Why Import Export Code is Essential for KYC at ShipGlobal.in

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Why AD Code is Essential for KYC at ShipGlobal.in

Table of Content

What is an AD Code
How to Get an AD Code if You Don’t Have One
1. Documents Required
FAQs for AD Code

What is an AD Code

An Authorized Dealer (AD) Code is a 14-digit code provided by your bank, which is registered with the Directorate General of Foreign Trade (DGFT). This code is mandatory for businesses involved in export and import activities, facilitating the realization of export proceeds and enabling customs clearance.

AD code is required for customs clearance, tracking foreign exchange, and ensuring compliance with Reserve Bank of India (RBI) regulations. Whether you’re an established exporter or just starting, understanding and obtaining an AD Code is a must to simplify your export process.

Why Do You Need an AD Code for KYC with ShipGlobal.in

Customs Clearance: AD Codes are required for filing shipment invoices with customs officials. Customs authorities can check the validity of your transactions and assure compliance with export and import rules if they link your shipments to your AD Code.
Financial Transactions: Ensures your export proceeds are received in your bank account.
Compliance: Helps comply with Indian foreign trade regulations, ensuring legal and efficient export operations. Using an AD Code indicates conformance to the legal framework governing international trade. It enables authorities to monitor and control export activity, lowering the danger of money laundering and tax evasion.
Monitoring Foreign Exchange Transactions: The RBI utilises the AD Code to monitor the influx and outflow of foreign exchange linked with export operations. This helps to prevent inconsistencies and guarantees that export revenues are properly credited to your account.

Importance for Exporters

Streamlined Customs Procedures: Registering your AD Code guarantees that your goods pass through customs efficiently and without needless delays.
Mandatory for Exports: Essential for completing export customs procedures.
Facilitates Transactions: Ensures smooth financial transactions related to export proceeds.
Efficiency: Simplifies the process of setting up your account and starting your export journey with ShipGlobal.in.
Credibility among Stakeholders: An active AD Code demonstrates your dedication to compliance, instilling trust in overseas buyers and partners.

How to Use Your AD Code for KYC

Log into ShipGlobal.in: Access your account and go to the KYC section.
Upload AD Code: Upload a clear photo or scan of your AD Code registration letter from your bank.
Verification: Our team will verify your details.

Tips for a Smooth KYC Process

Clear Image: Ensure the photo or scan of your AD Code document is clear and readable.
Match Details: Ensure the business name on your AD Code matches the information on your ShipGlobal.in account.

How to Get an AD Code if You Don’t Have One

Steps to Apply for an AD Code

Contact Your Bank
Go to the branch where you hold your current account.

Inform the bank officials that you need an AD Code for your export activities.
Submit Required Documents
Fill out the AD Code application form provided by the bank.

Submit the necessary documents such as your IEC (Import Export Code) certificate, GST registration certificate, PAN card, and address proof.

The bank will verify your details and process your request.
Receive Your AD Code
The issuance of the AD Code usually takes a few working days.

Once processed, the bank will provide you with an AD Code registration letter.
Register AD Code with Customs
Go to the official DGFT website (dgft.gov.in).

Follow the procedure to register your AD Code with customs, enabling you to use it for export activities.

Documents Required

IEC Certificate: Copy of your Import Export Code certificate.
PAN Card: Copy of the PAN card of the business owner or the business entity.
GST Registration Certificate: Proof of GST registration.
Address Proof: Utility bills (electricity, water), rent agreement, or bank statement.
Bank Account Details: Proof of bank account in the name of the business entity.

Start your export journey smoothly with ShipGlobal.in by completing your KYC with your AD Code today!

FAQs for AD Code

What is an AD Code, and why is it necessary for exporters?

An AD Code (Authorized Dealer Code) is a 14-digit number assigned by an RBI-authorized bank. It is essential for exporters as it enables customs clearance, ensures compliance with trade regulations, and facilitates the receipt of export payments.

Do exporters need an AD Code to conduct business?

Yes, an AD Code is required to file shipping bills with customs authorities. Without it, export shipments cannot be cleared, and banks cannot process payments in foreign currency.

What steps do I need to follow to get an AD Code?

To apply for an AD Code:
Select an Authorized Dealer Bank.
Provide the required documents, including your Import Export Code (IEC), PAN, and bank account details.
Once verified, the bank will issue the AD Code, typically within a few working days.

What are the documents required to apply for an AD Code?

You will need to submit the following:
IEC certificate.
PAN card of your business.
Proof of a current business bank account.
Business address verification documents such as a utility bill or GST certificate.

Why do I need to register my AD Code with customs?

After obtaining the AD Code, it must be registered with customs through the DGFT platform to associate the code with your shipping bills. This step is crucial for initiating export shipments.

Can I use the same AD Code for multiple shipments?

Yes, the AD Code is linked to your business and can be used across all export shipments. If you export goods from different ports, you may need to register the AD Code at each port individually.

What are the consequences of not having an AD Code?

Without an AD Code, you may face issues such as:
Inability to clear goods through customs.
Problems receiving export payments.
Potential penalties for non-compliance with export regulations.

Can I update my AD Code if I switch banks?

Yes, if you change your bank, you can apply for a new AD Code from the new bank and update it with customs authorities to ensure smooth export operations.

Is there a cost involved in obtaining an AD Code?

Banks may charge a nominal fee for issuing an AD Code. The charges vary depending on the bank, so it’s best to check directly with your bank.

Is an AD Code required for importing goods?

No, an AD Code is only applicable to export transactions. Import activities require other documents like a Bill of Entry, but the AD Code is not mandatory.

Can I obtain an AD Code without an Import Export Code (IEC)?

No, having an IEC is a prerequisite for getting an AD Code. The IEC is issued by DGFT and is mandatory for businesses involved in international trade.

Do I need to renew or update my AD Code periodically?

AD Code itself does not expire. However, if there are changes in your business details, such as address or bank account, you need to inform the bank and update the AD Code with customs.