Venturing into the world of international trade can be thrilling for exporters. But it also comes with many challenges. One of these challenges is GST refunds. However, fear not!
A FIRC can make all these things easier. But how? In this blog, discover what a FIRC is and how it can help your export business receive GST refunds.
A FIRC, also known as a Bank Realization Certificate (BRC), is an essential document issued by an authorized bank that verifies the receipt of payment for exports. It serves as proof of receipt of payment, but it also plays a crucial role in obtaining Goods and Services Tax (GST) refunds.
To obtain a FIRC, exporters need to follow a simple procedure:
1. Provide details to the bank: Exporters must share all the GST details with their bank, including the exporter’s name, address, export invoice details, and the amount of foreign exchange received.
2. Await payments: Once the exporter has shipped the goods or rendered services, they must wait for the overseas buyer’s payment receipt.
◦Provide FIRA to the bank: Once the exporter receives the payment, they must provide the FIRA to the bank. The FIRA is a document that confirms that the foreign inward remittance has been received. The bank issues the FIRA that the exporter used to receive the payment.
3. Request for FIRC: After providing the FIRA to the bank, the exporter can request the issuance of an FIRC. It is crucial to mention that the FIRC is required for GST refund purposes.
4. Collect FIRC: The bank will issue the FIRC, which serves as proof of receipt of payment. Exporters must collect this document and keep it safe for further use.
FIRA, Foreign Inward Remittance Advice, is a document that records an incoming foreign remittance. At Winvesta, once you receive money through your global collections account, we ensure prompt issuance of the Foreign Inward Remittance Advice (FIRA). You will receive your FIRA via email. With your FIRA, you can request your bank for a FIRC.
Now let’s delve into the GST refund process and how the FIRC plays a significant role:
1. Eligibility with FIRC for GST refunds: With a FIRC, exporters become eligible to claim GST refunds on their export transactions. This document serves as proof of receipt of foreign exchange and substantiates the export claim.
2. Fill GST refund application: Exporters need to fill out the GST refund application accurately. They must provide all the necessary details, including the FIRC number, export details, and other relevant information.
3. Verification of the GST refund application: Once the application is submitted, the GST authorities will verify it. They will cross-check the details provided with the FIRC and other supporting documents to ensure accuracy.
4. GST refund processed: After successful verification, the GST authorities will process the refund. The refunded amount will be credited to the exporter’s bank account.
To ensure a smooth GST refund process, exporters must follow these essential steps:
1. Ensure accuracy: It is crucial to provide accurate GST details on all required documents, including the FIRC. Any discrepancies may delay the refund process or even result in rejection.
2. Verify eligibility criteria: Before applying for a GST refund, exporters must ensure that they meet the eligibility criteria laid down by the GST authorities. Cross-checking all the requirements will prevent any unnecessary delays or rejections.
4. File GST refund application on time: Timeliness is crucial when it comes to GST refunds. Exporters must file their refund application within the prescribed time frame to avoid any penalties or delays.
5. Keep track of the application: Exporters must stay updated on its status after submitting the GST refund application. Regularly checking for updates and responding to queries from the GST authorities will help expedite the refund process.
Obtaining a FIRC for international transactions serves as proof of receipt of payment and simplifies the GST refund process for exporters. By following the correct procedure and ensuring accuracy in all documentation, exporters can enjoy a hassle-free refund experience.
With Winvesta offering FREE FIRA for international transactions, exporters can further streamline their processes. With Winvesta’s virtual multi-currency account, you can receive payments from 180 countries in 30+ currencies and withdraw earnings to INR in as little as 1 day, with rates starting at $3 + 0.99%!
Open your Winvesta account today!