Explore FIRC's significance: legal proof, tax benefits, transparent transfers. Essential for exporters. Learn more about this vital document.
If you're involved in exporting goods & services from India to other countries or an India-based freelancer providing services abroad, your work likely entails cross-border money transfers. These transfers include receiving payments from overseas, and as a result, you need a crucial document known as the Foreign Inward Remittance Certificate (FIRC). This document serves as undeniable proof of the international payments you receive.
Acquiring the FIRC involves a simple process. Once the beneficiary, who is the recipient of the foreign remittance, receives the transfer in their bank account, they apply for the FIRC. They clearly state the purpose of the remittance, and based on this information, the Authorized Dealer (AD) of the Reserve Bank of India (RBI), typically the bank through which the international payments are credited, issues the FIRC.
In this article, we'll delve into the significance of the FIRC and explore its types.
Foreign Inward Remittance Advice (FIRA) For foreign transfers not covered by the above categories, businesses can apply for Foreign Inward Remittance Advice (FIRA). This advice is legal proof of international payments from exporters or freelancers.
To obtain a FIRA, the beneficiary requests the partner bank responsible for processing the cross-border transfer, providing essential details such as account number, transfer amount, purpose, and transaction date. After bank verification, the information is uploaded to EDMPS, generating an IRM number for the beneficiary to download the advice.
Information within the FIRC (Foreign Inward Remittance Certificate) contains the following details:
In conclusion, the Foreign Inward Remittance Certificate holds immense importance in inward remittances from foreign banks. Exporters and freelancers should diligently obtain this certificate for each cross-border transaction.
Inkle, for instance, offers a free FIRA for intercompany cross-border money transfers to Indian bank accounts in US Dollar which is downloadable from the TP Payments dashboard within 24 hours of settlement.
According to RBI and FEMA provisions, the first Indian bank receiving the foreign currency inward remittance is responsible for issuing the Foreign Inward Remittance Certificate. This is due to its possession of crucial details about the overseas bank that initiated the foreign exchange transfer.
Both the Bank Realisation Certificate (BRC) and the Foreign Inward Remittance Certificate (FIRC) are issued by Authorized Dealers (ADs). However, while FIRC is issued against receiving international payments, the BRC is based on specific documents encompassing a distinct purpose and scope.
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