IEC Compliance Issues Noticed During Post-Verification: What Businesses Need to Know
Many importers and exporters assume that once an IEC is issued, the job is done.
In reality, that’s where the real scrutiny often begins.
Over the last few months, a growing number of businesses have faced IEC suspension or inactivation after approval, usually during what DGFT calls post-verification. For some, this happens right before a shipment. For others, it shows up when incentives suddenly stop crediting.
This article explains what post-verification actually means, why IECs get flagged, and what businesses can do to avoid costly disruptions.
What Is IEC Post-Verification?
When DGFT issues an IEC, it is based on the information and documents submitted online. However, approval does not mean the details will never be checked again.
Post-verification is the process where DGFT:
Cross-checks IEC data with PAN, GST, bank, and Aadhaar records
Reviews compliance history and activity
Conducts digital or physical verification in selected cases
If inconsistencies are found, the IEC may be marked inactive or suspended until corrected.
Why DGFT Has Tightened IEC Checks
The main reason behind increased post-verification is misuse.
Over time, authorities noticed:
IECs taken without genuine business intent
Mismatch between GST, PAN, and IEC data
Incentives being claimed by non-compliant entities
To control this, DGFT systems are now tightly integrated with GST and banking databases. Any mismatch, even if unintentional, can trigger a compliance issue.
Common IEC Compliance Issues Found During Post-Verification
PAN, GST, and IEC Details Not Matching
This is by far the most common problem.
Examples include:
Business name difference between PAN and IEC
Proprietorship IEC but GST registered as partnership or company
Cancelled GST while IEC remains active
These mismatches often lead to automatic flags.
Address-Related Issues
DGFT verifies whether the business location actually exists.
Problems usually arise when:
Address is different across IEC, GST, and bank records
Office has shifted without updating IEC
Verification team finds the premises locked or non-traceable
Even a small mismatch can result in suspension.
Bank Account Validation Failures
IEC is directly linked to export incentive payments, so bank details are checked carefully.
Issues include:
Closed or inactive bank accounts
Account not in the IEC holder’s name
Incorrect IFSC or account number
When this happens, incentive payouts stop immediately.
Annual IEC Update Not Completed
Many businesses are unaware that IEC requires a mandatory annual update, even if no changes are made.
Skipping this step can automatically mark the IEC inactive.
No Import or Export Activity
IECs taken “for future use” often become problematic.
If there is no trade activity for a long period, the IEC may be selected for verification to confirm whether the business is genuine.
Physical Verification Failure
In some cases, physical verification is carried out.
Common reasons for failure:
Office closed during verification
No business signage
No proof of ongoing operations
This usually results in immediate suspension.
Digital Signature or Aadhaar Issues
Expired digital signatures, Aadhaar mismatches, or incorrect proprietor details can prevent businesses from responding to DGFT notices on time, worsening the situation.
What Happens If IEC Fails Post-Verification?
When an IEC is flagged or suspended, businesses may face:
Customs clearance delays or rejection
Export incentives like RoDTEP or duty drawback being blocked
ICEGATE errors during filing
Time-bound DGFT notices requiring clarification
Ignoring these notices can turn a temporary issue into a long-term suspension.
How IEC Compliance Issues Are Resolved
There is no shortcut.
Resolution usually involves:
Identifying the exact discrepancy on the DGFT portal
Filing an IEC amendment with correct details
Uploading updated and matching documents
Submitting a proper explanation within the deadline
DGFT decisions are based on data consistency, not verbal explanations.
How Businesses Can Avoid IEC Problems
Keep IEC, PAN, GST, and bank details aligned
Update IEC immediately after any business change
Complete annual IEC updates without delay
Maintain a traceable and functional business address
Avoid allowing third-party use or control of IEC
Preventive compliance is always easier than post-suspension recovery.
Final Thoughts
IEC is not a one-time registration. It is a living compliance record tied to multiple government systems.
Post-verification issues are increasing, and businesses that treat IEC casually are facing shipment delays, blocked incentives, and operational stress. Those who maintain clean and updated records rarely face disruption.
If an IEC issue arises, early correction makes a big difference.
Need help with IEC suspension, reactivation, or compliance review?
Timely action can prevent unnecessary losses and ensure uninterrupted trade operations.