• AD Code and its importance in Export I Export Procedure

    AD Code

    An Authorised Dealer Code (AD Code) is a 14-digit numerical code provided by a bank with which your business has a current account. You will need to register an AD Code at every port from where your goods are cleared by customs. At the time of customs clearance, your Customs House Agent (CHA) will ask you to provide the AD Code for that particular port.

    Importance of AD Code in Exports

    A registered AD Code is essential for customs clearance. If you do not have one, you will not be able to generate your shipping bill number, which is compulsory for customs clearance. The EDI system of the IceGate portal will not allow the generation of the shipping bill in the absence of a registered AD Code.

    If you are eligible for government benefits, an AD Code registration with the customs enables you to get the same directly credited into your current account. Therefore, you should register for the AD Code at your customs port(s) once you obtain your Import Export Code.

    Also Read : What is a Shipping Bill & How Is It Generated

    Apply for AD Code

    As mentioned, you will need to register your AD Code with every port from which you intend to export your goods. For example, if you are an exporter from Gujarat, you will need separate AD Codes if you want to clear customs from both Mundra and Ankleshwar.

    To obtain an AD Code, you will have to write a letter to the bank requesting it to issue the same against your business’s account. You will have to address this request to the branch manager in the prescribed format. The bank will then issue a 14-digit AD Code on its letterhead in the format prescribed by the Directorate General of Foreign Trade (DGFT).

    If you are an exporter applying for an AD Code, you could follow the format below:

    AD

    Format of bank’s AD Code letter:

    AD1

    After the bank issues you an AD Code, you will need to register it with the customs. To do this, you will have to approach the CHA, and furnish the following documents:

    • The AD Code registration authority letter issued by your banker

    • Self-attested copies of:

      1. GST registration
      2. Last three years’ IT returns of the company or self and partner’s
      3. Bank statement, generally for the last 12 months
      4. Company's Import-Export (IE) Code
      5. Company’s PAN
      6. Board resolution
      7. Partner’s PAN, Aadhaar card, and voter ID/passport
      8. Signatory PAN, Aadhaar card and voter ID/passport, along with originals
      9. Export House Certificate (optional)

    These requirements may vary with a change in statutes. The CHA will receive all the documents from you and submit it to the customs on your behalf. This usually takes about 3–4 working days.

    While filing for export, if the shipping bill gets generated in the Electronic Data Interchange (EDI) system, it means your AD Code has been registered. Please note that this AD Code has to be registered at every port from where you wish to clear customs and export your goods. Once you register your AD Code at a particular port, the registration has lifetime validity.

    Also Read : Pro forma Invoice v/s Commercial Invoice

    Making changes to the AD Code

    If you wish to make any changes to the AD Code, you will have to prepare a set of documents required at the time of AD Code registration, along with the following:

    • A letter mentioning the reason for changing the AD Code or canceling a previously registered AD Code

    • The email ID of the bank branch for any further verification With these documents, you will have to approach and consult the EDI helpdesk. Thereafter, a new AD Code will be generated against your name.

    You can apply for an AD Code from the bank where you have your current account only once. But if your bank account changes, you will have to register your AD Code again to continue generating a shipping bill number. In other words, you will have to generate a fresh AD Code. Further, if you are changing the port of shipment, you will have to register the AD Code again with the customs.

    The AD Code is a necessary document, irrespective of the size of your business or the type of entity. Without it, you cannot export your goods to other countries. So, you must get your AD Code from your bank and register it with the customs department.

    Also Read : How to Choose the Right Freight Forwarder

    Raghav Khajuria
    Raghav Khajuria
    Leads Marketing activities for Drip Capital.
    4 min read