IEC vs GST Registration for Exporters: What Each Does and When You Need Them
IEC vs GST for exporters: IEC is a one-time ₹500 DGFT code updated yearly; GST registration enables zero-rated exports under LUT. Most need both.
Short answer
Most goods exporters need both. The Importer Exporter Code from DGFT is the customs identity needed to clear imports and exports and to claim trade policy benefits; it costs ₹500 once but must be updated every year. GST registration lets you export as a zero-rated supply under a Letter of Undertaking without paying IGST, or claim refunds of input tax.
- IEC issued by
- DGFT, linked to PAN
- IEC fee
- ₹500, one-time
- IEC annual update
- Between April and June each year
- Exports under GST
- Zero-rated supplies
- Export without IGST
- Under LUT in GST RFD-11, filed each year
- Service exporters' IEC
- Needed mainly to claim trade policy benefits
What does each registration do?
The Importer Exporter Code is a 10-character code issued by the Directorate General of Foreign Trade, based on the business's PAN. Customs systems need it to file shipping bills and bills of entry, banks use it for foreign exchange transactions, and DGFT schemes use it to grant export incentives. It does not expire, but it must be updated online every year between April and June, or it is deactivated until updated.
GST registration is a tax identity. Under the IGST Act, exports of goods and services are zero-rated, which means you can either export without paying IGST under a Letter of Undertaking and claim a refund of input tax credit, or pay IGST and claim a refund of that tax. Without GST registration, neither route is available and GST on your inputs becomes a cost.
Side-by-side comparison
The table compares the two registrations from an exporter's point of view. Both are online and PAN-based, but they serve different authorities and cannot substitute for each other in any situation.
| Factor | IEC | GST registration |
|---|---|---|
| Authority | DGFT | GST department (CBIC and states) |
| Purpose | Customs and foreign trade identity | Tax registration and zero-rating |
| Fee | ₹500 once | Nil |
| Validity | Lifetime, with annual update | Until cancelled |
| Annual action | Update IEC details April to June | File returns; renew LUT each year |
| Needed for goods exports | Yes, for customs clearance | Generally yes |
| Needed for service exports | Only to claim trade policy benefits | Below threshold optional, but needed for LUT and refunds |
| Returns | None | GSTR-1 and GSTR-3B, monthly or quarterly |
| Refunds | Not applicable | Refund of ITC or IGST on exports |
When do you need each?
Goods exporters need an IEC for customs clearance, subject to limited exemptions such as certain government bodies and personal use. Service exporters do not need an IEC for receiving payment from abroad, but need one to claim benefits under the Foreign Trade Policy.
For GST, exports of goods are treated as inter-state supplies, so goods exporters generally need GST registration. Service exporters below the registration threshold are not compelled to register, but many register voluntarily to file an LUT, recover GST paid on inputs and look credible to overseas clients.
What are the common mistakes?
The most frequent issues are a lapsed IEC because the annual update was missed, an expired LUT because it was not filed for the new financial year, and mismatches between the IEC, GST and bank details, which can hold up IGST refunds on shipping bills. Keep the legal name, address and bank account identical across DGFT, GST and customs records.
Which should you choose?
Exporters rarely choose one over the other. Use these rules to decide what to obtain and when, based on what you export, where you ship and how you are paid.
- Exporting physical goods: get both IEC and GST registration before the first shipment.
- Exporting software or consulting services: GST registration with an LUT; IEC only if you will claim trade policy benefits.
- Small service exporter below threshold: voluntary GST registration usually pays for itself through LUT and refunds.
- Importing goods for business: IEC is required; GST registration lets you claim credit of IGST paid at import.
- Every April: update IEC and file a fresh LUT.
Related services
Sources
- DGFT mandates annual IEC updation to avoid deactivation (Taxscan)
- Do I need an IEC to export from India? (CalcGuru)
- GST registration requirements under sections 22, 23 and 24 of the CGST Act (TaxGuru)
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Is IEC mandatory for service exporters?
Not for receiving export proceeds. It is needed if the service exporter wants to claim benefits under the Foreign Trade Policy.
Does IEC need renewal?
It does not expire, but it must be updated online every year between April and June. If not updated, it is deactivated until the update is done.
Can I export without GST registration?
Service exporters below the threshold can, but they cannot file an LUT or claim refunds. Goods exporters generally need GST registration.
What is an LUT in GST?
A Letter of Undertaking filed in GST RFD-11 lets a registered exporter export without paying IGST. It is valid for one financial year and must be filed again each year.