The globalization of trade has created immense opportunities for businesses to expand beyond domestic markets. To participate in import-export activities in India, businesses must comply with various regulations, including AD Code registration.
An Authorized Dealer (AD) Code is essential for importers and exporters to receive foreign remittances and clear shipments at Indian ports. This guide will explain the importance of AD Code registration, the step-by-step process for AD Code registration on ICEGATE, its role in import-export, and related registrations like company registration, private limited company registration, OPC registration, Section 8 company registration, subsidiary company compliance, GST registration, and GST cancellation.
What is AD Code Registration?
AD Code (Authorized Dealer Code) registration is a mandatory requirement for businesses engaged in import and export transactions in India. The AD Code is a 14-digit numerical code issued by a bank authorized by the Reserve Bank of India (RBI). This code helps businesses in:
-Customs clearance of shipments.
-Foreign exchange transactions related to imports and exports.
-Bank remittance processing for overseas payments.
The AD Code must be registered with the customs department via the ICEGATE portal to facilitate seamless cross-border trade.
Why is AD Code Registration Important?
-Customs Clearance: Without AD Code registration, importers and exporters cannot clear goods at customs.
-Banking Transactions: It enables smooth foreign remittances and transactions.
-Government Compliance: AD Code ensures compliance with DGFT (Directorate General of Foreign Trade) regulations.
-GST Compliance: Businesses with GST registration linked to import-export require an AD Code.
-Foreign Trade Policies: The AD Code is required for availing benefits under India’s foreign trade policies.
Who Needs AD Code Registration?
Any business engaged in international trade must complete AD Code registration. This includes:
-Private limited company registration businesses.
-One Person Company (OPC) registration entities.
-Subsidiary companies involved in exports.
-Section 8 company NGOs exporting products/services.
-Sole proprietorships and partnerships dealing in import/export.
Even businesses that plan to cancel their GST registration (GST cancellation) but continue international trade must maintain an active AD Code.
Step-by-Step Process for AD Code Registration
Step 1: Obtain the AD Code from Your Bank
1. Open a current account with an Authorized Dealer Bank (a bank approved by RBI for foreign exchange transactions).
2. Request an AD Code letter on the bank’s official letterhead.
3. Submit the required documents:
-Company incorporation certificate (Company registration proof).
-Import Export Code (IEC) issued by DGFT.
-GST registration certificate (if applicable).
-PAN and Aadhaar of directors or proprietors.
-Business address proof.
Step 2: Register the AD Code on ICEGATE (Customs Portal)
ICEGATE (Indian Customs Electronic Gateway) is the official platform for filing shipping bills and AD Code registration.
How to complete ICEGATE AD Code Registration?
1. Visit ICEGATE Website: Go to www.icegate.gov.in.
2. Login to ICEGATE Account: Register an account if you don’t have one.
3. Go to the ‘Bank Account Registration’ Section: Select AD Code Registration.
4. Enter 14-Digit AD Code: Provide the bank-issued AD Code.
5. Upload Required Documents: Upload AD Code letter, IEC certificate, and company incorporation details.
6. Submit the Application: The request is forwarded to the Customs Department for approval.
7. Approval & Confirmation: Once approved, the AD Code is linked to your shipping port.
After registration, importers and exporters can file shipping bills online and proceed with international transactions.
Documents Required for AD Code Registration
-AD Code Letter from the Bank
-Company Incorporation Certificate (For Pvt Ltd, OPC, Section 8, or Subsidiary Company)
-Import Export Code (IEC) Certificate
-GST Registration Certificate (If applicable)
-PAN and Aadhaar of Directors or Proprietors
-Business Address Proof (Rent agreement, electricity bill, etc.)
AD Code Registration on ICEGATE: Benefits
-Smooth Customs Clearance – Ensures hassle-free import/export operations.
-Seamless Bank Transactions – Facilitates foreign currency transactions.
-Compliance with RBI & DGFT – Ensures business legal compliance.
-Easy GST Integration – Links GST registration with import/export.
-Access to Government Incentives – Helps to benefits like MEIS, SEIS, and duty drawback schemes.
Common Challenges in AD Code Registration
-Rejection Due to Incorrect Documentation – Ensure all documents are valid.
-Mismatch in IEC & Bank Details – The details on your IEC certificate must match your bank details.
-Delayed Approval on ICEGATE – Sometimes approval takes 7-10 days. Follow the Customs Office if needed.
-Issues with Multiple Ports Registration – Each port requires a separate AD Code registration.
How to Modify or Update AD Code?
If there are changes in bank details or business information, the AD Code must be updated on ICEGATE.
Steps to Update AD Code
-Obtain a Revised AD Code Letter from your bank.
-Login to ICEGATE Portal and go to the AD Code section.
-Select ‘Modify AD Code’ and update details.
-Upload the new AD Code letter and necessary documents.
-Submit the request and wait for approval.
AD Code Registration and GST Compliance
Businesses registered under GST must link their GST registration with the AD Code for tax compliance. If a company undergoes GST cancellation, they must notify the customs office to avoid complications in AD Code transactions.
GST Cancellation and Impact on AD Code
-If GST is canceled voluntarily, ensure the AD Code remains active for exports.
-GST cancellation does not automatically cancel the AD Code; a separate request must be made to the customs department if needed.
-After cancellation, companies must file ‘LUT’ (Letter of Undertaking) for GST-free exports.
AD Code Registration for Different Business Types
1. Private Limited Company Registration
-Requires an AD Code for exports and foreign transactions.
-Must be linked with GSTIN and IEC.
2. OPC Registration
-A One-Person Company (OPC) engaging in import-export must register an AD Code.
-Suitable for single-owned businesses expanding internationally.
3. Section 8 Company (NGOs)
-Non-profits engaged in cross-border donations or trade need an AD Code.
-Help with receiving foreign grants via authorized banking channels.
4. Subsidiary Company
-A subsidiary of an MNC in India must get a unique AD Code for its operations.
-Required for foreign direct investment (FDI) transactions.
Conclusion
AD Code registration is an essential requirement for Indian businesses involved in international trade. Without an AD Code registered on ICEGATE, businesses cannot clear shipments or receive international payments. Whether you have a private limited company, OPC, Section 8 company, or a subsidiary company, obtaining an AD Code is a critical step in global expansion.
By following the step-by-step process of AD Code registration, businesses can unlock import-export opportunities, comply with DGFT regulations, and ensure seamless trade operations.
