What is AD Code (Authorised Dealer Code)?
An authorized dealer (AD) is a company or entity that has official permission to sell the product of another company. They primarily become distributors of an established brand. All authorized dealers are required to get an AD code after getting registered for import and export of foreign goods.
What Is Authorised Dealer Code?
The AD code is an abbreviation for Authorised Dealer Code. It is a 14-digit code which is obtained from the bank where the dealer has its current account. It is one of the primary documents that dealers require to get through the customs clearance process after import-export registration.
A dealer will be required to get an AD code for every port to get customs clearance. The government introduced this system to keep track of the dealers who trade using foreign currencies.
Why Does the Exporter Need the Authorised Dealer Code?
Exporters need to obtain an AD code to get the shipping bill number for their shipment. The shipping bill number is important to get customs clearance for a particular shipment. The Electronic Data Interchange System of the Indian Customs Electronic Gateway (ICEGATE) prohibits generation of shipping bills in absence of an AD code.
Also, if a dealer is entitled to any government benefits, the Authorised Dealer code registration will enable a straight deposit of such benefits into his/her account.
What Is the Importance of AD Code?
Here are some of the benefits of AD code which make it important for import-export business:
· It helps the government keep track of trades involving foreign currency, which ensures a stable economy.
· Without it, the trader won’t be able to generate a shipping bill which is mandatory for customs clearance.
· AD code also enables straight deposit of government benefits into the exporter’s bank account.
If you are planning to set up a start-up, it is important for you to know what AD code is and how AD code works. Generating an AD code aims to provide dealers with a hassle-free import-export process and helps the government keep track of dealers who engage in foreign trade.