Documents Required for Authorized Dealer Code (AD Code) Registration

Starting a business in international trade is like preparing for a long journey. Just as you need a passport to board a plane, your business needs an Authorized Dealer (AD) code to cross international borders. It’s an essential element for exporters and importers who want to move goods outside India legally and smoothly. To get this unique code, you need to submit a set of specific documents. In this article, we’ll walk you through all the important documents required for AD code registration and explain their role in the process.

What is an AD Code?

An AD Code, short for Authorized Dealer Code, is a 14-digit number issued by the bank where the exporter maintains their business account. It is used by customs authorities and banks to track and regulate foreign currency transactions. Without an AD code, you cannot generate a shipping bill, which means your goods cannot leave the country. This code helps verify that the exporter is registered with a bank authorized by the Reserve Bank of India (RBI) to deal in foreign exchange. It ensures that transactions are secure, legal, and traceable.

Why is AD Code Important in International Trade?

The AD code acts as a digital identity for businesses involved in global trade. Here’s why it plays a critical role:

1. Foreign Exchange Monitoring

The AD code helps in monitoring all foreign exchange transactions. Whether you are receiving money from an international buyer or making a payment abroad, the AD code ensures that the entire transaction is recorded and traced.

2. Customs Clearance

No export shipment can be cleared at customs without mentioning the AD code in the shipping bill. Customs officers use this code to verify your financial credentials and eligibility for cross-border trade.

3. Compliance with FEMA and RBI

The Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) guidelines make it compulsory for exporters to route their export earnings through an authorized dealer. This code establishes that link.

4. Smooth Processing of Export Incentives

When you apply for export incentives like duty drawback or MEIS/SEIS under the Foreign Trade Policy, having a valid AD code ensures quicker processing and approval of such claims.

Purpose of AD Code in Trade Documentation

Think of the AD code as your business’s key that unlocks international markets. It confirms that your business has a relationship with a bank authorized to handle foreign currency and assures customs that you’re compliant with trade rules.

Here are some specific purposes:

• It links your bank to ICEGATE (Indian Customs Electronic Gateway).

• Ensures traceability of foreign currency inflows and outflows.

• Allows you to generate shipping bills at customs.

• Helps track goods exported through different Indian ports.

• Avoids delays at ports due to lack of compliance.

Documents Required for AD Code Registration

Let’s now look at the most important part: the documents required for AD code registration. You must prepare and collect these documents in advance to avoid delays or rejections.

1. Bank Authorization Letter

This is a formal letter from your bank confirming that your account is maintained with them and that they are authorized by the RBI to handle foreign exchange. This letter also contains your bank’s IFSC code and the proposed AD code.

2. AD Code Authorization Letters by Bank, Exporter, and Customs Broker

There are three parties involved – your bank, your business, and your customs broker. Each must issue a letter confirming their consent and involvement in the AD code registration process.

• Bank Letter: A declaration by the bank issuing the AD code.

• Exporter’s Letter: A self-declaration confirming the exporter’s intent to register the code.

• Customs Broker’s Letter: If you are hiring a CHA (Customs House Agent), they must issue a letter confirming that they are authorized to carry out the registration process on your behalf.

3. GST Registration Certificate

You need to submit your GST Registration Certificate as proof that your business is registered under the Goods and Services Tax regime in India. This document confirms that you are operating a legitimate business with a registered GST number.

4. Import-Export Code (IEC)

Issued by the Director General of Foreign Trade (DGFT), the Import Export Code is a 10-digit number that is mandatory for any business involved in importing or exporting goods. Without an IEC, you cannot apply for an AD code.

5. PAN Card of the Company or Entity

You need to submit a copy of your company’s Permanent Account Number (PAN) card. This document is used to verify your business’s tax identity.

6. PAN Card of Authorized Signatory

If the person handling the registration process is different from the owner, such as a director or authorized employee, their PAN card copy must also be provided.

7. Export House Certificate and Manufacturing License (if applicable)

If your business is recognized as an export house or a manufacturer-exporter, you must submit the relevant certificates. These documents add credibility to your business and may be necessary depending on your product type or export status.

8. Identification Documents of Directors or Partners

You need to provide identity proof such as Aadhar Card, Passport, or Voter ID of all the directors or partners associated with your company. This helps verify who is behind the business.

9. Canceled Cheque

A canceled cheque with the company’s name printed on it confirms the business’s active bank account details and is often used for verification purposes.

