What is AD Code: Full Form, Meaning, Importance, and Registration Process

Sanidhya Negi / November 23, 2024

The AD Code full form Authorised Dealer Code, plays a vital role in international trade. It connects exporters and importers with banks and customs authorities, ensuring smooth financial transactions and compliance with regulations.

AD Code is a unique identifier issued by banks, essential for generating shipping bills and accessing government incentives. For businesses venturing into global trade, the AD Code simplifies operations, strengthens transparency, and secures benefits. Registering this code is not just a regulatory requirement but a strategic step toward streamlined and successful trade practices. 

In this blog, we’ll explore everything about AD Code, registration process, and its importance.

What is an AD Code?

The AD Code, or Authorised Dealer Code, is a unique identifier crucial for international trade, especially for exports and imports. This code is issued by banks authorised by the central bank—such as the Reserve Bank of India (RBI) in India. It links the exporter or importer’s bank account with customs authorities. AD Code in export ensures smooth customs clearance and tracks foreign exchange transactions related to global trade.

An AD Code means a bridge between financial institutions, customs, and businesses. It ensures export earnings are credited correctly while complying with foreign exchange regulations. Mandatory for global trade, the AD Code also helps businesses access customs benefits and trade policies.

Importance of AD Code

Authorised Dealer Code is a critical identifier for businesses involved in international trade as it simplifies the processes and ensures compliance. The AD Code links exporters, importers, banks, and customs authorities, thus enabling smooth financial transactions and customs clearance. Here’s why it’s important. 

Essential for Customs Clearance: The AD Code is mandatory for generating a shipping bill, a document required for clearing goods through customs. Without it, exporters cannot move their shipments. For example, under the CSB-V (Courier Shipping Bill-V) system for commercial shipments up to INR 5,00,000, an AD Code is a prerequisite for smooth export processes.

Facilitates Foreign Exchange Tracking: The AD Code system allows the government to monitor cross-border currency transactions which helps in assuring economic stability. It helps regulators track foreign exchange inflows and outflows linked to export and import activities.

Unlocks Government Benefits: Businesses registered with an AD Code can access direct benefits, such as GST refunds, duty exemptions, and export incentives. These are credited directly to the bank account linked to the code by eliminating lengthy paperwork and delays.

Simplifies Trade Documentation: An AD Code is essential for key trade documents like the Shipping Bill, Bill of Lading, and Letter of Credit. It ensures accurate tracking of foreign exchange transactions, thus offering transparency in trade dealings.

Promotes Hassle-Free Trade: For startups and established businesses, the AD Code standardizes foreign trade operations. It simplifies the import-export process while helping the government maintain detailed records. AD Code promotes transparency and accountability in international commerce.

Step-by-step Guide To Get an AD Code

Registering for an AD Code (Authorised Dealer Code) is essential for businesses engaged in international trade. The process is simple yet requires careful attention to documentation and compliance. 

Open a current bank account: To begin, open a current account with a bank authorised by the central bank (such as the Reserve Bank of India) to deal in foreign exchange transactions. This bank will handle your AD Code registration.

Prepare Required Documents: Gather the necessary documents, including your business registration certificate, identity and address proofs of directors or proprietors, and the Importer Exporter Code (IEC). The bank might also request additional paperwork specific to your business or region.

Fill Out the Application Form: The bank will provide an application form for AD Code registration. Complete it accurately, so that all details about your business and its trade operations are correctly mentioned.

Verification by the Bank: Once your application and documents are submitted, the bank will verify them. This process may include compliance checks and background verifications to ensure adherence to foreign exchange regulations.

Receive the AD Code: After successful verification, the bank will issue your AD Code. It’s a unique 14-digit identifier linked to your current account, thus allowing international transactions.

Register the Code with the Customs: The final step involves submitting your AD Code to the customs authorities at all ports you plan to use for export or import. This registration allows smooth customs clearance and aligns your financial transactions with foreign exchange laws.

How to Register Your AD Code on ICEGATE

Registering an AD Code (Authorised Dealer Code) on the ICEGATE portal is an essential step for seamless customs clearance and international trade operations. The process to register your AD Code on ICEGATE is given below.

Visit the ICEGATE portal: Go to the official ICEGATE website. If you are a new user, create an account by registering for a user ID. Existing users can log in using their credentials, such as user ID and password.

Navigate to the e-Sanchit Section: After logging in, locate the Filing Services section. Click on the option titled e-Sanchit to proceed.

Upload Supporting Documents: Prepare the required documents for your AD Code registration, such as, PAN card details, GST certificate, IEC certificate, and Bank details. Upload the documents in the e-Sanchit section as per the provided guidelines. Once uploaded, the system will generate two reference numbers: Document Reference Number (DRN) and Invoice Reference Number (IRN). Note down these reference numbers for future use.

Go To Financial Services: Navigate back to the main ICEGATE portal page. Find the Financial Services section and click on it. 

Select Bank Account Management and AD Code Registration: Under Financial Services, choose the Bank Account Management option. From the next set of options, click on AD Code Registration to continue.

Complete and Submit the Registration Form: A form for AD Code registration will appear. Fill in the required details and submit the form. Your request will be processed.

Essential Documents needed For AD Code Registration

The set of documents required when registering your AD Code are mentioned below.

• Authorised Dealer code letter
• Bank Certificate as per Customs Public Notice No. 93/2020 dated 29/07/2020.
• GST Certificate Copy with seal and signature
• Company PAN Card Copy with seal and signature
• IEC Certificate Copy with seal and signature
• The company cancelled cheque
• Class 3 Digital Signature Certificate
• Director or Proprietor or Partner information (Copy of PAN Card or Voter ID or Aadhaar card or Passport)
• Export House Certificate (optional)

Conclusion

The AD Code is your passport to hassle-free international trade that allows for a smooth customs clearance, streamlined documentation, and access to government incentives. By registering your AD Code, you not only comply with essential regulations but also position your business for smooth global operations.

Don’t wait! get your AD Code today and take the first step toward hassle-free and efficient international trade.

FAQs

Ques: How To get AD code for my business?

Ans: To get an AD Code, start by opening a current account with a bank authorized to handle foreign exchange transactions. Then, submit an application along with required documents like business registration proof, identity and address verification, and your Importer Exporter Code (IEC). 

Ques: Is the AD Code a necessary document for exports and imports of goods?

Ans: Yes, AD code is a vital document for any business involved in exports or imports. It’s required for customs clearance and international financial transactions.

Ques: What are the consequences of not having an AD Code for my business?

Ans: Without an AD Code, your business may face delays in customs clearance, trouble receiving export payments, difficulty accessing export incentives, and issues with foreign exchange compliance.

Ques: Is AD Code valid for multiple ports?

Ans: Yes, an AD Code can be used at multiple ports, but you need to register it separately with customs at each port you use for exports or imports.

Ques: What is the validity of an AD Code?

Ans: An AD Code stays valid as long as your business account with the issuing bank is active.