Navigating International Trade with the Authorized Dealer Code (AD Code)

Updated on May 21, 2024

International trade, a cornerstone of the global economy, relies on a complex web of regulations and procedures to facilitate the smooth flow of goods across borders. Among the numerous requirements for successful trade operations, the Authorized Dealer Code (AD Code) stands out as a vital component. This article delves into the significance of the AD Code in international trade, explaining its role, benefits, the registration process, and the specific procedures associated with ICEGATE AD code registration.

Understanding the Authorized Dealer Code (AD Code)

The Authorized Dealer Code (AD Code) is a 14-digit numerical identifier issued by the bank where a company maintains its business current account. This code is essential for exporters and importers, serving as a crucial link between their bank and customs authorities. The AD Code is mandatory for generating shipping bills, which are necessary for customs clearance during import-export operations. Its primary function is to facilitate the monitoring and regulation of foreign currency transactions, ensuring transparency and stability in the international trade arena.

The Importance of the AD Code in Import-Export Business

The AD Code is integral to various aspects of the import-export business, providing several benefits that streamline trade processes and support economic stability. Here are the key reasons highlighting its importance:

 1. Tracking Foreign Currency Trades

The AD Code allows the government to monitor and track foreign currency transactions, ensuring transparency and stability in the economy. By keeping a record of these transactions, authorities can regulate foreign exchange activities effectively, contributing to economic health and compliance with international trade regulations.

 2. Mandatory for Customs Clearance

One of the critical requirements for customs clearance is generating a shipping bill. Without an AD Code, traders cannot produce this essential document, leading to significant delays and complications in customs procedures. The AD Code serves as a unique identifier that links a trader’s details with customs authorities, facilitating smooth and efficient customs clearance.

3. Direct Deposit of Government Benefits

AD Code registration enables the direct deposit of government benefits, incentives, or subsidies into the exporter’s bank account. This process eliminates the need for manual paperwork and administrative procedures, ensuring quick access to financial support that exporters may be entitled to, thereby enhancing their financial stability and growth prospects.

4. Simplifying Import-Export Processes

For startups and businesses entering the import-export domain, understanding and obtaining an AD Code is crucial. The AD Code simplifies the import-export process by providing a standardized identification for engaging in foreign trade activities. Additionally, it 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 indispensable in the import-export business. It enables the government to track foreign currency transactions, ensures compliance with customs requirements, facilitates the 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 the AD Code

An important aspect of the AD Code is its lifetime validity, which remains effective unless there are changes to the associated bank account. It is crucial to keep the AD Code letter safe, as it will be required for customs clearance procedures and future export transactions.

Documents Required for AD Code Registration

To register for an AD Code, certain documents are necessary:

1. Bank Certificate as per Customs Public Notice No. 93/2020: This certificate should be obtained from the bank and must comply with the prescribed format mentioned in the customs public notice.

2. Company PAN Card with Seal and Signature: A copy of the company’s PAN (Permanent Account Number) Card, duly stamped and signed.

3. IEC Certificate with Seal and Signature: The Import Export Code (IEC) Certificate, serving as a unique identification number for importers and exporters, with the company’s seal and signature.

4. 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.

5. Company Canceled Cheque: A canceled cheque from the company’s bank account bearing the company’s name and account details, verifying the authenticity of the bank account associated with the AD Code registration.

6. Class 3 Digital Signature Certificate (DSC): A Class 3 Digital Signature Certificate, obtained from a licensed Certifying Authority, ensuring 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.

ICEGATE AD Code Registration Procedure

The ICEGATE (Indian Customs Electronic Commerce/Electronic Data Interchange Gateway) portal facilitates various customs-related services, including AD Code registration. The following is a detailed procedure for ICEGATE AD Code registration:

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.

Conclusion

In conclusion, navigating the intricacies of international trade, such as the essential Authorized Dealer Code (AD Code), demands precision and expertise. At FreightMango, our professionals specialize in simplifying such complexities, ensuring seamless customs procedures, freight insurance, and overall trade facilitation. For any assistance or guidance in optimizing your import-export activities and ensuring regulatory compliance, don't hesitate to get in touch with our dedicated team of experts. Let us be your trusted partner in fostering a transparent and thriving global trade landscape.

 

 
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