Every eCommerce seller aims to take their business globally. We often gauge our business success through our cross-border expansions, but this is not easy as we have to meet certain custom compliances. Today, humans have created a digital realm that works parallelly with our world and has given us a method to interconnect with people sitting miles away. eCommerce businesses leveraging this interconnectivity are reaching out to customers beyond their demographics and garnering profits.
Do you, smart entrepreneurs, have the same desire? The answer must be yes because that’s why you’re here. The first step to exporting internationally from India is you need to register and get some crucial documents and meet custom compliance. One such document required for customs clearance is the Authorized Dealer Code (AD code).
What is an AD Code?
An AD code (Authorized Dealer Code) is a 14-digital number given by banks (on bank letterhead) where the exporter has a current business account. It has a lifetime value. After registering for the Import Export Code (IEC) from the Director General of Foreign Trade (DGFT), you can apply for this code.
The code is compulsory for both import and export. Without this code, you can’t ship products internationally and import them as well. In addition, a copy of the code is required to get customs clearance from the port of landing, port of destination, overseas buyer banks, DGFT, and RBI.
Here is why an AD code is important:
- Authorised Dealer Code is necessary for customs clearance. If you don’t have an AD code, you can’t generate the shipping bills for customs clearances.
- AD code also helps in getting certain exemptions. Refunds, rebates, and exemptions will reflect directly in your business’s current account.
How to apply for an AD Code?
To obtain an AD code, you need to approach your bank where you’ve opened the business current account (make sure the bank deals with foreign currencies or forex). Then, write a letter to the bank manager in an authorized format. The bank will process your application, and within 3-4 working days, you’ll get an Authorised Dealer Code document with its letterhead in the format prescribed by DGFT.
The step-by-step process will look like this:
- Go to the bank
- Write a letter to the bank manager requesting an AD code in the ordered format.
- The application will be processed, and you’ll get the AD code within 3-4 working days on bank letterhead in the prescribed format by DGFT.
- Once you’ve received the code, you need to register it with Custom House Agents (CHA) of that port from where your consignment will be shipped.
- You’ve to register your AD code with the CHA of every port from where you want to clear customs and expert items. For example, if you want to export products from Visakhapatnam and Gujrat, you’ve to register the AD code with the CHA of both ports, respectively.
- All your information and your consignment details will be updated on the ICEGATE website.
Which documents are required for AD code registration on ICEGATE?
Documents required to register AD Code with CHA are:
- AD code registration authority letter
- Copy of Import Export Code
- Copy of Pan Card
- GST registration certificate
- One-year bank statement
- The company’s most recent three years’ IT returns and those of its partners.
- The objective of the Board of Directors (in the case of Pvt. or Ltd. companies)
- Manufacturer’s License (if applicable)
- Copy of the Export House Certificate
- Partner’s PAN Card and Aadhar Card copies.
What are The Steps to Register an AD Code on the ICEGATE Website?
You can also register the Authorised Dealer Code with the customs website, ICEGATE. Again, the process is very easy and simple. All you need to do is open the ICEGATE website, click on “register an ad code”, enter all the details, and click the “register” button.
The process of registering an authorised dealer code will look like this:
- Open the ICEGATE website and log in with your id and password.
- Click on the Bank Account Management panel visible in the left panel; then you’ve to click on AD code registration.
- The dashboard will open, and fill out all the necessary details mentioned on the website, including location, bank name, and AD code.
- Once you successfully upload all the details, an Image Reference Number (IRN) and Document Reference Number (DRN) are generated.
- After you enter all valid inputs, click on save changes. A six-digit OTP will be sent to your email id and phone number.
- Once the OTP is verified, submit a bank account modification request to ICEGATE.
- Once the bank account adds a request approved, the details will start reflecting on the AD code dashboard.
Import-export customs and compliances are daunting for new eCommerce retailers. However, it is not supposed to be an issue if you follow a particular process. Although the Authorised Dealer Code and getting other documents and clearance is the first step in international selling, there is much more to come.
In International eCommerce, sellers often get overwhelmed and seized by logistics complications. Somewhere, they try to do everything by themselves but don’t have enough knowledge. In situations like these, getting help from logistics partners like NimbusPost is the best solution. NimbusPost will help you with every bit and piece of logistics, from choosing an efficient carrier to calculating shipping costs to ensure your carriage is shipped safely to the other end.