Think of a marketplace where vibrant trade flows, connecting continents and cultures—welcome to India, a thriving global hub for goods and services. Thanks to the ease of doing business online, thousands of sellers are exporting from India, accessing multinational markets and increasing their customer base through digital connectivity.
However, the first step to launching a successful export business from India is obtaining important documents and complying with regulations. These requirements include obtaining an AD Code Certificate (Authorized Dealer Code) for steering customs procedures in international trade, without which cross-border business is nearly impossible. So are you ready to expand your business around the world?
In this blog, we’ll delve deeper into aspects of how to apply and register for an AD code and how it plays a crucial role in customs clearance for Indian exports. But first, let’s get a clearer picture of what exactly an AD Code is:
What is an AD Code?
An AD Code (Authorized Dealer Code) is a unique 14-digit code issued by banks authorized by the Reserve Bank of India (RBI) to facilitate export transactions. The AD code certificate is essential for any exporter in India as it links their transactions to a specific bank account, helping to streamline international payments and customs processes. This code ensures that all international trade payments are processed through legitimate banking channels, maintaining transparency and adherence to government regulations. Exporters obtain it after registering for an IEC (Import Export Code), making it essential for export customs clearance.
To streamline this process and manage your international transactions effortlessly, consider a reliable payment solution like PayGlocal.
Also read: Applying for IEC (Import Export Code)
So you got the gist of what an AD Code is, let's explore further why having an AD Code certificate is important for any export business:
Importance of AD Code Certificate in International Transactions
Simplifies Customs Clearance
Customs clearance is a must for any export or import. An AD Code ties your shipment to a valid bank account authorized for foreign exchange. The bank generates the shipping bill, the main document required for exporting goods.
Complies with Foreign Exchange Rules
An AD Code links your transactions to a bank, so every rupee that goes across the border complies with RBI and customs rules. Non-compliance can lead to delayed shipments and legal problems.
Export Incentives
An AD Code is required to comply with documentation that might be necessary to access various government schemes to incentivize exports. These benefits include duty exemptions, reduced customs duties, and rebates, which reduce the financial burden on exporters.
Seamless Financial Transactions
Cross-border transactions involve numerous regulations, exchange rates, and banking processes. The AD Code facilitates secure and hassle-free payments through authorized banks and ensures that international trade-related financial transactions are smooth, secure, and within the legal framework. Without it, international financial transactions can be very complex and risky.
If navigating these complexities feels daunting, using a robust payment platform like PayGlocal can simplify international payments, ensuring secure and compliant transactions.
Also read: Understanding Import-Export Codes (IEC) for Indian Exporters.
Having realized how important an AD code is to exports, let’s take a closer look at the perks of having your business registered with an AD Code certificate:
Benefits of having an AD Code Certificate
Faster Customs Processing
Registering your AD Code ensures faster and more efficient customs clearance for your export and import operations. Without it, shipments can face unnecessary delays, leading to increased costs and missed deadlines. By streamlining the customs process, the AD Code helps your products move in and out of the country with minimal friction, giving you a competitive edge in meeting international timelines. This quick turnaround is vital for maintaining customer satisfaction and growing your global business.
Regulatory Compliance
An AD Code is not just a formal requirement—it plays a critical role in helping your business meet international trade and financial regulations. It acts as a safeguard, ensuring that all your export transactions adhere to foreign exchange policies set by the Reserve Bank of India (RBI) and customs authorities. Staying compliant with these regulations minimizes the risk of legal issues and penalties, allowing you to focus on growing your business without the worry of regulatory setbacks.
Access to Export Incentives
An AD Code is part of the compliance steps required to qualify for government-provided export incentives designed to boost your profitability. These incentives include duty drawbacks, tax exemptions, and financial benefits aimed at promoting exports. Without an AD Code, businesses miss out on these lucrative perks, which can significantly reduce costs and increase margins. By registering your AD Code, you're positioning your business to take full advantage of these opportunities, making your exports more cost-effective and competitive on the global stage.
Ensures Timely Payment Release and ICEGATE Registration
Having an AD Code is crucial for ensuring the timely release of export payments. Without it, the payment process can be delayed as banks cannot process international transactions through authorized channels. Exporters also need the AD Code for registering with the ICEGATE portal, a requirement for customs clearance at Indian ports.
Partnering with solutions like PayGlocal can ensure that your payment processes align with your AD Code registration for smoother operations.
Also read: Choosing the Right Payment Gateway
Having learnt about the benefits of an AD Code certificate, here’s a list of documents you need to have on hand for your registration process:
Documents Required for AD Code Certificate Registration
For a seamless experience, digital platforms such as PayGlocal can assist in managing your documentation effectively, complementing your AD Code registration process. Just make sure to gather all these checklist items without fail:
| Document | Description |
|---|---|
| AD Code Letter | Issued by the exporter’s bank, this document contains the 14-digit AD Code, which must be registered with customs at the relevant port. |
| Bank Certificate | A certificate from the bank verifying that the exporter holds a valid account is essential for processing export payments and transactions. |
| Authorized Signature and Bank Seal | A copy of the bank official’s authorized signature to issue the AD Code, typically accompanied by the bank’s seal. |
| Company’s PAN Card | A copy of the exporter’s PAN card is used to verify the entity’s identity in the export transaction. |
| Import-Export Code (IEC) | Issued by the Director General of Foreign Trade (DGFT), this code is mandatory for all exporters. |
| GSTIN Registration Certificate | A copy of the GSTIN certificate, confirming that the exporter is registered for goods and services tax purposes. |
Also read: Impact of GST on Export of Services in India
With all the necessary documents ready, let’s walk through the step-by-step process of registering your AD Code with a bank:
How to Register AD Code with a Bank?
