Why Is My IEC Application Being Rejected and How Can I Fix It?

An Import Export Code (IEC) is one of the first things you will need to set up when importing or exporting goods in India. If you are a Manufacturer, Trader, Distributor or Startup, having your IEC approved is a key part of starting your global business.

However, your application may not always be accepted. Common errors include incorrect business details, incorrect documents, issues with your PAN and incomplete application.

Don’t panic – most issues can be easily fixed. All you need to do is identify why your application is being rejected and correct it.

In this blog post, we’ll explain why your IEC applications are commonly rejected, how to Fix It, and what to look out for.

1. Why Are IEC Applications Rejected?

The IEC code registration in India is handled by the Directorate General of Foreign Trade (DGFT). Whilst the application is completed online, all details must match your official documents.

A small error in any of your details such as name, PAN or banking information could cause issues.

Common reasons for IEC applications being rejected include:

Pro Tip: Double check your PAN, bank account and registration details before applying.

2. Top 7 Reasons Why IEC Applications Are Rejected and How to Fix Them

1. PAN Mismatch

The PAN is a key detail in your IEC application. If your name or any other details don’t match with those in the PAN database then it could fail verification.

How to Fix:

• Check your PAN number.
• Ensure your legal name matches.
• Correct any discrepancies in your official documents.
• Double check your application.

2. Incorrect Business Name

Some businesses apply using a trade name rather than the correct legal name.

How to Fix: Apply with the correct legal name related to your PAN and business registration.

3. Banking Issues

Incorrect banking details or insufficient proof could cause a delay.

How to Fix:

• Enter the correct account number and IFSC.
• Upload the appropriate banking proof.
• Ensure your account belongs to the eligible applicant.

4. Address Mismatch

If your business address doesn’t match those on your PAN, bank proof and other documents then additional verification may be required.

How to Fix: Check your registered and current business address. Provide acceptable proof of address and update as required.

5. Incorrect Documents Uploaded

You may have uploaded an old, incomplete, or unclear document.

How to Fix: Upload clear scanned documents. Ensure they are in the correct format and size. Don’t use cropped images.

6. Incorrect Constitution

There are different constitutional types for different business structures. Proprietorship, Partnership, LLP and Private Limited Company all have different legal structures. Choosing an incorrect constitution could cause discrepancies.

How to Fix: Choose the correct business type and provide the relevant registration documents.

7. Missing Information or Incorrect Declarations

Sometimes applicants miss filling in mandatory fields, declarations or other details.

How to Fix: Go through all sections and double check. Read the rejection remarks carefully and correct any issues.

3. What Documents Should I Check?

Ensure you have all necessary documents ready before starting your IEC application. The latest DGFT IEC Module User Help File (v4.1) provides details of what documents you need and what verification is required.

Generally, you will need to provide proof of documents in PDF format. They should be under 5MB in size. See the DGFT user manual for more details.

Important Note: If your business is based at a rented location and your proof of address isn’t in your name, ensure you have an owners NOC and proof of address.

4. How to Reapply for IEC

Once you know why your application was rejected, follow these steps:

1. Go to the DGFT Portal: Visit the official site.
2. Log into your account.
3. Check your application status: Look at your rejection remarks to see why.
4. Update any details: Update your PAN, banking, address and/or business details.
5. Prepare your documents: Ensure you have valid, clear documents.
6. Submit your application: Complete the new application or amendment process.
7. Monitor your application through your DGFT dashboard.

Remember, you may need to complete a new application. Follow the instructions provided.

5. Important Update: Electronic Banking Verification via NPCI

An important change to note is electronic banking verification.

Under the new IEC process, your banking details will be verified electronically through NPCI. Ensure your name matches the name of the firm and your details are correct.

According to the DGFT IEC Module User Help File v4.1:

• Banking details are verified electronically.
• Verification may still be in progress whilst waiting for a response from your bank.
• If your bank fails to verify then your application may not be approved.
• Ensure your details are correct.

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It’s important to ensure your account number, IFSC and account holder name are correct.

6. How Bookkeeping Services Can Help With IEC Documentation Errors

Many business owners can get caught up in sales, suppliers and export opportunities and forget about keeping accurate financial records.

This is where Bookkeeping Services come in.

Keeping accurate records will help you keep your business consistent, with all your documents in order. You will also be able to spot any discrepancies.

For example, you may have an up-to-date bank account but have old details on your records. This can cause unnecessary verification issues.

By using professional Bookkeeping Services you can:

• Keep your finances and banking in order.
• Have better documentation.
• Keep your business consistent.
• Make it easier to provide proof of documents.
• Have accurate financial records.

ChennaiAccounts can help with your accounting and documentation so you can keep your records in order.

7. Common Mistakes to Avoid

When completing your application make sure you:

• Don’t put in a trade name. Use the correct legal name.
• Don’t upload unclear documents.
• Don’t use an old address.
• Double check your PAN details.
• Check if there is already an IEC linked to your PAN.
• Ensure you have your registered mobile number and email.
• Don’t ignore any alerts on your DGFT dashboard.
• Double check all details.

This can help you save time and avoid any unnecessary delays.

8. FAQs

1. Why Was My IEC Application Rejected?

Your application may have been rejected due to PAN mismatches, incorrect banking details, incomplete documents, address mismatches or verification failure. Always check your rejection remarks.

2. Can I Reapply If My IEC Application Is Rejected?

Yes. Depending on your application status and reasons for rejection you may need to complete a new application with the correct details and pay a fee.

3. How Long Does It Take to Get IEC Approved?

It depends on your verification and application status. Delays may occur due to banking verification or document issues.

4. Do I Need a Bank Account to Register for IEC?

Yes. You will need a valid bank account in the name of the IEC holder.

5. Can I Apply for IEC Without GST?

IEC and GST are separate registrations. Whether you need a GST depends on your business and GST rules. Don’t assume everyone will need to have a GST.

6. Do I Need to Renew My IEC Every Year?

IEC doesn’t need to be renewed conventionally. However, IEC holders must confirm and update their IEC details every year (April-June) electronically. Even if there are no changes they must still do this.

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7. Can a Small Business/Individual Apply for IEC?

Yes. Eligible individuals, proprietorships, partnerships, LLPs and companies can apply.

Final Thoughts: Get Your IEC Application Right!

Just because your IEC application has been rejected doesn’t mean you can’t enter the international market. Usually it’s a case of incorrect details, mismatched documents and failed verification.

The best option is to find out why your application was rejected and correct it. Follow the latest DGFT guidelines.

Whether you are starting an importing business, exporting or setting up a new company it is just as important to keep accurate business and financial records.

ChennaiAccounts can help with your accounting, bookkeeping and registration documentation. This can help you keep your records in order.

If you are looking to apply for IEC or having issues, ensure you get professional guidance.