If you are an exporter in India, you are probably aware of the two necessary authorizations required to ship your goods out of the country. The first is an Import Export Code (IEC), a business identity number provided by the General Directorate of Foreign Trade (DGFT). The second is an Authorised Dealer Code (AD Code), which is required for customs clearance of your commodities.
The following guide will help you understand the importance of the AD Code in the export business in India. Keep reading to find out:
What is an AD Code?
Why does an exporter require an AD Code?
How do you apply for an AD Code?
What is the process for registering your AD Code with customs?
Can AD Codes be modified?
What is an AD Code (authorized dealer)?
For import-export businesses, you will need a 14-digit AD Code from the bank with which you have a current account. DGFT specifies the format in which the code is printed on the bank's letterhead. A bank must deal in or be an authorized dealer of foreign currency to be able to grant an AD Code. This aligns with the purpose of an AD Code to ensure that foreign currency transactions in an exporter’s current account are from legal trade.
Exporters must register their AD Code with the seaport or airport from where they intend to ship their goods abroad. If the shipment is dispatched from an inland container depot (ICD), AD Code registration is required for that facility and the attached port. For example, suppose you ship from ICD Khodiyar in Ahmedabad. In that case, you must register there at Mundra port in Gujarat and/or Nhava Sheva in Maharashtra, as the cargo will be routed through either of these ports.
An AD Code registration has lifetime validity. However, if an exporter ships from more than one port in the same or different states, they must register the AD Code for each port. In such a scenario, the AD Codes for each port will differ.
Why does an exporter require an AD Code?
Exports require an AD Code for the following reasons:
A Shipping Bill is one of three mandatory documents for export customs clearance. And without an AD Code registration, you cannot generate a Shipping Bill on Icegate, Indian Customs’ electronic data interchange platform.
An AD Code registration with customs ensures that any government benefits you avail of – duty rebates and exemptions, GST (Goods and Services Tax) refunds, etc. – are credited directly to your current account.
How do you apply for an AD Code?
Your bank can provide an AD Code if you have a current account.
After processing your request, the bank will issue an AD Code. The bank’s authorization letter bearing the AD Code must be in Annexure-A in the following format:
What is the process for registering your AD Code with customs?
The next step is registering the AD Code with Customs once you receive it from the bank. The digital and contactless process must be completed on Icegate, the Indian Customs website. Here’s how the registration process works:
Log into Icegate
On the left panel, click on Bank Account Management.
Pick the Authorised Dealer Code Registration option on the Export Promotion Bank Account Management page that opens up.
On the left panel, click on e-Sanchit. This leads to a page that allows you to e-file documents. Upload the necessary documents, which must be digitally signed and in the prescribed form on the page. You will need to upload the following documents:
Bank’s AD Code authorization letter in Annexure-A (original)
Exporter’s letter on letterhead requesting/authorizing the registration of AD Code
Customs broker’s letter on letterhead requesting AD Code Registration
GST registration (copy)
Import-Export Code (copy)
Permanent account number or PAN (copy)
Income tax returns for the past three years (copy)
Bank statement/balance sheet for the past year (copy)
Export House Certificate (if any, copy)
Manufacturing Licence (if any, copy)
PAN, Aadhaar, voter ID/passport, and IT returns of export partner
PAN, Aadhaar, and Voter ID/Passport of the signatory
When the documents are successfully uploaded, an image reference number (IRN) and document reference number (DRN) are generated.
If you face any recurring errors in uploading the documents, you can email saksham.seva@icegate.gov.in.
Return to the Export Promotion Bank Account Management page, and click Add New Account under the Authorised Dealer Code Registration dashboard.
Enter the required bank details, IRN, and port location code (Nhava Sheva’s code is INNSA, for example), then click submit.
If the inputs are valid, a six-digit OTP (one-time password) is sent to your email ID and mobile number, and you are directed to the OTP page.
Verify the OTP. That completes your registration request. The request now goes to customs, who will approve/reject it after reviewing the documents.
By clicking the status icon, exporters can track their request status on the Authorised Dealer Code Registration dashboard.
You can view your registered AD Code and bank details on the same dashboard if your request has been approved. You can continue to add new AD Codes, accounts, and locations by following the same process.
Note: Exporters used to have to submit physical copies of their documents to customs house agents before the process went online. Unlike the current system that tells you if your request went through, exporters previously found out if their registration had been completed successfully only if they could generate a Shipping Bill on Icegate.
Can AD Codes be modified?
Yes, you can. In addition to adding new AD Codes, the Icegate facility allows you to modify an existing one. (You might need to alter your AD Code when you change your bank account, for example). A modification request must be accompanied by the following:
An exporter’s letter mentioning why you need to change the AD Code or cancel a previously registered one
The relevant bank branch’s email ID for verification
All other documents required at the time of writing an AD Code
The process to modify an AD Code on Icegate:
Select the appropriate location on the Authorised Dealer Code Registration dashboard and Modify the Account.
Select the bank name from the dropdown menu on the Modify Account page, enter the valid AD Code, IRN, and Icegate ID, and click Save Changes.
If the inputs are correct, a six-digit OTP is sent to your email ID/mobile number. Once the OTP is verified, the modification request has been made. You can view the status of your request on the dashboard.
An AD Code can be registered in just a few steps. Our goal is to make this guide as helpful as possible to you.
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