Iec

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Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2014 CAN AN ASSESSEE SALE HIS IEC ?

Sandeep Dharar

Sandeep Dharar (Expert)
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25 June 2014 What do u mean by IEC?

CA Shashank Jain

CA Shashank Jain (Expert)
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25 June 2014 No Import Export Code is specifically provided to the assessee and registered in that name. So it cannot be sold. You can cancel the code.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2014 yeah but one of my client sold the import export license and he engaged in the business of export of cloths and he told me in that respect that he got such type of incentive and he sold that because there is no use. he shows that sale in the head of sale. is this correct...i saw all the document regarding to that and they are correct.

Asha Kanta Sharma

Asha Kanta Sharma

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28 July 2024 The **Import Export Code (IEC)** is a unique identification number issued to businesses by the Directorate General of Foreign Trade (DGFT) in India, enabling them to engage in international trade. Regarding your query about selling the IEC, here are key points to consider:

### **1. **Legal Framework for IEC Transfer or Sale:**

- **Non-Transferability:** The IEC is generally non-transferable. According to DGFT rules, an IEC is specific to the entity to which it is issued and is not intended to be sold or transferred to another party. The rules do not explicitly permit the sale or transfer of the IEC.

- **Regulatory Compliance:** Selling or transferring an IEC may violate DGFT regulations. The IEC is issued based on the credentials and business profile of the entity, and any transfer might not comply with the legal requirements.

### **2. **Accounting and Reporting of IEC Sale:**

- **Accounting Treatment:** If your client has sold their IEC, the accounting treatment of such a transaction should be in line with accounting standards. Typically, the sale of an asset, including intangible assets like IEC, should be recorded appropriately in the financial statements.

- **Revenue Recognition:** The sale of an IEC, if considered valid, should be recognized as income under the head “Other Income” rather than as a part of the regular sales or revenue from operations.

### **3. **Practical Considerations:**

- **Legal Implications:** There could be legal implications or penalties if the sale or transfer of IEC is not in accordance with DGFT regulations. It’s advisable to review the terms and conditions associated with the IEC issuance and ensure compliance with legal standards.

- **Verification:** Verify the authenticity of the documents related to the IEC sale. Ensure that the transaction is documented correctly and complies with all applicable regulations.

### **4. **Steps to Take:**

1. **Consult Legal Experts:** Seek advice from legal or compliance experts to confirm whether the sale or transfer of the IEC was conducted legally. They can provide clarity on regulatory compliance and any potential repercussions.

2. **Verify with DGFT:** Check with DGFT or the relevant authority to understand the implications of IEC transfer and to ensure there are no violations of regulations.

3. **Update Records:** Ensure that the financial records accurately reflect the transaction and that the accounting treatment aligns with accounting standards and regulatory requirements.

### **Summary:**

The sale of an IEC is generally not permitted under DGFT regulations, as it is intended to be a non-transferable identifier for the specific entity. If your client has sold the IEC, it is crucial to ensure that the transaction complies with all legal requirements and is accurately reflected in the financial records. Consulting with legal and compliance experts is advisable to address any potential issues and ensure proper handling of the transaction.