Section 8 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 8 lets the Director General, or an officer the Director General authorises, suspend or cancel an Importer-exporter Code Number, but only after written notice, a chance to answer in writing and, if the person wants it, a hearing. In 2010 sub-section (1) was substituted and now has three grounds. This article explains it as per the Act as enacted in 1992 read with the 2010 Amendment Act.
The Code can be suspended or cancelled on three grounds: contravening the Act, its rules or Orders, the foreign trade policy, or specified customs, excise or foreign exchange laws or economic offences; acting in a manner prejudicial to India's trade relations or to the country's credit; or importing or exporting specified goods or services or technology in contravention. Notice, a written representation and, on request, a hearing come first. After suspension or cancellation a person may trade only under a special licence.
Section 8(1): who may act and on what grounds
The Director General "or any other officer authorised by him" may act where one of three conditions exists. The 2010 Act substituted sub-section (1); in 1992 only the Director General acted and there were two grounds.
| Ground | What the current text says |
|---|---|
| (a) | The person has contravened any of the provisions of the Act, any rules or orders made under it, the foreign trade policy, or any other law relating to Central excise, customs or foreign exchange, or has committed any other economic offence under any other law as specified by the Central Government by notification in the Official Gazette |
| (b) | The Director General or another authorised officer has reason to believe the person has made an export or import in a manner prejudicial to India's trade relations with any foreign country, or to the interests of other persons engaged in imports or exports, or has brought disrepute to the credit or the goods of, or services or technology provided from, the country |
| (c) | The person imports or exports specified goods or services or technology in contravention of the Act, its rules or orders, or the foreign trade policy |
What changed in 2010, point by point:
- Ground (a) now covers contravention of the Act, rules, Orders and the foreign trade policy themselves. The 1992 version dealt only with Central excise, customs, foreign exchange and other specified economic offences.
- Ground (b) now says "prejudicial" where the 1992 text said "gravely prejudicial", and extends to services and technology.
- Ground (c) is new and ties to "specified" items, defined in section 2(l).
The text under ground (a) leaves the list of "other economic offence" to a notification; that notification is not in the sources consulted, so no offence is named here. The 2010 Act was brought into force by notification; the date is not in the sources consulted.
The procedure the section requires
Once a ground exists, the officer may "call for the record or any other information from that person" and may suspend or cancel only:
- after giving a notice in writing informing the person of the grounds on which suspension or cancellation is proposed;
- after giving a reasonable opportunity of making a representation in writing within the reasonable time specified in the notice; and
- if the person so desires, after giving an opportunity of being heard.
An order of suspension must specify a period ("suspend for a period, as may be specified in the order"). Cancellation has no period. Because the Code is the key to all trade under section 7, skipping these steps would be a serious flaw in the order.
Example: Sagar Impex receives a notice saying the Director General believes it has contravened a specified customs law. The notice lists the grounds and gives 15 days (an invented period) to reply in writing. Sagar replies and asks for a hearing. Only after the reply and the hearing can the officer decide to suspend for a stated period or cancel.
If your Code is under notice, or you need to correct details, an IEC modification and update check can help you see where you stand before replying.
Section 8(2): the special licence
Section 8(2), as amended, says that where a Code has been suspended or cancelled under sub-section (1), "that person shall not be entitled to import or export any goods or services or technology except under a special licence, granted, in such manner and subject to such conditions as may be prescribed, by the Director General to that person". The 2010 change added "or services or technology".
Rule 3 of the Foreign Trade (Regulation) Rules, 1993 supplies the conditions: the Director General may grant a special licence having regard to two factors, and it is non-transferable. See rule 3 and rule 4.
Related: suspension for an unpaid penalty
Section 11(7), inserted in 2010, adds a separate route: the Code of a person who fails to pay a penalty may be suspended by the Adjudicating Authority until the penalty is paid or recovered. That route has its own text and does not use section 8(1); see our article on recovery under section 11.
Surrender versus cancellation
Section 8 is about action taken against the holder. A holder who simply wants to give up the Code uses a different route; our guide on how to cancel or surrender an IEC covers it. The Foreign Trade Policy 2023 also speaks of de-activation and penal action in paras 2.05(e) and 2.14 (in the copy consulted), which are policy provisions to be checked separately.
Need help with a Code that is under notice?
A notice under section 8 has a time limit for your reply, so it pays to act quickly and with the record in order. Our IEC modification and update team can help you review the details held against the Code. Later amendments to the Act, Rules and Policy should be checked.
Key takeaways
- Suspension or cancellation requires a written notice, a chance to represent in writing and, on request, a hearing.
- Since 2010 there are three grounds, including contravention of the Act, rules, Orders and policy, and dealing in specified items.
- Suspension must be for a specified period; cancellation is open-ended.
- Without a Code, trade is possible only under a special licence granted under rule 3 conditions.
- The 2010 text of section 8(1)(b) says "prejudicial", where 1992 said "gravely prejudicial".
Read next
- Section 7: the Importer-exporter Code Number
- Rules 3 and 4: special licence and application for licence
- Section 11: recovery of penalty, confiscation and redemption
- IEC modification and surrender
Disclaimer: Based on the Foreign Trade (Development and Regulation) Act, 1992 as enacted read with the Amendment Act of 2010, and on the Foreign Trade (Regulation) Rules, 1993 as notified read with the Amendment Rules of 2015, as consulted on 2 October 2026. Later amendments, the current Foreign Trade Policy and the Handbook of Procedures should be checked. This article is general information, not legal advice; check the official text before acting.