- Compliance with regulations: The BRC is essential for complying with the Foreign Exchange Management Act (FEMA) and other export-related regulations in India.
- Claiming export incentives: Exporters need the BRC to claim various export incentives and benefits under government schemes like Duty Drawback, Merchandise Exports from India Scheme (MEIS), and Service Exports from India Scheme (SEIS).
- Proof of export payment: The BRC acts as a proof of receipt of payment for exported goods and services, which is crucial for maintaining accurate financial records.
- Customs reconciliation: It helps in reconciling the export transactions with the customs department, ensuring that the declared export value matches the realised amount.
- Financial credibility: Possession of a BRC enhances the financial credibility of an exporter, making it easier to obtain business loans and other financial assistance.
- Audit and verification: The BRC is required during audits and inspections by government authorities and financial institutions to verify the authenticity of export transactions.
Purpose of BRC
The primary purpose of a Bank Realisation Certificate (BRC) is to serve as an official proof of the receipt of export proceeds in the exporter's bank account. This document is crucial for several reasons:
Firstly, it ensures compliance with regulatory requirements laid down by the Foreign Exchange Management Act (FEMA) and other export-related regulations in India. The BRC verifies that the foreign exchange earned through exports has been duly received and recorded, which is essential for regulatory oversight.
Secondly, the BRC is indispensable for exporters to claim various incentives and benefits provided by the government under different export promotion schemes. These schemes, such as the Duty Drawback and Merchandise Exports from India Scheme (MEIS), require proof of realisation of export proceeds, which is facilitated by the BRC.
Furthermore, the BRC assists in maintaining transparency and accuracy in financial records, thereby aiding in the audit and verification processes conducted by government authorities and financial institutions. It also helps in reconciling the export transactions with the customs department, ensuring that the declared export value matches the realised amount.
Documents required for BRC
To obtain a Bank Realisation Certificate (BRC), exporters must provide certain key documents that verify the transaction and ensure compliance with regulatory requirements.
- Importer-Exporter Code (IEC): A unique registration number that is compulsory for all international trade activities.
- Shipping bill: The customs clearance document containing shipment details such as bill number, date, and port of dispatch.
- Export invoice: A record of the sale transaction between exporter and buyer, including the payment terms agreed.
- Bank account details: Information like IFSC code and account number of the bank receiving foreign currency payment.
- Business name and address: Proof establishing the exporter’s identity and place of business.
- Bill of lading/airway bill: Documentary proof of goods dispatched by sea (bill of lading) or by air (airway bill).
How is a BRC issued?
- Application submission: The exporter submits an application to their bank, requesting the issuance of a BRC. This application must include all relevant documents such as the export invoice, shipping bill, and FIRC.
- Document verification: The bank verifies the submitted documents to ensure that the export proceeds have been received and are compliant with regulatory requirements.
- Cross-checking customs records: The bank cross-checks the details of the export transaction with the customs records to ensure that the declared export value matches the amount received.
- BRC generation: Upon successful verification, the bank generates the BRC, which includes details such as the exporter's name, invoice number, amount received, and date of receipt.
- Issuance to the exporter: The bank issues the BRC to the exporter, who can then use it for regulatory compliance and to claim export incentives.
- Record maintenance: The bank maintains records of all issued BRCs for future reference and audit purposes.
Benefits of BRC
- Regulatory compliance: Ensures exporters comply with the Foreign Exchange Management Act (FEMA) and other export-related regulations.
- Export incentives: Enables exporters to claim various government incentives and benefits like Duty Drawback and MEIS.
- Financial proof: Provides official proof of receipt of export proceeds, aiding in accurate financial record-keeping.
- Customs reconciliation: Helps in reconciling export transactions with customs, ensuring declared values match received amounts.
- Enhanced credibility: Boosts the financial credibility of exporters, making it easier to obtain business loans and financial assistance.
- Audit support: Facilitates audit and verification processes by government authorities and financial institutions.
- Improved transparency: Enhances transparency in export transactions, reducing the risk of discrepancies and fraud.
