Kerala has emerged as a vibrant hub for small businesses, exporters, service providers, and digital entrepreneurs. With growing globalization and e-commerce, many Kerala-based entrepreneurs are venturing into international trade. A common question arises during this phase: “What is the difference between IEC (Import Export Code) and other business registrations like GST, MSME, and Shop & Establishment registration?”
While each registration serves a specific legal or operational purpose, understanding how IEC differs from other mandatory business registrations is crucial. This blog explains these distinctions clearly and helps you decide what your business needs.
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What is IEC (Import Export Code)?
IEC is a 10-digit unique identification number issued by the Directorate General of Foreign Trade (DGFT), Government of India. It is mandatory for businesses engaged in importing or exporting goods or services.
Highlights:
- Mandatory for any business or individual importing or exporting from India
- Issued only once and valid for a lifetime
- No need for renewal unless changes are required
- Essential for customs clearance and foreign remittances
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How IEC Differs from Other Common Business Registrations
1. IEC vs. GST Registration
GST Registration is mandatory for businesses whose annual turnover exceeds the threshold limit (₹20 lakhs for services and ₹40 lakhs for goods in Kerala). It allows you to collect and remit Goods and Services Tax on sales.
| Aspect | IEC | GST |
|---|---|---|
| Authority | DGFT, Ministry of Commerce | Central Board of Indirect Taxes & Customs (CBIC) |
| Purpose | Enable import and export of goods/services | Enable taxation of domestic supply and services |
| Mandatory? | Yes, for import/export | Yes, based on turnover threshold |
| Applies to | Importers, exporters, service exporters | Traders, manufacturers, service providers |
| Renewal | No renewal needed (only annual confirmation) | Requires regular returns filing |
2. IEC vs. MSME (Udyam) Registration
MSME registration is issued by the Ministry of Micro, Small & Medium Enterprises. It classifies enterprises based on investment and turnover, and is used primarily to avail financial and developmental benefits from the government.
- IEC is related to foreign trade operations.
- MSME/Udyam helps you access credit, subsidies, and tenders.
- MSME registration is optional but beneficial; IEC is mandatory for exports/imports.
IEC is not a replacement for MSME; they serve different legal and economic purposes.
3. IEC vs. Shop & Establishment Registration
Shop and Establishment registration is governed by the Kerala Shops and Commercial Establishments Act. It is mandatory for any commercial establishment (shop, office, freelancer setup, or online business) operating in the state.
Key differences:
- IEC is a central registration; Shop & Establishment is a state registration.
- IEC enables trade beyond India’s borders; Shop & Establishment validates your physical or digital presence within Kerala.
- Shop license governs employee working hours, holidays, and labour laws; IEC regulates trade documentation.
Explore Shop Registration: Kerala Shop & Commercial Establishment License
4. IEC vs. FSSAI Registration
If your business deals with food manufacturing, processing, storage, or sales (including export), you also need FSSAI registration from the Food Safety and Standards Authority of India.
In such a case, both IEC and FSSAI become relevant. IEC for export and FSSAI for food safety compliance.
Do You Need IEC if You Already Have Other Registrations?
Yes, if your business involves cross-border transactions (goods or services), you still need IEC—even if you already have GST, MSME, or Shop licenses. Each registration serves a distinct legal and functional purpose.
Here’s a quick checklist for IEC applicability:
- Are you exporting digital services to clients abroad?
- Are you importing raw materials or goods?
- Are you a merchant exporter or Amazon/Flipkart seller exporting products?
- Are you receiving foreign remittances for professional services?
If your answer is YES to any of the above, then IEC is a must.
How to Get IEC in Kerala
The application process is completely online through the DGFT portal. You’ll need a valid PAN, address proof, and a bank certificate. Once submitted, the IEC is usually issued within 1–3 working days.
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- Complete documentation support
- Error-free application and PAN verification
- DGFT portal filing and DSC/e-sign help
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Conclusion
IEC is a unique, standalone registration specifically for cross-border trade. While other business licenses like GST, MSME, and Shop & Establishment registration cater to domestic operations, labour laws, or government schemes, IEC is a gateway to global markets.
If you are planning to expand your business beyond India—or are already receiving foreign payments—it’s critical to get your IEC today. For a smooth, guided registration experience in Kerala, contact Our Tax Partner for expert IEC support.
