Tax then remitted to the government.

Is TCS applicable on foreign remittance? – Yes, as per section 206C(IG) of Income Tax Act, 5% TCS is applicable on sending money out of India for more than Rs.7 lakhs in a financial year under Liberalised Remittance Scheme of RBI. In absence of Aadhaar or PAN while remitting money abroad, 10% TCS is charged by authorized dealers. This rule has been affected from Oct 1, 2020.

Different overseas transactions eligible for TCS? – All permitted current & capital account transactions for individuals under LRS will attract TCS of 5% if the remittance amount is equal to or more than 7 lac rupees. All such remittances on which TCS is applicable are detailed below:

  1. Current Account Remittances:
  • Money sent for overseas education
  • Money sent for Gifts & Donations
  • Money sent for medical treatment abroad
  • Money sent for family maintenance
  • Money loaded & reloaded in travel card (Forex Card)

 

  1. Capital Account Remittances:
  • Loan to relatives
  • Investment in overseas shares & mutual funds
  • Investment in properties abroad

Please note that TCS at only 0.50% will be applicable for money sent for education purpose out of education loan taken from any financial institute. For example, if money remitted is Rs. 10 lacs out of education loan taken from bank, then TCS will be applicable at 0.50% on Rs. 3 lacs (Up to Rs. 7 Lacs TCS is not applicable) which comes to Rs. 1500/-. 

Please also note that a limit of Rs. 7 lacs is for entire financial year. For example a person send CAD 10000 (Rs. 6 Lacs at conversion rate of Rs. 60 per CAD) from India to his son living in Canada on 05.04.2023 and send CAD 10000 (Rs. 6 Lacs at conversion rate of Rs. 60 per CAD) again on 10.10.2023 in the same financial year, then a TCS of 5% will be applicable on Rs. 5 Lacs (Total money sent Rs. 12 lacs, free limit Rs. 7 lacs, Taxed amount Rs.5 lacs.) which comes to Rs. 25000/-

Is TCS applicable for import & export of goods & services? – No, TCS is not applicable for import & export of goods & services. TCS is also not applicable for overseas direct investment in joint ventures & wholly owned subsidiaries by private limited companies, limited companies, LLPs & registered partnership firms.

Is TCS also applicable on overseas tour packages? – Yes, TCS at 5% is applicable on overseas tour packages and there is no free limit of Rs. 7 lacs. Any tour & travel operator should collect TCS at 5% from the buyer of the overseas tour package regardless of the amount of the package.

Can I claim refund of TCS? – Yes, the amount paid by buyer of foreign exchange by way of TCS will reflect in his 26AS statement after the seller filed his TCS Return. Buyer can claim the refund while filing income tax return in case buyer has not any tax liability. Thus TCS amount will be refunded after filing of Income Tax Return.

Latest changes in TCS slab announced by hon’ble finance minister Nirmala Sitharaman in union budget 2023-24 on 1st Feb, 2023. Please not that all the changes mentioned below will become effective from 1St July,2023.

  • 20% TCS will be applicable for all overseas remittances except for the purpose of education & medical expenditure that too without any threshold limit of 7 lacs.
  • Remittances under liberalized remittance scheme for the purpose of family maintenance and GIFT, Investment in shares, properties & mutual funds will attract a flat TCS rate of 20% irrespective of amount of transaction.
  • Remittances for the purpose of overseas education & medical treatment is kept same as previous with only 5% TCS over 7 lacs of transaction amount.
  • Overseas tour packages will now become costlier as TCS limit has been increased to 20% irrespective of amount from 5% earlier.

           Let us understand this with the help of table given below:

Existing TCS Rate
Flywire payments from India made convenient | Everything Indian students need to know

Flywire payments from India made convenient | Everything Indian students need to know

These days, many Institutions worldwide are accepting payments through FLYWIRE and have made It compulsory.

Flywire is headquartered in Boston, Massachusetts, United States and is a payments enablement and software firm with the purpose to execute the most significant and difficult payments in the world.

Flywire assists to make it easier for consumers to pay, regardless of where they are in the globe and assists clients in being paid.

Flywire has removed the boundaries using adaptable solutions providing frictionless transaction experiences, which has made it possible to conduct international payments and receivables. for individuals to manage the worldwide world of today without allowing boundaries to define how they make payments

They have strived to strengthen client connections over the previous decade create cutting-edge technology, became market leaders, and nurture a distinctively rational business culture oriented on customer relationship management.

 

In this section, all the top queries related to FLYWIRE:

  • How do you make a payment to an institution using FLYWIRE?
  • How to send money from India through flywire?
  • Why Universities has adopted Flywire?
  • What if Flywire is unavailable at the university you’re interested in?
  • How to get assistance in India for generating payment instructions and making the payment?
  • Is flywire cheaper than a bank transfer?

 

  • How do you make a payment to an institution using FLYWIRE?

 

Step 1: At pay.flywire.com select your institution name.

*If you don’t see the name of your institution just click on the payment link given by your institution.

Step 2: Select the Country(Your bank account is located) you are making a payment from and enter the amount.

Step 3: Now select the Payment Method (Each payment mode displays the amount to be paid).

