What is AD Code Registration and how to do it?

Ad Code Registration 

Ad Code Registration is a vital compliance requirement in India for businesses and individuals engaged in foreign exchange transactions. This registration system is regulated by the Reserve Bank of India (RBI) and is crucial for monitoring and controlling cross-border financial activities.

Key Information:

1. What is an Ad Code?

   An Authorized Dealer (AD) Code is a unique identification number assigned to entities, including businesses and individuals, by authorized banks in India. This code is necessary for all foreign exchange transactions, including sending or receiving money from abroad.

2. Why is Ad Code Registration Important?

   Ad Code Registration is essential for the following reasons:

   – Ensures compliance with RBI regulations.

   – Facilitates tracking of foreign exchange transactions.

   – Allows seamless import and export of goods and services.

   – Enables individuals to receive foreign remittances legally.

3. Who Needs Ad Code Registration?

   Any entity or individual involved in international trade, including importers, exporters, businesses receiving foreign investments, and individuals receiving foreign remittances, must obtain an Ad Code.

4. The Registration Process:

   The Ad Code Registration process involves the following steps:

   – Selecting an authorized bank.

   – Submitting the required documents, including a valid Permanent Account Number (PAN) and Know Your Customer (KYC) details.

   – Completing the application form.

   – Verifying the application by the bank.

   – Receiving the Ad Code from the bank.

5. Compliance and Reporting:

   Ad Code holders are required to adhere to RBI guidelines and report foreign exchange transactions regularly. Non-compliance can lead to penalties and legal consequences.

6. RASP International’s Role:

   RASP International offers expert assistance in the Ad Code Registration process. Our experienced professionals guide clients through the application process, ensuring accuracy and compliance. We simplify the process, saving valuable time and resources.

7. Benefits of Choosing RASP International:

   – Expert guidance and support.

   – Time and resource savings.

   – Tailored solutions to meet unique client needs.

   – Ongoing assistance with compliance and reporting.

• Proven Track Record: We have a track record of successfully assisting numerous businesses and individuals in Ad Code Registration, enabling them to conduct their international transactions with confidence.

• Compliance Assurance: We stay updated with the latest regulatory changes, ensuring your Ad Code remains valid and compliant with evolving Indian regulations.

Conclusion:

Ad Code Registration is a crucial aspect of conducting international transactions in India. It ensures compliance with RBI regulations and enables businesses and individuals to engage in cross-border activities legally and smoothly. For expert assistance with Ad Code Registration, consider partnering with RASP International.

Contact Us:

If you have questions or require assistance with Ad Code Registration in India, please contact us for guidance and support. We’re here to simplify the process and help you meet your compliance obligations effectively.

For starting any business of Import and Export in India, one must have two Registrations as per the Indian Government, out of which one is IEC (Import-Export Code) and another one is AD (Authorised Dealer) Code Registration.

AD Code is a 14-digit number issued for the customs clearance of the goods. This AD Code aims to ensure that the foreign currency used for transactions in an exporter’s current account comes from a legal channel.

AD Code is provided by the bank where he holds the business or current account. AD Code is printed on the bank’s letterhead in the set format as prescribed by the Directorate General of Foreign Trade (DGFT). The bank which is authorized to grant AD Code must deal with foreign currency. Registering an AD Code at the port where goods are sent for customs clearance is mandatory. Without port registration of the AD Code, the shipping bill number will not be generated, which is a must for the export of goods.

On 14 June 2022, the Directorate General of Systems and Data Management issued new changes made in respect of the AD Code. The new changes are as follows:

• AD Code with an associated bank account is now required to register in the system at only one port rather than registering at every port, and thereafter the AD Code is made available at all customs locations. The same is required to register online at ICEGATE. Earlier, an AD Code was required for each port separately for custom clearance of export or import of goods. 
• Once an AD Code is registered against an Import-Export Code at any port, then the same can be used for all ports. And there is no requirement for separate registration at other ports for filing of documents.
• Any change or amendment in a particular AD Code account details is to be done at that port of registration only; the post selected by the Import Export Code (IEC) at the time of making the application for registration.

• Multiple AD Codes and associated accounts can be registered against an Import-Export Code (IEC). All multiple AD Codes must register in the system at any of the ports. There can be different ports of registration for different AD Codes.
• For existing AD Codes and associated accounts registered for an IEC, the customs port where the last shipping bill with a specific AD Code is filed is deemed a port of registration for that AD Code in the system.
• The details of the port of registration for each registered AD Code against an IEC are made available on the ICEGATE.

Benefits of AD Code

The following are the various benefits of obtaining an AD Code:

• It assists in developing business and reaching out to a bigger market at the global level. It allows the business to flourish at a rapid pace. 
• Obtaining an AD Code is a one-time process. It means there is no requirement to submit any returns.
• The AD Code is valid till the existence of the business of its holder. So, there is no requirement to renew it. 
• Based on the AD Code, businesses receive multiple incentives for their imports or exports from the Directorate General of Foreign Trade, Export Promotion Council, Customs, and several other Government Departments.
• It is one of the crucial documents to be submitted for export customs clearance. Without it, one cannot produce a shipping bill on ICEGATE, the Indian Customs Electronic Data Exchange Platform. 
• AD Code allows transferring credit to the trader’s current account directly.
• Any Government advantages one wishes to avail of are credited straight to his current account if he has an AD Code registered custom. 

Documents Required to Obtain AD Code

Following are the documents that are required to be submitted while obtaining the AD Code:

• Original AD Code Authorisation letter of the bank
• Exporter’s letter on the letterhead requesting or authorizing the registration of AD Code
• Customs broker’s letter on the letterhead requesting AD Code Registration
• GST Registration Certificate
• Recent IT returns
• Copies of bank proclamation 
• Import-Export Code License
• PAN Card of the company
• Export House Certificate 
• Manufacturing License
• Identity proofs of the owner/partner, such as an Aadhar Card, PAN Card, Voter ID Card, or Passport

Procedure to Obtain AD Code

One has to request their bank for the grant of information on the AD Code of the bank. Once the bank gets the letter of request, then it provides the information in writing. Such a letter must contain information about the applicant’s organization or business and the export transaction. The complete procedure for obtaining the AD Code is as follows:

• The applicant needs to have a current account in a bank that deals in foreign exchange.
• An application to the Branch Manager of the bank where the applicant has the current bank account is made by the applicant in the prescribed format.
• The bank issues a 14-digit AD Code on its letterhead as per the prescribed standard by the Directorate General of Foreign Trade (DGFT).
• After obtaining the AD Code from the bank, the applicant registers it with the port from where the goods are to be exported/imported. Nowadays, it is also done through the Indian Custom Electronic Gateway, ICEGATE.
• An ID is created at the ICEGATE portal using organisational-based class 3 DSC.
• All required documents are collected, and an application is filed at the customs house.
• Once all the necessary documents are submitted, including information related to the exporter and shipping of consignment, then the Registration of the AD Code is done.