What is FIRC (Foreign Inward Remittance Certificate)?
A FIRC (Foreign Inward Remittance Certificate) is a document that acts as proof of a foreign exchange inflow transaction. In India, approved banks provide FIRC to Indian residents who receive foreign funds in their accounts. The FIRC is a critical document for firms and people who receive foreign currency payments. It acts as proof of money receipt and that can be used for a wide range of purposes, which would include tax returns, regulatory compliance, and providing documentation of foreign exchange earnings for export-related transactions.
Categories of FIRC
Foreign Inward Remittance Certificates are classified into two types:
Physical FIRC
Physical FIRCs are paper-based certificates issued by acknowledged banks.
E-FIRC
The E-FIRC is an online-accessible digital certificate. It would be a more convenient choice since it does not require physical copies and can be retrieved from everywhere all the time.
How to apply for a Foreign Inward Remittance Certificate?
The following procedures are involved in the request for a Foreign Inward Remittance Certificate (FIRC):
- Following RBI requirements and the bank from which the remittance has been issued in India.
- The recipient must make a request to their bank for the FIRC with the following information.
- Account number
- Transfer Amount
- Date of transfer
- Purpose of transfer
- UTR Number details
- Receiver Details
- The FIRC is issued when the bank checks the transaction data.
- The recipient can obtain a physical FIRC from the bank or access the E-FIRC online.
What information does the Foreign Inward Remittance Certificate Format contain?
The FIRC has the following information:
- The name and address of the remitter.
- The purpose of the remittance.
- The amount received in foreign currency.
- The exchange rate applied for converting the foreign currency into the local currency.
How to obtain an E-FIRC online?
To obtain an E-FIRC online, the receiver must complete the following steps:
- Access the authorized bank’s website.
- Navigate to the FIRC section and choose the appropriate transaction.
- Enter the required information and submit the request.
The bank inspects the details and issues the E-FIRC.
The FIRC is issued by recognized banks in accordance with the Reserve Bank of India’s (RBI) standards. The FIRC is required for GST compliance considerations when exporting services.
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Procedure for Issuing FIRCs Notifications
The RBI has issued notifications outlining the procedure for issuing FIRCs, and authorized banks must abide this guidance. The guidance are as follows:
- Details on the FIRC’s format.
- The data to be included in the FIRC.
- The timeline by which the FIRC must be provided.
What is the distinction between a FIRC (Foreign Inward Remittance Certificate) and a BRC (Bank Realization Certificate)?
There are distinctions between the FIRC and the Bank Realization Certificate (BRC). The BRC is issued to exporters and acts as proof of payment for items exported. In contrast, the FIRC is granted to residents who receive foreign funds in their accounts.
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Finally, the Foreign Inward Remittance Certificate (FIRC) is a critical document for firms and people receiving foreign exchange payments in India. The FIRC serves as proof of funds receipt and can be utilized for number of purposes, such as including tax returns, regulatory compliance, and verification of foreign exchange earnings for export-related transactions. The issuance of the FIRC is subject to RBI guidelines, and authorized institutions must follow these guidelines. Because it eliminates the necessity for physical copies and therefore can be accessed online, the E-FIRC is a more sensible option for recipients.