- Business growth: Supports the growth of export businesses by ensuring timely receipt of payments and compliance with regulations.
Uses of BRC (Bank Realisation Certificate)
The Bank Realisation Certificate (BRC) serves two primary functions: ensuring compliance with DGFT regulations and enabling exporters to claim export benefits and incentives.
To comply with DGFT regulations
The DGFT (Director General of Foreign Trade) regulations require exporters to generate a BRC as proof of receiving payment from international clients. This helps document and report foreign earnings to the government, ensuring exporters meet compliance standards.
To claim export benefits and incentives
The BRC is essential for claiming benefits under schemes like the Merchandise Exports from India Scheme (MEIS) or the Service Exports from India Scheme (SEIS). Under these schemes, exporters are eligible for duty credit scrips, which can be used to offset costs such as customs duties or central excise duties. The credit scrip value ranges from 2%-5% of the free-on-board value for MEIS, and 3%-5% of the net foreign exchange for SEIS.
How to download the Bank Realisation Certificate?
To access the e-BRC certificate, follow these steps:
- Visit the DGFT website and log in to your account.
- Go to the 'My Dashboard' section and select 'Repositories'.
- A new page will open. Click the 'Explore' button under the 'Bills Repositories' tab.
- In the next page, click on the 'Select Bill' tab and choose the 'Bank Realisations (e-BRC)' option.
- Set the date range by selecting the 'From Date' and 'To Date', then click 'Search'.
- You will now see a list of e-BRCs uploaded by the bank. Select the relevant certificate to either download or print it.
Bank Realisation Certificate format
The e-BRC downloaded from the DGFT website follows this format. All the details are electronically filled in by the bank and submitted to DGFT.
How to utilize your Bank Realisation Certificate to claim incentives?
Here’s a step-by-step guide to using the BRC to claim incentives for exporting goods to an overseas buyer:
- Submit all shipment bills through the Indian Customs Electronic Data Interchange Gateway (ICEGATE) platform.
- ICEGATE will automatically share the bill details with the DGFT. Be sure to link the appropriate shipping bill to the e-BRC in order to claim export benefits.
- The DGFT will assess the FOB (Free On Board) value, which is calculated by adding the ex-factory cost to additional expenses such as transportation and customs clearance. If multiple products are involved, the DGFT will consider the consolidated realisation value and offer incentives based on the lower of the two values.
- Verify that the bank has submitted an accurate e-BRC reflecting the consolidated realisation value. Also, remember that freight, insurance, and commission values are excluded from the e-BRC, so ensure you include these values in your refund application.
Difference between BRC and FIRC
Feature
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Bank Realisation Certificate (BRC or e-BRC)
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Foreign Inward Remittance Certificate (FIRC)
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Primary Purpose
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Certifies that a foreign payment is linked to a particular export of goods or services.
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Serves as proof of any foreign remittance credited into an Indian bank account.
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Scope of Application
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Issued only for export proceeds tied to specific export documents like a shipping bill or SOFTEX form.
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Issued for all types of foreign receipts, including export advances, freight charges, or consultancy fees.
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Issuance
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Generated electronically by the bank (e-BRC) after verifying the remittance with export documents.
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Issued by an Authorised Dealer (AD) bank whenever an inward remittance is received.
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Current Format
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Fully electronic, uploaded directly to the DGFT portal.
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Physical FIRCs are rare and used mainly for capital transactions (like FDI); for trade, issued electronically as FIRA.
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Relevance for Exporters
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Essential for claiming export incentives under the Foreign Trade Policy (FTP), including GST refunds and RoDTEP benefits.
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Confirms receipt of foreign payment; needed for GST refunds, but BRC is mandatory for most export incentives.
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Conclusion
In summary, the Bank Realisation Certificate (BRC) is a critical document for exporters, serving as proof of payment receipt for exported goods and services. Its importance extends to regulatory compliance, claiming export incentives, and enhancing financial credibility. By understanding the purpose, benefits, and issuance process of the BRC, exporters can streamline their operations and ensure smooth financial transactions.
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