Authorised Dealer Code: Definition, Importance and Application Process
An authorized dealer (AD) is a company or entity that has official permission to sell the product of another company. They primarily become distributors of an established brand. All authorized dealers are required to get an AD code after getting registered for import and export of foreign goods.
Read on to know what AD code is and its application process.
What Is Authorised Dealer Code?
The AD code is an abbreviation for Authorised Dealer Code. It is a 14-digit code which is obtained from the bank where the dealer has its current account. It is one of the primary documents that dealers require to get through the customs clearance process after import-export registration.
A dealer will be required to get an AD code for every port to get customs clearance. The government introduced this system to keep track of the dealers who trade using foreign currencies.
Why Does the Exporter Need the Authorised Dealer Code?
Exporters need to obtain an AD code to get the shipping bill number for their shipment. The shipping bill number is important to get customs clearance for a particular shipment. The Electronic Data Interchange System of the Indian Customs Electronic Gateway (ICEGATE) prohibits generation of shipping bills in absence of an AD code.
Also, if a dealer is entitled to any government benefits, the Authorised Dealer code registration will enable a straight deposit of such benefits into his/her account.
How to Apply for AD code?
You have to obtain an AD code for every port your shipment travels through. The registration has a lifetime validity unless you change your bank account.
Here is how you can apply for an Authorised Dealer Code letter:
Step 1: Visit the bank where you have your business’s current account.
Step 2: Submit an application addressing the branch manager for furnishing an AD code.
Step 3: Get an AD code with the bank’s letterhead in the Directorate General of Foreign Trade format.
Step 4: Upon getting the letter, you will be able to get an AD code for every exporting port.
Kindly note that there is no online facility to obtain an AD code.
How to Register an Authorised Dealer Code with Customs?
Follow the given procedure to get your AD code registered with customs.
Step 1: Get in touch with a CHA (Customs House Agent) to register your AD code with the customs department after obtaining it from your bank.
Step 2: Submit the following list of documents along with the AD code registration letter issued by your bank:
- GST registration
- Company’s PAN details
- Board Resolution
- IT Returns of the company or self for the last three years
- Currently updated bank statement
- Company’s IE (import-export) code
- Export House Certificate
Step 3: You will get an update regarding your AD code letter within 3 to 4 days.
How to Register an Authorised Dealer Code with Customs via ICEGATE?
You can also register your AD code with customs on their ICEGATE website by following the steps given below:
Step 1: Log in to the ICEGATE website and generate an ID and password.
Step 2: On the left side of the screen, click on ‘Bank Account Management’.
Step 3: Select the AD Code Registration and click on ‘Submit’ to access the AD Code Bank Account Registration page.
Step 4: Provide the relevant details including location, bank name and AD code. Upload the necessary documents as mentioned on the website. You will get a document reference number (DRN) and an Image reference number (IRN).
Step 5: Click on ‘Save Change’ after which an OTP will be sent to your registered email id and number.
Step 6: Verify the OTP on the platform. The approval might take a few days, and you will be notified of any new updates.
What Is the Importance of AD Code?
Here are some of the benefits of AD code which make it important for import-export business:
- It helps the government keep track of trades involving foreign currency, which ensures a stable economy.
- Without it, the trader won’t be able to generate a shipping bill which is mandatory for customs clearance.
- AD code also enables straight deposit of government benefits into the exporter’s bank account.
If you are planning to set up a start-up, it is important for you to know what AD code is and how AD code works. Generating an AD code aims to provide dealers with a hassle-free import-export process and helps the government keep track of dealers who engage in foreign trade.