Authorized Dealer Code (AD Code)
Authorized Dealer Code (AD Code)
In international trade, navigating customs procedures and regulations is fundamental to conducting business across borders. Among the essential requirements for seamless customs clearance and efficient trade operations is the Authorized Dealer Code (AD Code). The Authorized Dealer Code, commonly called the AD Code, serves as a unique numerical identifier issued by the bank where a company maintains its current account. This code plays a crucial role in customs procedures, specifically during the export and import of goods. In this article, we will delve deeper into the significance of the Authorized Dealer Code (AD Code) in international trade.
Authorized Dealer Code (AD Code)
Whether you are an established exporter, an aspiring entrepreneur, or a well-known local seller, the aspiration to expand your brand and transform it into a global business is a common dream. With the advent of e-commerce exports and the seamless process it offers, numerous sellers from India are venturing into international markets and connecting with new customers worldwide. The initial step involves obtaining essential documents and ensuring compliance with regulatory obligations to embark on an export journey from India. Among these requirements, obtaining an AD Code (Authorized Dealer Code) is crucial for customs clearance.
The AD Code is a 14-digit numerical code issued by the exporter’s bank where they hold a business current account. This code, accompanied by the bank letterhead, can be acquired once the exporter has successfully registered for an Import Export Code (IEC) through the Director General of Foreign Trade (DGFT). It is important to note that the AD Code has lifetime validity, meaning it does not expire and remains valid indefinitely.
The Importance of AD Code in Import-Export Business
The AD Code plays a significant role in the import-export business, offering several benefits that contribute to a streamlined trade process and a stable economy. Here are some key reasons highlighting the importance of AD code:
Tracking Foreign Currency Trades
AD code registration allows the government to monitor and track foreign currency trades. This helps ensure transparency and stability in the economy by enabling authorities to record foreign exchange transactions conducted by importers and exporters.
Mandatory for Customs Clearance
Generating a shipping bill is crucial for customs clearance during import-export operations. Without a registered AD code, traders will face obstacles in generating the shipping bill. AD code is a unique identifier that links the trader’s details with customs authorities and facilitates smooth customs clearance procedures.
Direct Deposit of Government Benefits
AD code registration offers the advantage of having government benefits, incentives, or subsidies directly deposited into the exporter’s bank account. This streamlined process eliminates the need for manual paperwork and administrative procedures, ensuring quick access to financial support to which exporters may be entitled.
Simplifying Import-Export Processes
Understanding and obtaining an AD code is crucial for startups and businesses entering the import-export arena. By generating an AD code, dealers can enjoy a hassle-free import-export process, as it is a standardized identification for engaging in foreign trade activities. Additionally, AD code registration helps the government maintain a comprehensive record of dealers involved in international trade, contributing to effective regulation and oversight.
In summary, the AD code is paramount in the import-export business. It enables the government to track foreign currency transactions, ensures compliance with customs requirements for customs clearance, facilitates direct deposit of government benefits, and simplifies import-export processes for traders. By familiarizing themselves with the AD code and its functionalities, importers and exporters can optimize their trade operations and contribute to a well-regulated and thriving international trade environment.
Validity of AD Code
Remember that the AD code registration has a lifetime validity unless there are changes to your bank account. Ensure you keep the AD code letter safe, as it will be required for customs clearance procedures and future export transactions.
The following documents are required for AD Code registration:
- Bank Certificate as per Customs Public Notice No. 93/2020 dated 29.07.2020 (format attached) – This certificate should be obtained from the bank and must comply with the prescribed format mentioned in the customs public notice. You can refer to the format in the link: Bank Certificate Format.
- Company PAN Card with Seal and signature: A copy of the company’s PAN (Permanent Account Number) Card, duly stamped and signed, needs to be submitted.
- IEC Certificate with Seal and Signature: The Import Export Code (IEC) Certificate, which serves as a unique identification number for importers and exporters, should be provided with the company’s seal and signature.
- GST Certificate with seal and signature: A copy of the Goods and Services Tax (GST) Certificate, issued by the appropriate authority, along with the company’s seal and signature, must be submitted.
- The company canceled cheque – A canceled cheque from the company’s bank account bearing the company’s name and account details needs to be provided. This verifies the authenticity of the bank account associated with the AD Code registration.
- Class 3 Digital Signature Certificate (DSC) – A Class 3 Digital Signature Certificate, obtained from a licensed Certifying Authority, is required to ensure the authenticity and security of the online submission process.
Applying for an AD Code: Step-by-Step Guide
To obtain an AD code for each port through which your shipments will travel, follow these steps:
Step 1: Visit Your Business Bank
Visit the bank where you hold your business’s current account. This is the bank that will issue the AD code for you.
Step 2: Submit an Application
Apply to the branch manager, addressing your request for an AD code. Provide all the necessary details and supporting documents as requested by the bank.
Step 3: Obtain the AD Code Letter
Once your application is processed and approved, you will receive an AD code letter from the bank. The letter should be in the format specified by the Directorate General of Foreign Trade (DGFT) and printed on the bank’s letterhead. The AD code letter serves as proof of your registration.
Step 4: AD Code Registration for Each Exporting Port
With the AD code letter, you can register for an AD code at each port you export. Present the AD code letter to the respective customs authorities at each port to complete the registration process.
Important Note: No Online Application Facility
It’s important to note that no online facility can obtain an AD code. The process must be done in person at your business bank and by visiting the customs authorities at each exporting port.
AD Code Registration Procedure
AD Code Registration Procedure is explained in Detail below:
Login to ICEGATE Portal:
- Access the ICEGATE portal by visiting the official website.
- Login using your credentials, such as your user ID and password.
- Click on Filing Services and Select e-Sanchit:
- Once logged in, navigate to the Filing Services section on the portal.
- Look for the option labeled “e-Sanchit” and click on it.
Upload Supporting Documents and Generate DRN and IRN Numbers:
In the e-Sanchit section, you will find the option to upload documents. Ensure you have all the required supporting documents for AD Code registration. Upload the necessary documents as per the specified guidelines.
After successful upload, the system will generate the Document Reference Number (DRN) and the Invoice Reference Number (IRN). Make a note of these numbers for future reference.
Select Financial Services:
Return to the main page of the ICEGATE portal by clicking on the appropriate link or navigating back. Look for the Financial Services section on the main page.
Choose Bank Account Management and then AD Code Registration:
Within the Financial Services section, locate and select the option for Bank Account Management. From the following options, choose AD Code Registration. Fill in the Required Details in the Registration Form: You will be presented with the AD Code registration form.
Fill in all the required details accurately and completely. Ensure you provide company details, contact information, PAN Card details, IEC Certificate details, GST Certificate details, and other relevant information as requested.
Submit the AD Code Registration Form:
Review the information filled in the registration form carefully to ensure accuracy. Once you are confident that all the details are correct, submit the AD Code registration form. The system will process your registration request.
After completing these steps, your AD Code registration request will be submitted. You may receive a confirmation or acknowledgment of your registration via email or on the portal. It is essential to keep track of any updates regarding your AD Code registration status and follow up with the relevant authorities if required.