The bank provides a unique 14-digit code called an Authorized Dealer Code for import-export business that hold current accounts.
This code ensures that the exporter’s current account is authorized for legal transactions and is issued in a format specified by the Directorate General of Foreign Trade (DGFT).
The exporters are required to register their AD CODE at the shipping port or the airport from where their export products are dispatched to destination countries.
If the exporters ship from multiple parts in different cities or states, then each port will have different AD CODE.
The registration of AD CODE is valid for lifetime.
2. Significance
Three aspects of international transport require an AD CODE:
For Exporters: An AD CODE is required for a number of foreign exchange operations, including receiving payments for exports, when an Indian company or individual engages in overseas trade.
For Importers: When paying for imports importers can also require an AD CODE. This code aids in making sure that import-related foreign exchange transactions are appropriately authorized and documented.
Trade records: In several trade papers, including the bill of lading, shipping bill, and letter of credit, the AD CODE is frequently required. It facilitates the keeping track and documentation of foreign exchange transactions related to global trade.
3. AD CODE Impact on Import/Export Business
Assist with the export process:
A shipping bill is essential for customs clearance.
Without AD CODE, it is impossible to generate a shipping bill for your cargo.
The AD CODE also enables the access to the government benefits such as GST refunds, duty rebates, and exemptions, which are directly credited to the bank account associated with your business.
Assist with export process:
The registration system of AD CODE for foreign currency trades enables the Government to oversea these transactions, promoting transparency and economic stability.
It provides the ability for authorities to monitor the foreign exchange activities of companies involved in the import and export of goods and services.
Regulators utilize this understanding of international money flow safeguard the general economic well-being of the country.
Essential for Customs Clearance:
Creating a shipping bill is crucial for facilitating the passage of your goods through customs when engaging in import and export activities.
Without a registered Authorized Dealer Code, you will encounter obstacles when generating this shipping bill.
The AD CODE serves as a distinctive marker that connects your business information to customs authorities, streamlining the customs clearance process.
By registering the AD CODE, you can receive the government benefits, incentives, or subsidies directly into your bank account. This method removes the need for extensive paperwork and bureaucratic procedures, guaranteeing swift access to any financial assistance that your exporting business is eligible for.
4. Documents Required
AD CODE letter should be provided.
Company PAN CARD copy (with seal and signature) needs to be submitted.
Bank certificate in accordance with customs.
GST Certificate copy.
IEC Certificate copy also required.
The cancelled cheque from the company is to be provided.
Class 3 Digital Signature Certificate (DSC) is necessary.
Information of Director, proprietor, or partner (copy of PAN card, Voter ID, Aadhar card, passport) needs to be submitted.
Export House Certificate is optional.
Exporters having valid IEC, and the account with the bank issuing AD CODE.
6. Conclusion
For exporters, this code is crucial for handling foreign trade dealings and facilitating customs clearance for their goods. It is directly associated with the exporter’s main bank account, which is utilized for receiving foreign currency.
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