What is Foreign Inward Remittance Certificate (FIRC)? A Guide for Indian Exporters

As an Indian exporter, you are a significant contributor to the economy, strengthening it by bringing in foreign exchange. We congratulate you on your role in this. It is crucial for you to have a regular flow of money coming in for the goods you export.

A critical step in this process is ensuring you have the right documentation to back up the payments received as part of inward remittance service.

Foreign Inward Remittance Certificate (FIRC)/ FIRA, a crucial document for Indian exporters, serves as proof of payment received from abroad. Whether you are a service provider to offshore companies or export goods, FIRC is your gateway to a range of benefits and incentives, ensuring compliance with regulations, meeting taxation requirements, and facilitating auditing and accounting.

Why do Indian exporters need FIRC?

The Indian government offers multiple benefits for exporters in line with its ‘Aatmanirbhar’ and ‘Make in India’ initiatives. The idea is to improve our nation's self-sufficiency and promote the use of local products both in India and abroad.

As an Indian exporter, you must have FIRC for the following reasons:

1. Prove you got payment

You need FIRC to prove that you have received the payment due to you from suitable sources and in the country's currency. It adds credibility to your transactions.

2. Comply with regulations

Government and banking-related authorities have regulations around export-related transactions, and your FIRC will validate them.

3. Receive benefits and incentives

As an exporter, the government will offer you many incentives and benefits. To avail of these, you must provide the related documents, including the FIRC.

4. Taxation requirements

There are specific taxation regulations and benefits that you need to comply with as an Indian exporter, and one of these documents is FIRC.

5. Auditing and accounting

Since compliance and benefits have specific requirements, auditing and accounting rules for an Indian exporter will also require specific documentation.

6. Banking transactions

Often, the bank or financial institution that supports your business will also need to have all your export-related documents, and FIRC is one crucial document.

Now that we know why FIRC is essential to export documentation let’s look at how to get your FIRC or the process to follow.

How to get FIRC (Foreign Inward Remittance Certificate)?

The process to get FIRC is as follows.

1. Get the foreign remittance

Check your bank records to ensure that you have received payment from your client or customer for the services or goods delivered.

2. Reach out to your bank

Contact your bank to confirm the receipt of the foreign-related remittance and request the FIRC, as the bank will be issuing it.

3. Provide the requisite documents

The bank will ask you to submit some documents to start the process; these will include:

• A letter or application requesting the issuance of foreign inward remittance certificate
• Details like invoice number, amount received, date received, and the purpose of remittance
• A copy of the FIRA (Foreign Inward Remittance Advice) or a message that confirms the funds received
• Other documents that the bank will request from you

4. Pay fees if applicable

Your bank may charge fees to issue the FIRC; please check with the bank and pay them on time.

5. Follow-up and collect

Follow up with the bank to ensure the timely issuance of the foreign inward remittance certificate and collect it when the bank tells you the document is ready.

6. Verify and confirm

Since foreign inward remittance certificate is an essential document, please check and verify the details, including the received amount, currency, purpose of remittance, and the details of the remitter. Well, that was a simple process, wasn’t it? But you must have questions regarding terms like ‘EFIRC’ and ‘EFIRA’ and wonder what they mean.

EFIRC: This is the digital or electronic equivalent of the FIRC, which is efficient and convenient.

EFIRA: This is the initial confirmation of foreign exchange payment made through electronic media.

These documents are interchangeable with each other. We hope we have provided helpful information about foreign inward remittance certificates and guidance around FIRC. Want to streamline the process of receiving funds from abroad? Connect with us to learn how we can help.

Keep watching this space for continued information about export and foreign exchange-related topics that will be helpful in your export business.