eFIRC, FIRC, BRC: Understanding Essentials and Differences
Navigating compliance requirements for Indian exporters can be confusing, especially with overlapping concepts like FIRC, FIRA, eFIRC, and BRC. In this blog, we'll break down what each of these terms means and how they differ.
Understanding FIRC
FIRC or its full form Foreign Inward Remittance Certificate, is a document issued by banks as proof of receiving international payments. Until 2016, as per RBI regulations AD Category I Banks were authorised to issue FIRCs to exporters for receiving international payments.
For exporters, it served not just as a proof of foreign transfers but also as a key document for claiming export-related incentives, like tax benefits and Duty drawbacks.
In 2016, the Reserve Bank of India introduced the Export Data Processing Management System (EDPMS) to digitize and streamline all export-related data. With this shift, the RBI updated its guidelines, instructing banks to stop issuing FIRCs (Foreign Inward Remittance Certificates) for foreign currency received against the export of goods. Instead, banks now provide FIRAs (Foreign Inward Remittance Advice) for export collections.
You might come across different terms like FIRA, FIRS (Foreign Inward Remittance Statement), or NOC (Non-Objection Certificate), depending on your bank. But don't worry—they all serve the same purpose. Along with proving that you’ve received foreign payment from international clients, FIRAs are crucial for closing EDPMS, receiving export-related benefits and claiming GST refunds.
Authorities still issue FIRCs, but only for specific financial transactions, such as receiving Foreign Direct Investment (FDI) or Foreign Institutional Investment (FII). So, if you're receiving returns from foreign investments, you'll still need a FIRC from your bank.
So, What do I need, FIRA or FIRC?
FIRA is often still referred to by its old name, FIRC. While both documents serve the same purpose, FIRC is technically only issued for returns on Foreign Direct Investment (FDI )or Foreign Institutional Investment (FII). For all other export collections, FIRA is what you need.
What is eFIRC?
As an exporter, or someone stepping into the world of exports, there's another term you’ll want to understand: eFIRC. At first, it might seem like just the digital version of FIRC or electronic FIRC, and you may even come across platforms that refer to digital FIRA or FIRC as eFIRC. However, that interpretation isn’t entirely accurate. Let’s take a moment to clarify what eFIRC actually is:
- To start with, eFIRC isn’t a document or certificate; it’s actually a unique number issued by the relevant bank on the EDPMS, the government’s export portal.
- eFIRC typically is relevant for exporters of goods or software. When the said goods are shipped or software is delivered, a shipping bill or SOFTEX form (a certification required by the RBI for software exports) is recorded in the EDPMS system.
- Now, for those exporters, an eFIRC usually comes into the picture when an export payment or foreign exchange transaction is received by a bank different from their main bank (the one where the exporter submits their documents).
Let’s break this down with an example:
Imagine you export handicrafts overseas and have accounts with two banks in India, Bank A (your main bank) and Bank B (secondary bank). You use your main bank, Bank A, to handle your export paperwork. However, you receive the foreign payment in your secondary account with Bank B. Bank A has proof that you exported goods, but no record of the payment being received.
An eFIRC acts as the go-between in this scenario. Bank B, which received the payment, will issue an eFIRC for Bank A to close the Shipping Bill (for goods) or SOFTEX (for other transactions) on EDPMS. Bank A can then view the eFIRC number on the EDPMS platform and close the record after with eBRC is generated.
- In essence, eFIRC connects the dots between the paperwork and the payment, even if they go through different banks, ensuring everything is in line with regulatory requirements.
What is BRC?
While talking about eFIRC, we discussed how exporters need to submit their export details and documents to update their EDPMS records and receive an eBRC. Now, let's dive into what a bank realisation certificate or BRC is.
BRC or its digital version eBRC is another important regulatory compliance document that is relevant for exporters, particularly goods and software exporters covered under SOFTEX. e-BRC is a digital certificate issued by a bank that serves as proof that an exporter has received payment against the specific goods or services sold abroad. e-BRC makes it easier to demonstrate your earnings, access government benefits, and file taxes.
So, now it begs the question: what is the difference between BRC and FIRC? Both of them seem to serve the same purpose of being proof of international payments. Now, while there’s some truth to it, there are some key differences between the two:
Difference between FIRC and BRC
- BRC serves as proof that you, an exporter, have received foreign funds from the overseas buyer/client for the goods or services sold abroad.
- While the FIRA/FIRC validates and confirms export payments, the BRC serves as the second step by confirming that the payment received corresponds to the goods exported.
- Once exporters obtain their FIRC/FIRA, they need to submit it to their partner bank. The bank then verifies the payment details, matches them with the exported goods through the shipping bill or SOFTEX form, and upon successful validation, generates the eBRC which you can download from DGFT website.
- If you are a goods or software exporter, you would need e-BRC not only for compliance purposes but also to claim benefits offered by the Indian government under the Foreign Trade Policy (FTP).
We understand that navigating through these complex compliance requirements can be a challenge even for the most seasoned exporters. This simple decision tree will help you understand which documents you will need under different circumstances.
eFIRC, FIRC and BRC: Understanding the Key differences
We have gone through each of the three concepts individually to get a better grasp of them. Now let’s quickly compare the three to understand how exactly they are different from each other:
| eFIRC | FIRC now FIRA | eBRC | |
| what is it? | A unique number issued on EDPMS when an exporter generates eBRC with their bank but has received export collection in their other bank account | A document issued s on bank’s stationery as proof of receiving international payments. However, since 2016, banks issue FIRA for export-related payments. FIRC is now only issued for specific transactions like FDI or FII. | eBRC confirms that an exporter has received foreign funds and ties them to the specific goods or services sold. While FIRA/FIRC confirms the receipt of export payments, eBRC goes a step further by linking the payment to the actual goods or services exported. |
| Who is it for? | Applicable for all goods exports and software exportrs covered under SOFTEX | Applicable for all kinds of exporters | Applicable for all goods exports and software exports covered under SOFTEX |
| Why is it needed? | For EDPMS closure, generating eBRC | Important for claiming GST refund, EDPMS closure, generating eBRC | Important for claiming benefits under various export schemes by the government |
Parting Thoughts
With cross-border trade on the rise, staying compliant and secure is more important than ever. But at Skydo, we want you to focus on growing your business, not stressing over compliance.
With Skydo, enjoy seamless international payments, delivered promptly and without any hidden fees. But that's just the beginning! Every time you receive a cross-border payment, an auto-generated FIRA is readily available for you to download, relieving you of compliance burdens so you can devote your energy to what truly matters: driving your business forward.
What is the difference between BIRC and FIRC?
eBRC confirms that an exporter has received foreign funds and ties them to the specific goods or services sold. While FIRA/FIRC confirms the receipt of export payments, eBRC goes a step further by linking the payment to the actual goods or services exported.
What is FIRA?
