IEC (Import Export Code)

IEC (Import Export Code) is a 10-digit permanent identification number issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce, that is mandatory for any person or entity carrying out import or export transactions in India. The IEC is linked to the entity's PAN and is required before the first cross-border commercial transaction — whether goods shipments or services exports.

For software, SaaS, and services startups, the IEC is the entry point into the export compliance stack: it is required to receive foreign currency legally, to file a Letter of Undertaking (LUT) for GST zero-rating, and to access DGFT export promotion schemes.

Who it applies to

• Any startup invoicing foreign clients in foreign currency for software, SaaS, consulting, or professional services
• Product companies exporting physical goods to international customers
• Startups receiving inward remittances from foreign customers or parent entities
• Businesses importing equipment, components, or raw materials from abroad
• Any company filing a Letter of Undertaking (LUT) for GST zero-rated exports

What IEC enables

How to obtain an IEC

1. Register on the DGFT portal (dgft.gov.in) using the company's PAN
2. Submit the online IEC application with PAN details, Aadhaar of authorized signatory, business address, and bank account details (cancelled cheque or bank certificate)
3. Pay the ₹500 government fee online
4. IEC is issued electronically — typically within 1–3 working days
5. Download the e-IEC from the DGFT portal; it requires no physical document

The IEC does not expire. However, it must be updated through the DGFT portal annually to reflect current address, bank account, and business details.

IEC and GST zero-rating

Services exported to foreign clients are zero-rated under GST — no GST is charged and input tax credit is refundable. To benefit from zero-rating without paying GST upfront and claiming a refund, a startup must file a Letter of Undertaking (LUT) annually with the GST portal. The LUT application requires the IEC. A startup that invoices foreign clients without an LUT must charge 18% GST and then file for a refund — tying up working capital unnecessarily.

What most founders miss

The bank needs the IEC before processing large inward remittances. While small remittances may process without an IEC, banks issuing a Foreign Inward Remittance Certificate (FIRC) or Bank Realisation Certificate (BRC) will ask for the IEC for the transaction record. Without a valid FIRC/BRC, the startup cannot claim the remittance as an export or file RBI-required Softex returns. Obtain the IEC before the first foreign invoice is raised, not after the first payment arrives.

Annual update is mandatory — even if nothing has changed. DGFT requires all IEC holders to confirm their details annually through the portal. If a startup fails to update for multiple consecutive years, the IEC may be flagged as inactive, which can block LUT filing and export benefits. The update takes under 5 minutes and has no fee.

IEC is entity-level, not transaction-level. A single IEC covers all export and import activity of the company — there is no per-shipment or per-client registration. All export invoices from all foreign clients flow under the same IEC.

See also

• Letter of Undertaking (LUT) — requires IEC; allows zero-rated GST on service exports without upfront payment
• GST Registration — a prerequisite for LUT; both GST registration and IEC are needed for a compliant export setup
• FEMA (Foreign Exchange Management Act) — governs receipt of foreign currency from exports; IEC is the DGFT credential alongside FEMA compliance
• Form 15CA / 15CB — required for cross-border remittances; works alongside IEC in the export/import compliance stack