Circular No. 84 dated 16^th December 1999

I am directed to say that Ministry of Finance, in consultation with the Ministry of Commerce, has decided that all persons dealing with various regulatory agencies, such as the Central Excise and Customs Department (including Service Tax Administration), Income Tax Department, Offices of Director General of Foreign Trade etc. should be identified with reference to a common identification number. Such common identification number to be used by various Departments will be based on the Permanent Account Number allotted by the Income Tax Department. A background note on this matter is enclosed for your information (See Annexure-I).

2.      As you are aware, the Customs Department does not issue any such identification number to importers/ exporters, but uses IE Code issued by Director General of Foreign Trade (DGFT) to the importers/ exporters. The importers and exporters are required to mention the IE Codes in the Bills of Entry and the Shipping Bills. In pursuance of the above decisions, the DGFT have since issued instructions dated the 16th November, 1999 (see Annexure- II) requiring importers/ exporters to furnish their PAN for allotting the new IE Code by the DGFT.

3.      It is to be mentioned that w.e.f. 1.1.2000, the importers & exporters would be required to indicate on the customs documents (B/ E & S/ B) both the existing IE Code issued by the DGFT and the PAN issued by the Income- Tax Department. However, from 1.4.2000, the IE Code issued by DGFT based on PAN alone will be used.

4.      Appropriate Public Notices may kindly be issued in this behalf for the information of the trade.

5.      Please acknowledge receipt of this circular.

ANNEXURE-I

Background Note on a Common Business Identifier for Importers/ exporters, Central excise assesses, Income tax assesses, etc.

Presently, different agencies of the Government use separate numbers for identification of individual and businesses in relation to the activities concerning the agencies. The Director General of Foreign Trade (DGFT) allocates Importer Exporter Code No. (IEC No.) for identifying importers and exporters, the Income-tax Department Issues the Permanent Account Number (PAN) for all Income-tax, Wealth Tax assessees, the Central Excise Department is also registering the various manufacturers and allocating a separate series of registration numbers. The RBI separately used to allocate a CNX number for identification of the exporters.

The main objective of allocating an alphanumerical number by the Government agencies is to identify the assessees/ exporters/ importers. It is also used to identify in some cases the concerned office where the person would be assessed or registered. Further an alphanumeric number helps in processing of the information relation to the assessee on computers.

A Working Group comprising officers of the different Departments had examined the feasibility of adopting a Common Identifier by the various agencies. It was observed that the assessee will be considerably benefited if he has to obtain just one identification number for use by the various Government agencies. With the Increasing import and export activity and universal extension of modvat, it has become necessary to develop linkages between the import transactions, the manufacturing activity and the export transactions. Besides, maintaining a complete profile of the person concerned, wherein the records of his conduct with any of the Government Departments could be ascertained, such a linkage can help in verification of availment of modvat, excise rebate on exports etc. Such a measure would be particularly helpful in introducing selective risk based assessment of import/ export transactions Instead of verification of each and every shipping bill or bill of entry. A common identifier would immediately help obtain an overall assessment of the assessee's credentials with different Government agencies. Various Government Departments particularly the DGFT, the Income-tax and the Customs and Excise Departments are presently engaged in computerisation of their operations. There is need to share information from the computers of one of the Departments with the other Departments. This exchange of information will be made easier if there are common Identification numbers.

It has been decided to adopt the Permanent Account Number issued by the Income-tax Department as the basis for the Common Identifier, PAN is a 10-digits alpha numeric code and can identify upto 96 crores business entitles. Apart from being unique (PAN is issued centrally and is generated by the computer system), it has the widest application (more than 2 crores assesses as against about 3 lakhs importers exporters using IE Codes and about 1.2 lakhs Central Excise assessees using ECC Number), Further, since It is not dependent on the location of the office of registration, it will not get modified on account of re-organisation of jurisdiction of the concerned Department/ offices.

As per the decision of the Government, PAN will be the only identifier for cross-referencing with the other Departments through each Department is free to use any internal codes which it may consider necessary.

ANNEXURE-II

Public Notice No. 39 dated 16^th November 1999

With a view to taking steps towards E-commerce, the DGFT office has launched a project for enabling the Importers/ Exporters to file their applications electronically. This would help the Ex- porters/ Importers in seeking status of their licence and other applications electronically. The connectivity between the DGFT and the Customs, to begin with, will facilitate exchange of information between the two organisations and will lead to substantial saving of time as logging of DEEC book will also take place electronically along with the Shipping Bill. This would be a forerunner to the establishment of EDI with other agencies (like Banks and Ports), which have an interface with the exporters. As a first step towards achieving this goal, it has been decided to set up a complete database of IE codes issued in favour of all the Importers/ Exporters.

In exercise of powers conferred under paragraph 4.11 of the Export and Import Policy, 1997-2002. as notified in the Gazette of India extraordinary, Part-II-Section 3-Sub-section (ii) vide S.O. No.283 (E) dated 31.3.97, the Director General of Foreign Trade hereby lays down the following procedure in the Handbook of Procedures (Vol.1) (RE-99), 1997- 2002 for changing/ updating the entries already made in the certificate for IEC code numbers issued so far by all the Regional/ Zonal offices.

1.      Open the home page at DGFT web site viz. http:// www.nic.in/ eximpol.

2.      Link IEC online addition/ Updation

3.      Rectify/ update the information already given.

4.      After making necessary corrections on the website, a hard copy would be sent to the concerned licensing authority for post verification.

5.      Help. if required, is also available on the website itself.

6.      No penalty is payable if the correction/ amendment is made before 31.12.99 in relaxation of the provision of paragraph 15.4 (b) of the Handbook (Vol.1).

7.      Help of service provider can also be taken for carrying out necessary addition/ Updation.

The consignments of imports and exports shall be cleared on the basis of the updated information collected through the above mechanism. In case the information furnished by the importer/ exporter does not match with the information available on the website, the Customs may not allow clearance on or after 1.1.2000.

All Exporters/ Importers will therefore furnish the complete information on the website followed by a hard copy to be submitted to the licensing authority which had issued the IEC number. A hard copy will have to be furnished even if the information on the website does not require a change. All IE Code holders will have to mention the PAN (Income Tax distinctive number) in the column provided for this purpose. This is a mandatory provision. Those who have not yet been allotted PAN are advised to apply to the concerned Income Tax authorities who have agreed to allot PAN to IE Code holders expeditiously..

In such cases where the information has been updated in the website but hard copy is not furnished, no verification of Updation shall be carried out by the licensing authority. Therefore, the updated information on the website has to be invariably followed with a hard copy.