Which Digital Signature Do We Require for the IEC Code?

In India, all businesses and individuals involved in exporting or importing goods must acquire an Importer Exporter Code (IEC). The Directorate General of Foreign Trade (DGFT) issues this 10-digit code that is compulsory in customs clearance, bank remittances, and foreign trade transactions.

Although the IEC application process has been completely digitised via the DGFT portal, there is one factor that tends to disorient applicants, and that is the nature of the Digital Signature Certificate (DSC) needed. Knowledge of which digital signature is required, its necessity, and proper use will guarantee a successful application with no time losses and rejections to the IEC.

This paper discusses in depth what kind of digital signature you require to use in IEC, why, and how to get it, and what errors should be avoided by an applicant.

What Is a Digital Signature Certificate (DSC)?

A Digital Signature Certificate is a digital equivalent of a physical signature. It ensures the authenticity of the signer and the integrity and security of digitally signed documents. DSCs are issued in India as a provision in the Information Technology Act, 2000.

In the case of an online IEC application, the DSC provides legitimacy, security, and legal validity to the application. The DGFT requires the use of specific types of DSCs to ensure consistency and prevent fraud in international trade documentation.

What DSC Is Necessary in an IEC Application?

To obtain an IEC code, the DGFT requires a Class 3 Digital Signature Certificate. This is the maximum level of authentication currently being implemented for organisational and e-governance purposes.

A Class 3 DSC ensures:

1. High-level encryption
2. Checking of applicant identity.
3. Signing of legal and financial contracts safely.
4. Adherence to the digital standards of security of DGFT.

The only thing you should use in case you are registering a new IEC or renewing an existing IEC, or in case you are making some changes to your business, is a Class 3 DSC.

Who should use the Digital Signature of IEC?

A digital signature should be one of the people who are allowed to apply to the IEC. This would be based on the nature of the entity:

1. In the case of a Proprietorship, the DSC of the proprietor is obligatory.
2. In the case of a Partnership Firm, A partner who is registered in the partnership deed can use his/her DSC.
3. In the case of LLP, the DSC of one of the designated partners should be employed.
4. For a Private Limited or Public Limited Company, the DSC of a director granted by a board resolution is obligatory.
5. In the case of HUF, the Karta DSC should be applied.

In the case of DGFT, if the application is submitted but the DSC is not consistent with the identity of the owner of the PAN in the specific type of business, then the application is not accepted.

Why Does DGFT IEC Need a Class 3 DSC?

The IEC plays a significant role as an identity document for both exporters and importers. DGFT needs a Class 3 DSC since:

• High Security: Docket-Export The financial transactions, customs checks and international compliance are joined to export-import documentation. A high-convincing electronic signature minimises the dangers of fraud or misrepresentation.
• Identity Verification: Class 3 DSC entails either face-to-face or video verification prior to issuance to verify that the identity of the applicant is fully verified.
• Legal Validity: DSC serves as legal evidence of the granting of authority to the applicant to represent the business.
• Tampering Prevention: Once signed digitally, the application cannot be changed in a way that alters the digital signature.

Class 3 DSC hence guarantees authenticity, integrity and accuracy in the IEC issuance process.

Types of Class 3 DSC for IEC

Class 3 digital signatures are of two types:

• Signature DSC: Signing used only.
• Signature + Encryption DSC: This is applied to sign and also encrypt documents.

A Class 3 Signature DSC is adequate to use in IEC. ICF filing does not demand encryption ability of DGFT.

Application of a Class 3 DSC by IEC

Application to a DSC would be relatively simple and possible online under the certification of the Authorities named Certifying Authorities (CA) like eMudhra, V-Sign, NIC, Capricorn and Sify.

To obtain the DSC, you need:

1. PAN
2. Aadhaar
3. Passport-size photo
4. Mobile number and email ID
5. Video/Aadhaar-based verification.

A token (USB cryptographic device) is issued with the DSC after verifying it, and the digital signature is stored. This token is required to be attached to your computer during the signing of the IEC application.

How to apply DSC to the DGFT Portal for IEC?

After registering it on the DGFT portal, you then need to do the IEC application after registering the Class 3 DSC. The steps include:

1. Go to the DGFT portal and sign in using your credentials.
2. Access under the user services digital signature.
3. Plug the DSC token into your computer.
4. Choose the registered email ID.
5. Check the DSC with the help of the browser plug-in.

Common Mistakes Applicants Make With DSC

• Misuse of the class of DSC: Class 2 DSCs are not acceptable when filing IEC anymore; Class 3 only is acceptable.
• Application of DSC of a person not in authority:g. application of a company’s IEC by use of the DSC of an employee.
• Discrepancy between PAN and DSC: The PAN in connection with the DSC has to correspond to the PAN of the business applicant.
• Wrong registration in DSC portal: The email in DSC should be associated with the user ID which is used to log in.
• Expired DSC: Digital signatures are normally validated for 1-3 years, after which they have to be renewed.

Conclusion

To use a Class 3 Digital Signature Certificate, also known as a Class 3 DSC in India, you need to apply for an IEC. It offers the utmost degree of security, legality and authentication as demanded by DGFT. Whether it is a proprietorship, partnership, LLP, or company, the DSC must be held by an authorised person of the business’s PAN.

It is with the proper knowledge of the right kind of DSC and its adequate usage that you can ensure your IEC application is handled with ease, allowing you to start your export or import business without any delays.