SDG 9: Industry, Innovation and Infrastructure | SDG 8: Decent Work and Economic Growth
Institutions: Ministry of Finance
The Central Board of Indirect Taxes and Customs (CBIC) has introduced a system-based auto-approval mechanism for the registration of incentive-linked bank accounts and IFSC codes, significantly boosting the Ease of Doing Business. Previously, requests to register the same bank account and IFSC code under a single Importer Exporter Code (IEC) required manual approval by Customs officers at every single port location, leading to duplication and delays. Under the new initiative, if a bank account and IFSC code combination has been approved at one Customs location, the system will now automatically approve subsequent registrations for that same combination at multiple other locations. This streamlining eliminates manual intervention and is aimed at ensuring the faster and seamless credit of export incentives into exportersβ bank accounts, thereby enhancing overall trade efficiency.
This move directly operationalizes the Digital India and Ease of Doing Business mandate by leveraging technology (system-based approval) to eliminate manual interfaces and reduce the transaction costs and time taken for Indiaβs trade community.
What is an Importer Exporter Code (IEC)? The IEC is a mandatory 10-digit code issued by the Directorate General of Foreign Trade (DGFT) that every business needs to import goods into or export goods from India. It matters as it acts as the primary identifier for trade, and linking bank accounts to the IEC is essential for receiving government benefits and incentives.
What is an Incentive-Linked Bank Account? Incentive-linked bank accounts are the designated accounts used by exporters, tied to their Importer Exporter Code (IEC), into which the government directly credits financial benefits related to export activities, e.g. Goods and Services Tax (GST) refunds and Duty Drawback claims.
Relevant Question for Policy Stakeholders: How quickly will the CBIC scale up this auto-approval system to cover all incentive-linked banking processes to ensure maximum reduction in turnaround time for exporters?
Follow the full news here: System-based Auto-approval to Enhance Ease of Doing Business