*Each Payment mode differs from one, some of them may require additional documents.

Step 4: Add all details necessary related to the payer.

*If you are using the link given by your Institution some of the details may be pre-populated.

Step 5: Lastly, fill out the information required by your institution.

 

 

Once you review and confirm your payment information, you will be provided with the instructions to complete your payment, you need to transfer funds to Flywire to complete your Payment via either of the following:

  • Online banking/  Mobile Banking
  • Telephone Transfer 
  • In Person Visit to the Bank Branch

 

*If you are choosing to pay Via bank transfer you will need to initiate your payment directly with your bank using the account details provided in the payment instructions.

*If you are choosing to pay Via an online payment method, you will be redirected to the secure site of the payment partner, after entering the required information you will be redirected to Flywire’s website.

You can always check your status in the “Track Your Payment” option mentioned in the Email sent to the payer.

 

  • How to send money from India through flywire?

FLYWIRE might provide several payment options depending on the institution that a person is paying. When paying from India, they can often accept the following payment methods:

 

  • Why Universities has adopted Flywire?

With the help of Flywire, hundreds of educational institutions may adapt to the various demands of millions of students throughout the world while also enhancing operational effectiveness and cash flow. Their complete receivables solution helps their clients easily accept and reconcile payments from anybody, anywhere in the world, at any time, and is supported by a strong global payment network, top-notch security, and round-the-clock multilingual assistance.

 

  • What if Flywire is unavailable at the university you’re interested in?

Your institution might choose to provide you with a payment link to begin the payment process if you were requested to pay using Flywire but were unable to locate them in the drop-down option.

In this situation, if you have any inquiries regarding using your payment link, contact your institution immediately.

 

  • How to get assistance in India for generating payment instructions and making the payment?

IBRLIVE INDIA PVT LTD is one of the most trusted organizations in Panipat, Haryana which helps students generate payment instructions and make the final payment on a low exchange margin. You can simply visit the website https://ibrlive.com/contact and call them directly for assistance.

 

  • Is flywire cheaper than a bank transfer?

Flywire payments from India are just like sending money abroad through your bank. Neither is costlier nor cheaper. While paying through flywire from India to any university in Canada, two options are available to students. One is to convert CAD to USD and then make payment in USD through your local bank and the second option is to convert CAD into INR and send the money through RTGS. The second option is cheaper than the first one.

E-BRC meaning, new process to print E-BRC & utilization for export incentives?

E-BRC meaning, new process to print E-BRC & utilization for export incentives?

E-BRC- A digital proof of completion of export

 

E-BRC (Electronic-Bank Realizations Certificate) is a certification for all export businesses. Banks issue this as a confirmation to the exporters for goods they have shipped and payments they have received from the importer. Along with proof, it is also needed to avail the benefits that come under Foreign Trade Policy. The Director General of Foreign Trade (DGFT) in India administers the foreign trade policy and many trade incentives 

 

In this Section, we will discuss:

  1. What is the process of E-BRC printing?
  2. How to utilize the advantages?
  3. How to use e-BRC to submit an export incentive claim?

 

 

What is the process of E-BRC printing?

 

DGFT has migrated the old e-BRC portal to the new e-EBC portal

Just Follow Simple steps to view/print your e-BRCs

Step1: Visit https://www.dgft.gov.in

Step2: Click on Login and enter your DGFT user ID & Password to get in

Step3: Click on the My Dashboard menu & select Repositories

Step4: Select Bills Repositories

Step5: Under the “Select Bill” Option, click “Bank Realizations/Reconciliation (e-BRC)”

Step6: Enter your shipping bill details or date and click on search to view and print e-BRCs

 

How to utilize the advantages?

  • On the Indian Customs Electronic Data Interchange Gateway, known as ICEGATE, a shipping bill is created electronically in India. The DGFT receives the information from a shipping bill automatically and electronically via ICEGATE. To claim export incentives, an exporter must link applicable shipping bills with e-BRC.

 

  • The value on which the export incentive will be granted will be determined by DGFT when an exporter submits a claim for one under a DGFT program. For this, DGFT compares the total realised value against export as stated in the e-BRC with the Free on Board (FOB) value of the exported items as stated in the shipping bill.

 

*Point to Remember

Exporters must make sure that the bank reports the correct e-BRC value and that it displays the overall actual value when they apply for export incentives. The bank should adjust the e-BRC value if it is less.

 

How to use e-BRC to submit an export incentive claim?

 

  • Export paperwork and the Electronic Foreign Inward Remittance Certificate (eFIRCs) are delivered to the appropriate banks after payment has been received and the full amount of the shipping bill has been deposited into the bank account.
  • Bank settles the shipping bills in EDPMS and creates an e-BRC on the DGFT website.
  • The bank then uploads the acquired foreign exchange in INR currency, according to the exchange rate declared by CBEC (Central Board of Excise and Customs)
  • After that, the exporter can take the print of their e-BRC through the DGFT website.
  • Exporter then submits eBRC as proof of export to avail of various export incentives like duty drawback, RoDTEP, RoSCTL, interest subventions and GST refund.