What is the process to deactivate or surrender an IEC Code?

An Import Export Code (IEC) is a mandatory registration required for businesses engaged in importing or exporting goods and services from India. This unique 10-digit code, issued by the Directorate General of Foreign Trade (DGFT), is essential for businesses to conduct international trade. However, circumstances may arise where a business no longer needs its IEC, leading to the decision to deactivate or surrender it. Whether due to a change in business direction, closure, or any other reason, deactivating or surrendering an IEC Code involves a specific process. This article will guide you through each step required to deactivate or surrender your IEC.

Understanding IEC and When to Deactivate or Surrender It

Before delving into the deactivation process, it’s essential to understand why an IEC code might be surrendered or deactivated. An IEC registration is valid for the lifetime of a business and does not need renewal. However, if a business permanently discontinues import or export operations, or if it is dissolved, there may no longer be a need for the Import Export Code Registration.

Common reasons to surrender or deactivate an IEC include:

• Change in Business Operations: The business has stopped import/export activities.
• Business Closure: The entity has been closed or dissolved.
• Change in Business Ownership or Merger: New owners may wish to register a fresh IEC under their entity.
• Non-Compliance Issues: In cases where businesses are non-compliant with regulations, deactivation might be required.

Deactivating or surrendering the IEC ensures that the business is no longer liable for compliance requirements associated with international trade.

Steps to Deactivate or Surrender an IEC Code

The process for deactivating or surrendering an IEC Code is conducted entirely online through the Directorate General of Foreign Trade (DGFT) portal, making it easy to complete from anywhere. Here’s a step-by-step guide:

Step 1: Visit the DGFT Portal

1. Log into the DGFT Website: To start the deactivation or surrender process, visit the DGFT’s official website at www.dgft.gov.in.
2. IEC Services: Under the ‘Services’ section, look for the IEC profile management options. This area includes all services related to IEC, including deactivation and modifications.

Step 2: Log Into Your IEC Account

1. Enter Login Credentials: Use the login credentials (User ID and Password) that you received upon registering your IEC on the DGFT portal. If you’re accessing the DGFT portal for the first time, you may need to set up an account using your IEC and associated information.
2. Find the way to Manage IEC: Once logged in, find the ‘Manage IEC’ section, which will give you access to your IEC details and update options.

Step 3: Submit an Application for IEC Deactivation

1. Choose the Deactivation Option: Within the ‘Manage IEC’ section, locate the surrender or deactivation option.
2. Fill Out the Deactivation Form: You’ll be prompted to complete a form providing specific details about why you want to surrender or deactivate the IEC. Details like business information, IEC code, and reason for deactivation will be requested.
3. Supporting Documents: In some cases, you may need to upload relevant documents that justify the deactivation request, such as proof of business closure or dissolution.

Step 4: Verify and Submit the Application

1. Review Application Details: Before submitting, carefully verify all information to ensure accuracy.
2. Submit the Deactivation Request: Click the ‘Submit’ button to send your application for deactivation or surrender of the IEC code to the DGFT.

Step 5: Confirmation and Approval Process

Once the application for deactivation is submitted, the DGFT will review the request. If everything is in order, you will receive confirmation of IEC deactivation on the registered email associated with your DGFT account.

• Processing Time: The approval process typically takes a few days, although the timeframe may vary based on DGFT’s workload.
• Deactivation Confirmation: You’ll be notified via email once the IEC has been officially deactivated.

Key Points to Consider Before Deactivating an IEC

While deactivating or surrendering your IEC code may seem straightforward, there are a few key points to keep in mind:

1. Permanent Action: Deactivation is typically permanent, meaning that once the IEC is surrendered, the business will have to apply for a new IEC if it resumes import/export activities in the future.
2. Outstanding Compliance: Ensure that all previous transactions and regulatory filings related to the IEC are complete before initiating the deactivation process to avoid potential issues or penalties.
3. Impact on Trade License: For businesses with active licenses for imports or exports, deactivating the IEC may affect the status of those licenses.

How to Update IEC Details Instead of Deactivating

If the purpose behind your deactivation request is simply to make updates or modifications to the IEC code (such as change of address, contact details, or ownership information), it might be more appropriate to update the IEC rather than deactivate it. Updating IEC details also requires logging into the DGFT portal:

1. Log In to DGFT Account: Access the ‘Manage IEC’ section.
2. IEC Update Options: Select the ‘Update’ option instead of ‘Deactivate’ to make any necessary modifications.
3. Submit Updated Information: Provide new details and submit the updated form.

This update ensures the IEC remains active with the correct information, which may be a better choice if your business is planning to continue operations.

Frequently Asked Questions (FAQs)

Q1: Can I reactivate an IEC after deactivation?

• Once an IEC code is deactivated, it cannot be reactivated. If the business needs an IEC in the future, it will need to apply for a new IEC registration.

Q2: Do I need to pay any fees to surrender or deactivate my IEC?

• Currently, the DGFT does not charge a fee for deactivating or surrendering an IEC.

Q3: Is deactivation required if a business is sold to another party?

• If a business is sold, the new owners may choose to apply for a fresh IEC in their name. The original owner can deactivate their IEC code to avoid future compliance responsibilities.

Q4: How do I know if my IEC is successfully deactivated?

• The DGFT will send an email confirmation once the deactivation is complete. You can also log in to the DGFT portal to verify the status of your IEC.

Conclusion

Deactivating or surrendering an Import Export Code (IEC) can be a necessary step for businesses that no longer require this registration due to closure, inactivity in imports/exports, or ownership changes. The deactivation process, conducted online through the DGFT portal, is straightforward, and once deactivated, the business will no longer be obligated to maintain compliance related to IEC.