Understanding AD Code

Understanding AD Code

What is AD Code?

An AD Code, which stands for Authorized Dealer Code, is a unique identification number assigned to entities by the Reserve Bank of India (RBI) in India. This code is primarily used in foreign exchange transactions and dealings with the RBI or other authorized banks.


The Code is printed on the bank’s letterhead which follows a format prescribed by the Directorate General of Foreign Trade (DGFT). This document is commonly referred to as the Bank AD Code letter. 



When is an AD Code Applicable? 

An AD Code, Authorized Dealer Code is applicable in the context of international trade and foreign exchange transactions, especially in India. Some instances when an AD Code is applicable:

Exporting Goods: When a business or individual in India exports goods to other countries, they need an AD Code to facilitate shipping bill filing, customs clearance, and foreign exchange transactions, including receiving payments for exports. 

Importing Goods: Similarly, when importing goods into India, entities may require an AD Code for Importers may also need an AD code when making payments for imports and obtaining a Bill of Lading. This code helps to ensure checks and balances in foreign exchange transactions related to imports.

Availing Government Benefits: Businesses that export goods may need an AD Code to avail themselves of various government benefits and incentives, such as duty drawbacks, exemptions, or GST refunds.

Bank Transactions: AD Codes are also relevant in banking transactions involving foreign exchange. Banks may require AD Codes for processing international payments, letters of credit, or other financial instruments related to foreign trade which are a vital part of any import-export business.

How to get an AD Code?

The Exporter/Importer has to reach out to their business bank partner and write a request letter to apply for an AD code. The Bank shall issue a letter to the Commissioner of Customs of the port involved, with the mention of the assigned AD code on the Bank’s letterhead in DGFT prescribed format. Once this letter has been obtained the Shipper needs to register their AD code on the ICEGATE portal for any master port (Air, Inland, Sea) to make them eligible to export.

How to register AD Code on ICEGATE

According to the CBIC vide Advisory No: 10/2022 dated June 14, 2022 AD Code registration across any Port is sufficient to carry out export activity from any port across the country. To get the registration on the ICEGATE portal the following steps are applied:

1) Log in to the ICEGATE portal
2) Click on the top right corner to select the profile 
3) Select role details <> Importer Exporter <> Add customs location
4) Select HQ-CBIC (INDEL4) and click on add location this will take you to a verification step where you can select to verify OTP by mobile or email
5) Now select Bank account option and select Bank Authorization/ AD code registration
6) Fill in the bank details, and customs location (INDEL-4). Attach a DSC-endorsed Bank AD Code letter along with a canceled cheque copy to generate IRN7) Click on submit and it will again require an OTP verification. Once done your application will be submitted and will go into review with customs.

It usually takes 24-36 hours to reflect an update Approved/Rejected at the discretion of the concerned authorities. If rejected you can check the reason by clicking on the information tab In such a case you may take corrective measures and resubmit the application.

To summarize, an AD Code is applicable whenever there is an involvement in cross-border trade or financial transactions, serving as a crucial identifier and regulatory compliance tool in the realm of international dealings, particularly in the Indian context.

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