I had taken up an IEC registration in 2018. But I dropped the business idea in a few months.
I don't need the IEC anymore.
Now my IEC number has come up in the list to be automatically deactivated by DGFT due to non-updation of profile.
Can I just let the IEC get deactivated by DGFT themselves or should I surrender it myself? Are there any differences between the two? Legally do both indicate closed business activities? And can I close my bank current account mentioned during IEC registration after IEC is deactivated by DGFT?
Thanks in advance for your valuable help and guidance.
09 July 2024
If your IEC (Importer Exporter Code) is scheduled for automatic deactivation by DGFT due to non-updation of profile, you have a couple of options regarding how to handle this:
### Letting DGFT Deactivate the IEC:
1. **Procedure:** - If DGFT deactivates your IEC automatically, it typically means they will mark your IEC as inactive in their records. - You will receive communication from DGFT regarding the deactivation.
2. **Implications:** - Deactivation by DGFT due to non-updation of profile generally indicates that the IEC is no longer valid for conducting import-export activities. - Legally, this indicates that you are not actively involved in import-export operations under that IEC anymore.
3. **Bank Account Closure:** - After DGFT deactivates your IEC, you can consider closing the bank current account linked to that IEC, as it would no longer be necessary for import-export transactions under that IEC.
### Surrendering the IEC Yourself:
1. **Procedure:** - Alternatively, you can proactively surrender your IEC to DGFT. - This involves submitting a request to surrender the IEC along with necessary documentation (if any).
2. **Implications:** - Surrendering the IEC indicates a voluntary decision to formally close your import-export registration. - Legally, this also signifies that you are ceasing all import-export activities under that IEC.
3. **Bank Account Closure:** - After surrendering the IEC, you can proceed to close the bank current account associated with it, as you would no longer be using it for import-export purposes.
### Differences Between Deactivation and Surrender:
- **Deactivation by DGFT:** Indicates that DGFT has marked your IEC as inactive due to non-compliance with profile updation requirements. It is passive in nature.
- **Surrender by Applicant:** Indicates a voluntary decision to close the IEC, signifying a deliberate cessation of import-export activities under that registration.
### Closing Bank Account:
- **After Deactivation or Surrender:** You can close the bank current account linked to the IEC once the IEC status is officially deactivated or surrendered. Ensure all financial transactions are completed and accounts settled before closure.
### Recommendation:
- If DGFT is already planning to deactivate your IEC, you may choose to let them proceed with the deactivation process. This route is straightforward and doesn't require additional paperwork from your end unless you plan to surrender it proactively for personal closure reasons.
- For clarity on specific legal implications or procedural details, especially regarding bank account closure and ensuring compliance, it's advisable to consult with a professional advisor or your bank's relationship manager. They can provide tailored guidance based on your specific circumstances and ensure smooth closure processes.
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