Before you begin any import or export
business, you must have the needed knowledge on customs. This blog will explain
you on the topic
If you are thinking about starting import
and export business, you must be thinking of customs, how to clear off the customs,
what are the procedure and what you need there. So, during this you need to
have an Authorized Dealer code (AD Code). Basically this is a 14-digit
numerical code that you will get from the bank which is linked with your
business account. For your goods to be cleared in customs you need to register
an AD Code in each and every port is passes through. There will be Customs
House Agent (CHA) who will ask you to mention the AD code for customs clearance
of that respective port.
There is some importance of AD Code in
exports that you must know about. For customs clearance you must have a
registered AD Code. If you are not having this code, then you may not be able
to get the shipping bill number which is complement for customs clearance.
There will be EDI system of ICE Gate portal which will provide you the shipping
bill, but in absence of the registered AD code you will not be able to get it.
There might be some benefits that the
government may give to you. To gain these kind of benefit AD code must be
registered. With this registration the customs will help you to get those
benefit and get it credited to your current account. Registration of the AD
code must be done at customs after you receive your Import Export code.
What are the ways of applying for AD Code registration?
As said before you will have to register
the AD code in every port from where your goods are being passed. For instance,
if you are exporting goods from Gujarat, you can clear the customs from Mundra
and Ankleshwar but you must have separate AD code for this.
To receive an AD Code, you need to submit
an application to the bank to request it against your business account. You
have to send this application to the branch manager in the recommended format.
As prescribed format by the Directorate general of Foreign Trade (DGFT) the
bank will issue a 14-digit AD code on its letterhead.
Following the process of apply AD Code Registration:
- You must go to the bank which is the authorized dealer of forex or
which deals on foreign currency.
- You can apply for an AD Code Registration in the bank. The format for
application is given below
- Further processing of application will be done by bank to issue an
AD Code
- The AD Code must be registered with the CHA by the exporter
him/herself
- After the registration is processed the information of the exporter
and the shipping consignments will spear in the website of ICEGATE.
Explain about AD Code - Format
If you are an exporter applying for an AD
Code, you could follow the format below:
Format of bank’s AD Code letter
Register AD Code with Customs
What are the documents necessary for
approaching CHA?
The AD Code issued by the bank must be
registered to the customs and for this you must approach to the CHA with the
following documents:
- The AD Code registration authority letter which is issued by your bank
- Self-attested copies of:
Document required for AD Code Registration
- GST Registration
- IT returns of the
company or self and partners of last three years
- Bank statement, generally for the last 12 months
- Import Export Code
- Company’s PAN
- Board resolution
- Partner’s PAN, Aadhaar card, and voter ID/passport
- Signatory PAN, Aadhaar card and voter ID/passport, along
with originals
- Export House Certificate (optional)
The requirements mentioned above may change
as per the situation. The documents will be received by the CHA and from there
it will submit those documents to the customs from your side. This will take
time of about 3-4 working days.
During the filing while exporting if the
shipping bill is generated in the Electronic Data Interchange (EDI) system, it
reflects that the AD Code has been registered. One point you should keep in
mind is that AD Code must be registered in every port from where your goods
will be passed. Once the AD Code is registered is has lifelong validity for
that certain port.
