How Bank Realization Certificate (BRC) differs from Foreign Inward Remittance Certificate (FIRC)

In this blog let us discuss the difference between the 2 concepts i.e., bank realization certificate and foreign inward remittance certificate. Frankly speaking, both the certificates are issued by an authorized bank to the customers who receive the funds or trade from foreign countries.

Now let us understand what is bank realization certificate?

Bank realization certificate (BRC) is a certificate that acts as a proof for the foreign export business. This document is very essential for a customer who wants to trade benefits under foreign trade policy. The Indian government handles the trade through the departments such as DGFT, RBI, FEMA, Customs etc.

The documents for BRC consist of the following details:

BRC number and date
Status of BRC
Importer Exporter Code (IEC)
Name of the exporter
Bank Code (IFSC)
Invoice ID
Bill ID
Shipping bill number, address, bill date, and currency code
Date of realization
Total realized value in INR
Name of the origin bank (which transact money)
City and country of the origin bank

So far we discussed the bank realization certificate. Now let us discuss what foreign inward remittance certificate (FIRC) is all about?

When funds are transferred through online payments like eBay, PayPal from foreign countries to India one might have come across the term “FIRC”. The authorized bank that receives the payment in India request for FIRC.

It is a security document that acts as evidence for inward remittance funds which pass into India. An individual recipient in India who receives the funds from overseas through their business or by fund transfer can use this document as evidence. Hence this certificate is very important to get your fund through wire transfer from other countries.

You may ask is there any special fee for FIRC certificate?

Yes, there is some amount of fee that has to be paid by the vendor. It varies from time to time and from bank to bank. It may take about 7-8 working days.

What details does a FIRC have?

Beneficiary name and account number
Name and address of the remitter
Fund sender and receiver addresses
Mode of payment by the remitter
Remitters cheque and DD number
Actual amount of foreign currency
Date of fund deposit

FIRC is issued by authorized banks for the exchange of foreign funds. Hope after going through this blog you must have got a fair idea about both the concepts and how they differ from one another.

What is an eBRC & Why Do Exporters Need It?

For people in the export industry, an eBRC (electronic Bank Realisation Certificate) is a critical digital certificate. It’s issued by a bank as proof that the exporter has received money from the customer for products or services exported.

The eBRC serves as confirmation of export. As a result, a service exporter claiming a GST refund – either for input tax credit (ITC) paid on inputs or integrated GST (IGST) paid on the export of services – must include the eBRC with their refund application to support their claim. This restriction solely applies to the export of services, not products. This is because the shipping bill is regarded a deemed application for GST refund when goods are exported. However, there is no need for a shipping charge when exporting services. As a result, an eBRC is required to serve as proof that services have been exported.

An eBRC is a valuable source of financial data and economic indicators, in addition to assisting exporters in obtaining export incentives under the Foreign Trade Policy and claiming GST refunds on services exports. To that purpose, the DGFT has negotiated data-sharing agreements with 14 state governments and two federal agencies. State governments used to demand eBRC for refunds of value-added tax or VAT until the introduction of GST in 2017. (an indirect tax that was later subsumed by GST).