AD Code Validity: Do You Ever Need to Renew Your Registration?

When an exporter deals internationally, the fear of fraud and illicit activity becomes a concerning topic. However, since the Indian government mandates compulsory AD code registration, foreign exchange transactions become easier. With exporters who deal internationally, they receive the support of RBI’s authorized banks. The banks basically issue the AD code letter, which is used to register on the DGFT portal. It is common to mention that every certificate requires renewal to keep it active. However, the concern regarding the AD code arises. Is it also required to renew? Let’s break down the page to know the validity of the AD code. Read more in the next section.

AD Code facilitates the International Trade Opportunities

The AD code, which contains the 14-digit unique numbers, acts as the identifier for exporters/importers. The role of the code is to link the exporter’s bank account to customs. Although it becomes easy to track the foreign exchange transactions, it prevents illicit activity and fraud. On the other side, by facilitating international trade opportunities for businesses, it clears the customs clearance route, boosts the GST refund process faster, and does much more. It ensures that the exporters receive the incentives directly into their bank accounts. In a deeper look at the work of the authorized dealer code:

• Differentiates the exporters in international markets for foreign trade transactions.
• The 14-digit code is the identifier of the exporter in front of the customs department authority.
• Code connects the current bank account of the exporter with the export-import transactions.
• Through the code, the customs authority tracks the history of export transactions. 
• Furthermore, it gives access to the Reserve. The role of banks in the AD code is to monitor exporters’ foreign transaction activities. 

AD Code is Active for Lifetime: Reduce Renewal Burden

The businesses that are associated with export/import activities are required to show the AD code certificate at specific ports. It demonstrates that the code is the primary requirement to manage the foreign exchange transactions. By adhering to the set RBI guidelines and other requirements, you ensure you meet foreign trade management compliance. Upon approval of the code, the exporter can use it for various purposes, including getting customs clearance, export incentives, market access, and many more. When the topic comes up for renewal, understanding its parameters becomes crucial. On the other hand, an exporter doesn’t need to renew its AD code, as it is valid for a lifetime. Yes, the authorized dealer code is restricted for renewal. There are no more code renewal challenges. However, in place of renewal, exporters need to reapply for AD code registration in certain cases.

What are the Reasons for the New AD Code Registration?

As the AD code has a lifetime validity, exporters are subject to re-registration under specific conditions. These conditions can be:

Change in the Current Bank Account

Sometimes, a situation arises when an exporter is required to change its bank from one to another. When an exporter shifts its current bank account to another bank, it needs to reapply for the AD code bank account registration.

Change in the Current Bank’s Branch

During the change in the branch name of the same bank account, the exporters are required to apply for the AD (Authorized Dealer) code. It is mandatory to re-register after changing bank branches.

Export through New Port

In case the exporter decides to export goods from a new port, they need to re-register the AD code. For a specific port, a separate AD code.

Change in Business Information

AD codes are linked to the exporter’s business details. Therefore, if any changes occur in business details, the exporter must apply for a new AD code. 

Update Your AD Code: Step-by-Step Guide

To update the current AD code, the exporter is required to obtain a new AD code letter from the current bank account. The other steps involved in updating code are:

Step 1: Apply for a New AD Code letter

In case the exporter changed its current bank account to a new one, request a new bank for a fresh AD code letter. Upon request, the new bank will issue a fresh AD code letter on its letterhead. 

As per the Customs Public No. 93/2020, gather the specific documents, such as a cancelled cheque from a new bank, a bank certificate, and an AD code letter.

Step 2: Provide the Necessary Documents

For a new AD code registration with a new bank, gather these documents:

• The ICE number certificate
• GST registration certificate copy
• The company’s PAN card
• Authorized signatory’s PAN and Aadhaar card
• Authorized  signatory’s passport-size photo

Step 3: Navigate the ICEGATE Portal

Log in to the ICEGATE profile. Visit the e-Sanchit option after navigating the filing services. As per requirements, attach all supported documents. After uploading the documents, generate the DRN (Document Reference Number) and Invoice Reference Number (IRN). 

Step 5: Register for a new bank account and an AD code

Visit the financial service section and look for ‘AD Code Registration’ and ‘New Bank Account.’ Proceed to select a new bank and branch, which will automatically generate an AD code.

Step 6:End of Process

Mention the important details such as the location code and the bank account number.  For a new AD code registration application, complete the final step.

Final Discussion  | Renewal Requirements for AD Code Registration

To gain international market access, which allows them to deal in foreign exchanges, businesses are required to obtain an AD code. Now, the AD code apply online, making the registration process much easier. The registration is mandatory to link foreign financial transactions to international trade activities. Meanwhile, the authorized dealer code registration is only a one-time process. The code will remain active until changes come in the bank account, branch name, and port change. To freely trade in foreign exchange transactions, register for your AD code. At LegalRaasta, our experts are professionals in issuing valuable assistance. 

Frequently Asked Questions Related to the AD Code Renewal Process in India

1. Do exporters renew  AD code registration?

Ans. No, exporters don’t need to renew their AD code as it is valid for a lifetime. But re-registration becomes mandatory when changes occur in the bank account, a shift to a new branch, or export to a new port.

2. Can I register two AD codes on ICEGATE?

Ans. Yes, businesses can register the two authorized dealer codes on the ICEGATE portal. But it is only possible when the exporter uses a different bank account for foreign exchange transactions.

3. Who cannot register on ICEGATE?

Ans. Organizations and individuals who do not hold a valid Import-Export Code (IEC) or other relevant authorization.

4. Is AD code registration on ICEGATE mandatory?

Ans. Yes, for shipping bill filing on ICEGATE, the exporter is required to register the code on the portal.

5. Does AD code registration depend on goods or services?

Ans. No, the requirement of an authorized dealer code doesn’t depend on the nature of the goods or services. But it depends on the business’s nature; as for code registration, the entity may be associated with export and import.