Globalisation and the internet revolution have opened enormous export opportunities for the Indians. With the ease of doing business and the world evolving as a global village, every entrepreneur or businessman dreams up of exporting their goods and services. But there are certain rules and regulations of import and export that need to be followed.
To export from India, an exporter needs various types of permits. The three permits import-export codes and business identification numbers which are issued by the director-general of foreign trade, and the AD code are required to be obtained.
Did you know that? You can register your AD code with custom house agents online from the comfort of your home.
What Is AD Code?
The full form of the AD code is the Authorised dealer code. It is a unique 14 digits number issued by the bank with which the exporter maintains a current bank account. The bank that deals in foreign currency are eligible to issue an AD code. The exporter first has to obtain an import-export code from the Director-General of foreign trade before he applies for an AD code. The Authorised dealer code is valid for a lifetime. The exporter is required to register the AD code at the ports from which he will be exporting goods. He is required to register all the ports or airports separately from which goods are to be exported. The main purpose of this code is to keep a check on foreign currency transactions in the exporter's bank account. To ensure that transactions are legal.
Why is the Authorised Dealer Code Needed by the Exporter?
To complete the export clearance process, the exporter needs to generate a shipping bill. A shipping bill contains complete details of the goods to be exported, the port from where it is to be exported, the final destination county etc. On the basis of the shipping bill customs officer gives permission for export. This shipping bill is generated on the Indian Custom electronic data interchange platform. It is also known as Icegate. The Icegate doesn't generate shipping bills without an Authorised Dealer code.
Another reason for holding an AD code is that any benefits like duty drawbacks, tax refund, rebates etc., are directly credited to the exporter's current account. In this way, government make sure that the foreign exchange earned is legal.
How to Apply for an Authorised Dealer Code?
The exporter has to apply for an AD code by submitting a physical application letter at his bank. Few banks may provide the facility of online application, but that is only bank-specific.
The following steps are for obtaining the AD code from the bank in which the exporter maintains a current account.
- First, open a current account in a bank that deals in foreign exchange.
- File an application for the allotment of AD code to the bank in the format given by them. Following is the sample application format.
Subject - Request for Authorised Dealer code for reporting Customs Dept.
Sir / Madam,
I XYZ having my current account no XXXXXXXXXXXXXX with your Bank would like to Export goods to Foreign Country. For this purpose, I need the AD code and other details for export registration with the customs department.
So please kindly issue me an Authorised dealer code in the prescribed format of director-general of foreign trade. I am attaching my Import-export code.
I request you to address this matter urgently.
- Bank will process the application and issue the AD code in the AD Code format prescribed by the Director-General of foreign trade.
- After obtaining the AD code, register it with the ports from where goods are to be exported. Submit the necessary documents for registration at Customs House Agents.
How to Register an Authorised Dealer Code With Customs?
Earlier, when the online application system was not introduced, the exporter had to deliver physical documents to the customs house agents. And then custom officers used to process from there. But now, exporters can apply for AD code registration online from the comfort of their homes.
Let’s look at the process of registration and the documents required.
- The next step after receiving the AD code from the bank is to get registered with the customs department. The process will be completed on Icegate.
- Documents Required:
The following documents will be required to be uploaded:
- The Authorisation letter of the AD code that was issued by the Bank in the original.
- Exporters application on his letterhead for registration of AD code
- Self-attested copy of PAN
- Copy of Goods and Service Tax registration
- Copy of import and export code.
- Self-attested copy of Income tax returns for the last three financial years.
- Copy of Past year's bank statement.
- If the exporter is a manufacturer, he will have to furnish the manufacturing licence.
- The copy of Aadhar, voter id, and passport.
- Open Indian custom Electronic gateway and login with your credentials.
- Click on “Bank account management” on the left side of the website.
- Now select “Export Promotion bank Account Management” and click on “Authorised dealer code registration”.
- Now click on “E-Sanchit”, and this will lead to the window where exporters have to e-file the documents that are mentioned above. In prescribed form and digitally sign them.
- After successfully uploading documents, the portal will generate a document reference number and an image reference number.
- In case the exporter faces any problem or error, it can drop a mail to “firstname.lastname@example.org”
- Now again, go back to “Authorised dealer code registration”, click on “ add a new account”, and enter all the necessary details such as bank account details, image reference number, and port location code from where goods are to be exported.
- A six-digit one-time password will be generated and sent to the registered email id and mobile number.
- A opt verification screen will appear. After verification of OTP, the process for the application for registration of AD code is complete. Now customs department will check the details and either accept the application or reject it.
- If the application is accepted, the exporter’s bank details and Authorised dealer code will appear on the explorer’s dashboard.
- An exporter can add multiple AD codes by following the same process.
- The exporter can check the status of the application for registration under “Authorised dealer code registration.”
Can Exporter Make Some Changes in or Modify the Registered Authorised Dealer Code?
In simple words, the answer is yes, and one can modify the AD code. The Indian Custom electronic gateway (Icegate) facilitate not only the addition of new AD codes but also facilitates the amendment or modification of the existing AD code.
The modification can be required for the following reasons:
- The exporter has changed his bank account.
- Change in port/ airport or shipment.
- The exporter no longer exports goods.
The following documents are to be submitted while applying for the modification of the AD code.
- The letter by the exporter mentions the reason for the change or cancellation of the existing AD code.
- The details of the relevant bank and its email id for verification.
- And the same list of documents that are required at the time of fresh application of registration of AD code.
How to apply modification on the portal:
- Login to the Icegate portal.
- Click on “Authorised dealer code registration” now select “modify.”
- Now from the “modify” menu, select the bank, enter the valid AD code and the image reference number and click save changes.
- The portal will send once time password to the mail id and mobile number if the submitted details are correct.
- As soon as OTP is verified, the modification application is complete.
An Authorised dealer code is important for the exporter. It is not only important for getting shipping bills. The exporter can claim various government benefits, such as refund of GTS, duty drawback, rebates, refund of import duty etc., directly to his current account. It helps the government in keeping a check on the sources of foreign exchange.
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