Under the governance of the Central Board of Indirect Taxes and Customs(CBIC), the Indian Customs Electronic Gateway(ICEGATE) facilitates the application process for an AD Code Certificate to ensure smooth Indian exports for global traders. Here is a step-by-step guide to apply for the AD Code:
-> Open a Current Account with an Authorized Dealer Bank
Before anything else, you’ll need a current account with an authorized bank that handles foreign exchange. You cannot obtain an AD Code without this account.
-> Gather Required Documentation
Make sure you have the following documents ready:
- AD Code letter
- Bank certificate as per Customs Public Notice No. 93/2020
- Copy of company PAN card (sealed and signed)
- Copy of GST certificate (sealed and signed)
- Copy of IEC certificate (sealed and signed)
- Your company’s cancelled cheque
- Class 3 Digital Signature Certificate (DSC)
- Director/Proprietor/Partner's ID (PAN, Voter ID, Aadhaar, Passport)
- Export House Certificate (optional)
-> Submit a Written Application
Next, write a formal request to your bank (as per the format shared by your bank) for issuing an AD Code. This should outline the need for the AD Code in your export-import activities.
-> Verification by the Bank
After receiving your application and documents, the bank will verify your details and, upon satisfaction, issue the AD Code on official letterhead in the Directorate General of Foreign Trade format.
-> Complete Registration on the ICEGATE Portal
Once you receive the AD Code letter, you will need to complete the registration process on the ICEGATE portal, the official Indian Customs website.
Now that you figured out where to apply for an AD Code Certificate, let’s dive in and make this process a breeze for you:
AD Code Registration Process on ICEGATE Portal
After receiving your AD Code, register it with the ICEGATE (Indian Customs and Central Excise Electronic Commerce/Electronic Data Interchange Gateway) portal for customs clearance. Here’s a breakdown:
-> ICEGATE Login
Image Source: Indian Customs National Trade Portal
Visit the ICEGATE website and log in with your existing credentials.
-> Bank Account Management
On the left panel, click on Bank Account Management.
-> AD Code Registration
On the Export Promotion Bank Account Management page, choose Authorized Dealer Code Registration.
-> Document uploads via e-Sanchit
In the left panel, select e-Sanchit. This will take you to the document upload page. Ensure all required documents are digitally signed and conform to the prescribed format.
Here’s the list of documents to be uploaded:
- AD Code authorization letter from the bank (original and country or bank-specific)
- Letter from the exporter requesting the AD code registration
- Letter from the customs broker applying for AD code registration
- GST registration (copy)
- Import-Export Code (IEC) (copy)
- PAN (copy)
- Income tax returns for the last three years (copy)
- Bank statement or balance sheet from the previous year
- Export House Certificate (if applicable)
- Manufacturing Licence (if applicable)
- PAN, Aadhaar, Voter ID/Passport and IT declarations of the export partner
- PAN, Aadhaar and Voter ID/Passport of the signatory
After uploading the necessary documents, an Image Reference Number (IRN) and Document Reference Number (DRN) will be generated.
-> Add Bank Account Details
Return to the Authorized Dealer Code Registration page. Click ‘add new account’ on the dashboard and enter the required details, including your IRN, bank details and port location code.
-> Submit and Verify OTP
If your inputs are valid, you will receive a six-digit OTP on your email and mobile. Enter the OTP to complete your registration request.
-> Customs Review
Your request will now be sent to customs for approval. You can track the status of your request on the Authorized Dealer Code Registration dashboard by clicking on the status icon.
-> View Registered AD Code
Once approved, your registered AD Code and bank details will be visible on the dashboard. You can repeat this process to add more AD Codes, accounts, or locations as needed.
Also read: Unraveling the Significance of Bank Realization Certificate(BRC) for Indian Exporters.
With all the benefits and insights listed for a smooth AD code registration process, let's wrap this up with a recap of the key takeaways covered so far:
Conclusion
In a nutshell, the gateway to the secret world of international shipping is like receiving a passport—except this one has 14 digits! By familiarizing yourself with the AD Code registration process through this blog, you're setting the foundation for efficient exports. An AD code registration facilitates smoother customs clearance, ensures your exports are compliant with foreign exchange laws, and opens doors to valuable export incentives that can boost your business's growth. Beyond this registration, businesses must stay updated on evolving regulations, cultivate relationships with reliable trade partners, and invest in market research to stay competitive. So, are you ready to take full advantage of the global opportunities that come next?
Just as ensuring smooth customs clearance with an AD Code is essential for avoiding shipment delays, having a strong payment partner like PayGlocal can secure and optimize your international transactions concurrently! Take the leap and make your global transactions seamless with PayGlocal— we offer you multi-currency accounts with a dynamic checkout and a seamless process for managing card payments and recurring payments effortlessly all from one platform. Enjoy fraud-detection technology and built-in sanction screening to secure your cross-border commerce with global payment methods. Visit PayGlocal today!
FAQs
1. What is the Validity of the AD Code?
The AD Code remains valid with the customs port as long as the exporter regularly updates any changes and maintains compliance with customs requirements.
2. Is there a fee for AD Code Registration?
As an exporter from India, you can complete the AD Code registration directly on the ICEGATE portal without paying any fees.
3. Can you modify an existing AD Code?
Yes, you can. You will need to submit a formal request to re-register the AD Code with the new details through the ICEGATE portal.
4. Who needs to obtain an AD Code?
Any entity engaging in international trade in India, particularly exports, must obtain an AD Code for compliance with customs regulations and to facilitate international payments.
