Supplier Notes · Export Documentation Series, Part 1 · General
Every export journey for an Indian textile mill starts with the same two documents, and most first-time exporters either delay getting them until a buyer is already waiting, or get them wrong in a way that costs weeks later. This is the first in a series walking through export documentation step by step — starting with the two that come before everything else: the IEC and the GST LUT.
IEC: the license that makes you an exporter at all
The Import Export Code (IEC) is a 10-digit registration issued by the Directorate General of Foreign Trade (DGFT), and no goods can legally leave India for export without one. Since a 2014 policy change, the IEC isn’t a separate number to keep track of — it’s your business PAN itself, registered for trade. That means each PAN can hold only one IEC, and the registration, once granted, carries lifetime validity with no renewal required.
How to get it
- Apply online at dgft.gov.in under the IEC Profile Management section — the entire process is digital, with no physical office visit required.
- You’ll need a valid PAN and proof of business address; no prior export experience or minimum turnover is required to apply.
- Processing typically takes 1–3 working days, though it can run longer around month-end when DGFT processing volume is higher.
- The government fee is nominal — currently around ₹500 — making cost a non-issue for even the smallest first-time exporter.
The one compliance step that trips up mills after they’ve had an IEC for a while: it requires a mandatory annual update on the DGFT portal between April and June each year. Skipping this doesn’t cancel the IEC outright, but it can flag the registration as inactive at exactly the moment a shipment needs to clear customs — a completely avoidable delay.
GST LUT: exporting without locking up your working capital
Under GST, exports are treated as “zero-rated supplies” — the tax rate is nil, but unlike a plain exemption, the exporter keeps the right to claim Input Tax Credit on the inputs used to make the exported goods. There are two ways to actually realise that zero rating: pay IGST upfront and claim a refund later, or file a Letter of Undertaking (LUT) and skip the upfront payment entirely. For almost every exporter, the LUT route is the better one — it keeps working capital free rather than parked with the government waiting on a refund cycle.
How to file it
- File Form EXP-01 on the GST portal, under Services > Refunds > Furnish LUT — fully online, with no bond, bank guarantee, or physical documentation required.
- Eligibility is straightforward: any GST-registered exporter with no prosecution history for tax evasion exceeding ₹2.5 crore.
- The LUT is valid for one financial year only — for FY 2026-27, that’s 1 April 2026 to 31 March 2027 — and must be freshly filed before the first zero-rated export of each new financial year.
- Export proceeds must be realised within one year of the export date; missing that window triggers IGST liability plus 18% interest, so this isn’t a box to tick and forget — it comes with an ongoing compliance obligation tied to actually getting paid on time.
Mills that file their LUT the same week they get their IEC, rather than waiting until a buyer is already asking for a shipment date, consistently move faster on their first order than mills who treat documentation as something to sort out once demand shows up.
The AD Code: the step buyers rarely mention, but customs won’t skip
One more registration belongs in this same starting checklist: the Authorised Dealer (AD) Code, which links your bank account to customs for legitimate foreign exchange realisation. As of the current framework, AD Code registration through ICEGATE at a single port is automatically recognised across all customs stations nationally — a real simplification from the earlier system, where many exporters mistakenly believed they needed separate registrations at every port they might ship from.
Where this series goes next
IEC and GST LUT get you legally able to export and structured to do it without tying up cash. The next parts in this series cover the documents that actually move with each individual shipment — starting with the commercial invoice and packing list, where small errors are the most common reason customs clearance gets delayed.
Celeris Exim guides first-time exporting mills through IEC, LUT, and AD Code registration as part of onboarding — so your documentation is already in order before your first buyer conversation, not scrambled together after one.
Sources: “Step-by-Step: How to Obtain Import Export Code (IEC) in 2026,” IncorpX · “Letter of Undertaking (LUT) for GST Export: Filing Process FY 2026-27,” IncorpX · “Documents Required for Export from India,” Razorpay