Traders get a little nervous every time someone mentions customs clearance services, irrespective of the level of experience they have gained in the shipping industry. Arranging all the other shipping documents is one thing, and customs clearance is entirely different! And out of all the formalities, applications and documentation needed for the customs department, the AD code is a simpler one. This code is easy to acquire, and traders must know about its importance.
AD Code: Importance in Exports
The Authorized Dealer Code, commonly termed as the AD code, is a unique 14-digit code that every exporter has to obtain for the customs clearance process. The traders have to get this code from their bank in which they have the current account of their company. The AD code meaning is prominent in the shipping industry as there is no way to get the export customs clearance without it.
As every trader knows, one has to get the shipping bill passed to get started with the customs clearance process. And the EDI (Electronic Data Interchange) portal does not allow to make the shipping bill. Neither the trader nor his customs house agent can use their licenses to submit the shipping bill application successfully. Also, the traders who are entitled to enjoy government benefits cannot avail those without the AD code.
Application Process for The AD Code
You have to consult with your bank and proceed with submitting a request letter to obtain the Authorised Dealer Code. If everything goes well and you get the approval, your bank will issue you a letterhead mentioning your AD code. The DGFT (Directorate General of Foreign Trade) prescribed this unique format of the letter.
Follow the simple steps mentioned below to get the code easily and begin with the freight shipment process.
- Take the application letter format from the bank or a reliable source online. Take the help of a well-known shipping company.
- One has to edit the format with his details like the company name, address, contact details, trading license number, etc. Make sure all these bits of information are not missing any digits.
- Once the bank approves the letter, they will issue the AD code within 2-4 working days. Some banks might offer this application facility online so one must always check for the odds before proceeding with the process.
Registration Process of The AD Code with Customs
One important step that not all traders know is that it is crucial to register the AD code with the customs. Some traders just make the registration with the port of shipment whenever they are shipping their first freight. But, the ports are individual and different entities, the customs department is national. So, if one registers the first time, say with Chennai port, he will have to register it again when he ships the goods from any other port.
- Ask the CHA to make a registration application to the customs department and submit all the necessary documents.
- Attach a copy of the letterhead issued by the bank that has the AD code mentioned in it.
- Submit the attested copies of other documents like the GST registration copy, bank statement, business PAN card, IT returns statements, Aadhar and PAN card of the trader, and other documents asked by the customs.
- Once the customs registration process is complete, all the basic information of the trader’s company will appear on the IceGate platform.
The AD code is one of the many important codes and authorization numbers that a trader needs to have. The shipping industry works with the coordination of different government bodies of different countries. One cannot escape these formalities but can make the process easier with the help of a shipping service provider.