10. Board Resolution (For Companies)

If your company is a private limited company or public limited company, a board resolution is required. It should confirm that the board of directors has approved the decision to apply for AD code registration and authorizes a specific individual to carry out the process.

11. Application Form for AD Code Registration

You must fill out the official application form provided either by the customs portal (ICEGATE) or your bank. This form requires all details about your business, including name, address, IEC number, port location, and authorized signatory.

12. Class 3 Digital Signature Certificate (DSC)

A Class 3 Digital Signature Certificate is mandatory for all transactions and filings done through ICEGATE. It ensures authenticity and security while submitting your documents electronically.

These documents collectively form the backbone of your application. Missing any one of them may result in delays or even rejection.

AD Code Registration on ICEGATE

After collecting all the documents required for AD code registration, you must proceed to register your AD code on the ICEGATE portal – India’s customs clearance system.

Here is a step-by-step guide:

Step 1: Visit the ICEGATE Website

Go to www.icegate.gov.in – the official website for customs registration.

Step 2: Create an Account or Log In

If you are a first-time user, you must register using your PAN and IEC details. Existing users can simply log in.

Step 3: Go to AD Code Registration

After logging in, find the AD code registration option in the menu.

Step 4: Fill Out the Application

Enter your business details, IEC, port location, and bank account information. Be very accurate with these details.

Step 5: Upload the Required Documents

Now upload all the documents required AD code registration as listed above. Ensure the documents are clear, correctly named, and scanned properly.

Step 6: Submit and Verify with OTP

After uploading, submit your application. An OTP (One-Time Password) will be sent to your registered email or mobile number. Enter the OTP to complete the verification.

Step 7: Get Confirmation

Once your documents are verified by the customs officer, you will receive confirmation. This means your AD code is now successfully registered with customs for that port.

Unique AD Code for Each Port

One important point to remember is that you need to register the AD code for each port separately where you intend to export or import goods. This is necessary because different ports handle different cargo, and customs need to verify the AD code at every entry or exit point.

So, if you are planning to ship from Mumbai, Chennai, and Mundra, you need to register your AD code for all three ports individually.

Why You Should Not Delay AD Code Registration?

Delaying AD code registration can lead to:

• Export delays at ports

• Inability to generate shipping bills

• Penalty due to non-compliance

• Missed international orders

By keeping all documents required for AD code registration ready and applying through the ICEGATE portal, you save time, effort, and money. Moreover, your business operations remain compliant and efficient.

Conclusion

Getting your AD code registered is not a complicated process once you understand what is needed. The documents required AD code registration may seem like a long list, but each serves a specific purpose – from identity verification to bank authorization and business legitimacy. With the right preparation, you can complete this process smoothly and begin your international trade journey with confidence.

If you want to get AD Code Registration then you can connect with Compliance Calendar experts through mail info@ccoffice.in or Call/Whatsapp at +91 9988424211.

Frequently Asked Questions (FAQs)

Q1. What is an Authorized Dealer Code (AD Code)?

Ans. An AD Code is a unique numerical identifier, typically 14-digits (sometimes 8), issued by banks authorized by the Reserve Bank of India (RBI). It's essential for businesses conducting import and export activities, serving as official identification for customs and banking authorities in foreign currency transactions.

Q2. Why is AD Code registration important for businesses involved in international trade?

Ans. AD Code facilitates smooth customs clearance, access to government benefits, and streamlined foreign currency transactions. It ensures legitimacy, security, and transparency in cross-border transactions, and is a prerequisite for linking your bank account to your Import Export Code (IEC).

Q3. Who issues the AD Code, and where should a business apply for it?

Ans. Only banks authorized by the RBI issue AD Codes. Businesses must apply at the specific branch of the bank where they maintain their primary current account used for international trade activities.

Q4. What is the primary purpose and benefit of obtaining an AD Code?

Ans. The fundamental purpose of the AD Code is to facilitate the meticulous monitoring and effective management of all foreign currency transactions associated with international trade. It ensures traceability and security of financial flows, which is crucial for compliance and efficient trade operations.

Q5. Is the AD Code linked to any other mandatory business identifier?

Ans. Yes, the AD Code is inextricably linked to the Import Export Code (IEC). A business must have an IEC to obtain an AD Code, as it forms a foundational layer of authorization for participating in global commerce.