If you are planning to enter the world of international trade, it is something that you will first have to know about—the IEC code impacting your tax liability. IEC (Import Export Code) code is an important requirement in India and mandatory for every business importing and exporting goods. One can simply not export those commodities without such a code. Now if you do possess such a code, then what all it does towards your tax liability. Let's break this down.

What is the IEC Code?

This is a 10-digit unique identification number issued under the DGFT that is headquartered at the Ministry of Commerce, Government of India. Now, once IEC code registration gets over then your business is ready to do import-export work but not end there. The IEC also plays a very crucial role in deciding the tax liabilities.

IEC Code and Its Impact on Tax Liabilities

The moment you receive an IEC code, your business is automatically exposed to a whole host of tax laws that will comprise GST and customs duty. Let's see how this works out.

GST And Import Export Transactions

So, every time you import any goods to India, IGST is levied according to the IGST structure. Every time your goods reach India, you are liable for paying IGST along with applicable customs duty.

Exports: GST is zero rated: For exports, the GST is zero rated. This means you do not have to levy any tax on your exported goods but at your own choice you could make a refund on account of taxes incurred on the inputs that you used to produce the exported goods. This process is rather a long one and professional management by a Gst Tax Consultant in Chennai can sort this out easily for one.

Duties at Custom

Exporters also have to pay customs duty and GST. The customs duty varies for goods depending on their value, countries of origin, and other classifications. It is rather essential to seek professional guidance in such issues. You may also suffer a penalty in case of timely clearing of customs duties, thus you need to hire the services of Income Tax Filing Agents in Chennai or accountants who will help you deal with all these matters in proper ways.

Income Tax and Overseas Transactions

Exporters and importers are equally interested in income taxes. All the incomes which are earned through international trade become a part of your income that is taxable, and hence, it needs to be accounted for while filing your income tax returns. It is an imperative while making a proper filing so that there is no legal complication while transacting with professionals in respect to tax concerns would make things relatively easier.

Benefits from Having an IEC Code

Availability to the International Market
An Import Export Code Registration will open global markets to your firm whereby you can source raw materials or sell your products from the other parts of the world.

Tax Refunds on Exports
One of the benefits of zero-rated GST on exports is that one can claim GST refunds with an IEC code.

Legals
It will make your company lawfully legitimate regarding its permission for importing and exporting goods, so no kind of punishment or legal charges will prevail against the company.

Tax Trouble Without IEC Code

Executing an import-export business without an IEC code draws along a host of serious problems. Apart from hefty fines, your goods can be seized by the customs. You can't avail GST rebates on the export, making yourself face losses in profit margins as well.

International transactions would be smoother and uncomplicated, and all your tax obligations would be met with qualified Income Tax Filing Agents in Chennai. They offer you a full solution, from GST to income tax filing, to keep your finances in order.

Conclusion

The IEC code is one among the important aspects involved in forming your import-export tax obligations. From collection of customs duties and GST on imported goods to claiming GST refunds on exports, the IEC makes sure that every tax rule is followed. If international trade taxes other than the export GST refund have had you in a paralyzed limbo, we're here to help—Chennai Accounts. Thus, IEC code registration, assistance of the Income Tax Filing Agents In Chennai, and guidance from Gst Tax Consultant In Chennai make it all easy for you.

Be it an emerging import-export business or any tax-related problem, we at Chennai Accounts are there to help you out!