Import-Export Business Compliance in India: What Traders Must Know
Introduction
India’s global trade environment has grown rapidly in recent years, especially with supportive government schemes like RoDTEP, MEIS, and PLI. However, with opportunity comes responsibility. If you’re running or planning to start an import-export business, import export compliance in India is non-negotiable. A single mistake in paperwork, tax treatment, or customs procedure could result in delays, penalties, or blacklisting.
In this blog, Makwana Sweta & Associates, a leading provider of CA services in Mumbai, breaks down everything you need to know about compliance for import-export businesses in 2025.
Why Compliance Matters in Import-Export
Non-compliance in international trade can result in:
- Seizure of goods
- Hefty customs penalties
- Suspension of Importer Exporter Code (IEC)
- Rejection of tax benefits under schemes like RoDTEP, SEIS, etc.
Staying compliant boosts trust among international clients, shipping agencies, and financial institutions.
Step 1: Register for IEC (Importer Exporter Code)
What is IEC?
IEC is a 10-digit number issued by the DGFT (Directorate General of Foreign Trade). It’s mandatory for anyone importing or exporting goods/services from India.
Documents Required:
- PAN Card of business or individual
- Aadhaar/Passport of proprietor or directors
- Proof of address (utility bill, lease deed, etc.)
- Cancelled cheque
Fees & Time:
- Government Fees: Rs. 500
- Processing Time: Usually 1-3 working days
IEC is now permanent and does not require renewal, but annual update of details is mandatory under DGFT norms.
Step 2: GST Registration
Any importer/exporter engaged in taxable supply of goods or services must register under GST Act.
Why it’s important:
- Required for filing shipping bills and claiming input tax credit
- Enables smooth reconciliation of invoice and tax data under GSTN
Tip: Use a separate GSTIN for your import-export vertical to simplify compliance.
Step 3: Understand Customs Regulations
You must be aware of:
- HS Code (Harmonized System Code): 8-digit classification of goods
- Import duty slabs (BCD, IGST, CESS)
- Customs Valuation Rules: Includes FOB, CIF, insurance, and freight charges
- E-Way Bill requirements if goods move interstate
You can check duty and HS codes on the ICEGATE portal: https://www.icegate.gov.in
Step 4: DGFT Schemes & Obligations
Popular Export Incentives (as of 2025):
- RoDTEP (Remission of Duties and Taxes on Exported Products)
- Advance Authorisation Scheme
- Export Promotion Capital Goods (EPCG)
You must:
- File claims on time
- Maintain export and shipping documentation
- Submit Annual Return under Foreign Trade Policy if required
Incorrect or delayed filing may lead to denial of benefits.
Step 5: Maintain Proper Documentation
Key Documents to Maintain:
- Commercial invoice
- Packing list
- Bill of Lading or Airway Bill
- Shipping Bill (for exports)
- Bill of Entry (for imports)
- GSTR-1, GSTR-3B, and reconciled ITC
All documents must be preserved for 6 years under the Customs Act and GST Act.
Step 6: Banking and FEMA Compliance
Your international transactions fall under the Foreign Exchange Management Act (FEMA). You must:
- Route all foreign transactions through Authorised Dealer (AD) Banks
- File EDPMS (Export Data Processing and Monitoring System)
- Receive export proceeds within 270 days from shipment
- Report inward/outward remittance in prescribed format
Non-compliance may attract penalties under FEMA ranging from Rs. 10,000 to 3x the amount involved.
Step 7: Audit & Annual Filings
Depending on your business type:
- File Income Tax Return (ITR-3 or ITR-6)
- File GST annual returns (if applicable)
- Submit DGFT returns for EPCG or other scheme usage
Appointing a Chartered Accountant in Mumbai with import-export experience is strongly recommended.
Penalties for Non-Compliance
| Area | Penalty |
|---|---|
| IEC Non-renewal | IEC may get suspended by DGFT |
| GST Late Filing | Rs. 50–100/day + interest |
| Customs Violation | Confiscation of goods + up to 5x penalty of duty avoided |
| FEMA Violation | Fine of Rs. 10,000 or up to 3x the transaction value |
How Makwana Sweta & Associates Can Help
We provide end-to-end assistance in import export compliance India, including:
- IEC registration and DGFT portal support
- GST compliance for exporters/importers
- Customs documentation and reconciliation
- Filing claims under RoDTEP or other schemes
- FEMA & RBI reporting
As a trusted Chartered Accountant in Mumbai, we serve clients across India and abroad with dedicated CA services for traders.
Final Thoughts
International trade presents lucrative growth opportunities. But without the right compliance, businesses risk penalties and loss of reputation. Let Makwana Sweta & Associates, your trusted CA in Mumbai, help you navigate the complex legal and tax framework.
For expert support in import export compliance India, reach out to us today.