The key activity in the process of export customs clearance after an Indian exporter has settled products for export overseas is shipping bill filing. It is a statutory document which provides authorization to export freight overseas. Among all other pieces of information which are supposed to be disclosed on the shipping bill, the authorised dealer (AD) code is one which holds significant significance. Having knowledge about the AD Code working under export shipping bill filing makes exporters compliant and easy realization of export proceeds achievable.
The main purpose of the AD Code is to enable:
- Monitoring of export proceeds
- Remittance of export incentives and refund into the proper bank account
- Verification of exporter’s bank account information with customs
Exporters cannot prepare the shipping bill without AD Code registration at the export point, i.e., cargo cannot be allowed for shipment.
Why is AD Code essential in Export Shipping Bill Filing?
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Association of Export Proceeds with the Exporter
One of the important roles played by AD Code for export shipping bill filing is linking export proceeds to the bank account of the exporter. Payments for exports are received from foreign buyers, and they are reconciled by RBI and Customs authorities with the details of the shipping bill on the basis of the AD Code. The linking helps ensure that money is released to the rightful exporter and no payments remain unaccounted as per FEMA rules.
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Compulsory for generation of Shipping Bill
Indian customs have made compulsory registration of the AD Code prior to submission of the shipping bill. The exporters have to quote their AD Code while they are generating the shipping bill in ICEGATE. Otherwise, the shipping bill will be rejected and thus clearance will be suspended.
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Availing of Export Advantages
These consist of a number of government incentives such as Duty Drawback, MEIS/ RoDTEP schemes and refunds under GST, which are processed electronically. The incentive credit is credited to the mapped bank account by way of registered AD Code. Mismatch or non-registration of the AD Code thus prevents or delays these benefits.
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RBI Regulations Compliance
FEMA rules and RBI guidelines necessitate reporting of export foreign exchange receipts in a proper manner. AD Code under export shipping bill filing enables such transactions to be conducted through recognized banking channels and thus bring in transparency and prevent money laundering.
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Simple Customs Clearance
When an AD Code is being registered with customs, subsequent shipments from the port take advantage of the same verified bank details, hence simplifying the filing of subsequent shipping bills. The standardization saves time and reduces documentation errors.
How to Register an AD Code with Customs?
AD Code registration is executed once for each port. Go through step-by-step procedure below:
Get AD Code Letter
Request your bank to prepare an AD Code letter on the bank’s official letterhead. It should contain:
- Exporter’s name and address as per IEC
- 14-digit AD Code
- Bank branch details
Prepare Advance Supporting Documents
- Self-attested IEC (Import Export Code)
- PAN card
- GST registration certificate
- Authorization letter (in case of filing via a CHA)
Submit to Customs
Send AD Code letter and documents to concerned port Customs House. AD code is to be verified and registered by the customs officer in the ICEGATE system.
Confirmation
Once cleared, you are confirmed and AD Code is enabled in ICEGATE for filing shipping bill.
For export from other ports, you are required to duplicate AD Code registration in other ports.
Types of Shipping Bills and AD Code Requirement
As in Citrus Freight blog, there are different Shipping Bills:
- Free Shipping Bill
- Dutiable Shipping Bill
- Drawback Shipping Bill
- Ex-Bond Shipping Bill
- Export Promotion Shipping Bill
A valid AD Code is to be mentioned for all of them. Whether or not the export is duty-free, drawback-eligible, or from a bonded warehouse, the AD Code levies payment or incentives for exports against the exporter’s account.
Conclusion
The AD Code in export shipping bill filing is not only a procedural requirement; it is the backbone which unifies export documents, regulation, and foreign exchange realization. Obtaining your AD Code registered timely and correctly is required to avoid delay in export shipping, export incentives, and clean trade.
FAQs
Q1. Why use the AD Code for export shipping?
The AD Code links the exporter’s bank account with Customs and RBI, and authorises crediting and monitoring of export payments and incentives thereon.
Q2. Do I need to register AD Code in all ports?
Yes. If you are exporting from more than one port, you must register the AD Code separately for each port at Customs.
Q3. Can I file a Shipping Bill without an AD Code?
Indian Customs will not accept the filing of the Shipping Bill if the AD Code registration is not approved at the port.
Q4. How long does AD Code registration take?
It takes 3–5 working days from the date of submission of complete documents with Customs for activation of the AD Code.
Q5. What if my bank account changes?
You will need to obtain a new AD Code letter from the new bank and re-register at every export port with Customs to reflect the change.
If you need further assistance or have any doubts, our experts are here to help you. Call us: 8881-069-069.
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