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Trade Advice

Features of AD Code

15/11/2021 2 Min Read

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Businesses that want to import or export goods are required to obtain an IEC (Import Export Code) from the Directorate General of Foreign Trade. To faciliate the transaction, these businesses would be remitting or receiving foreign currency and hence, they must have an Authorized Dealer Code (AD code). This is a fourteen-digit numerical code that is provided by the bank with which your business has a current account. The bank provides the AD Code, and the same must be registered with customs. Its purpose is to highlight the fact that foreign currency transactions in your bank account are by trading goods legally and not through any illegal activity.

At every port where your goods are cleared by customs officials, you would be required to register your AD Code. If you avail the services of a Custom House Agent (CHA), then you will have to provide the CHA with your AD Code for the port where your goods are undergoing custom clearance.

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For example, if an exporter wishes to export your consignment from Nhava Sheva Port, Maharashtra, then the exporter would have to register the AD code at Nhava Sheva Custom port.

Without an AD Code Registration, the Electronic Data Interchange (EDI) system, which is a part of the ICEGATE Portal (Customs National Trade Portal) will not allow the shipping bill number to be generated. The shipping bill number is mandatory for customs clearance, and an AD Code is required to receive government benefits directly into your business’s current account.

To register AD Code at customs, the following documents need to be submitted:

AD Code specified on the letterhead of the bank Copy of the IEC (Import Export Code) Copy of the PAN Card Export House Certificate (which is optional)

Why Exporter Needs AD code

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Avani Ghangurde

Senior Associate Communications at Drip Capital

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