International payments have helped many Indian businesses survive the market uncertainty caused by COVID-19. Driven by growing international demand for Indian products and services, Indian exports have already crossed $300 Billion in value in April-December 2021, a nearly 50% increase from the same period in 2020. For Indian SMEs in particular, selling to global audiences has become very rewarding.
In order to keep up with this growth and to further simplify the cross-border payment experience for our customers, Razorpay has recently launched a much-awaited feature among Indian businesses accepting cross-border payments: Automated Digital FIRC.
What is FIRC?
Foreign Inward Remittance Certificate i.e. FIRC is proof that your business has accepted a foreign payment from outside India into an Indian bank account. It is issued by an Authorized Dealer bank and is recognised by compliance authorities.
When is it useful? What are the use cases?
A few cases where businesses use FIRC are:
- Proof of share purchase: If you’re issuing shares to a foreign person or entity, an FIRC serves as proof that the share application money was received. An FIRC also demonstrates proof of share purchase between a resident Indian and a non-resident buyer.
- Rebates or exemptions on Service Tax: When a business is into exporting services, it doesn’t have to pay Service Tax as per export of services rules. Here again, FIRC becomes a documentary proof for exports made and remittances received.
- Export promotion schemes: In export promotion schemes like Advance Authorisation / Advance Licence, EPCG (Export Promotion Capital Goods), etc., FIRC is one of the most important documents to be submitted to the Directorate General of Foreign Trade (DGFT) as proof of export.
In short, the FIRC document is essential for businesses accepting international payments, both to receive tax benefits and to manage compliance.
Here’s a sample FIRC document for your reference:
Why is Digital FIRC a Big Deal?
Even today, some businesses have to physically visit a bank, complete tedious formalities, and submit a fee to get the FIRC document. Even then, it takes the banks up to 45 business days to generate a FIRC! That’s a long wait time and a cumbersome process to execute every time one wants to claim a tax exemption!
How is Razorpay making FIRC easy for businesses?
With its newly launched automated FIRC feature, Razorpay will help businesses download their FIRC document in a single click. Here’s the best part: this new Razorpay feature is absolutely FREE!
“Download a digital FIRC every month right off your dashboard – no manual effort required, no tickets to be raised, and at no additional cost!”
Here’s how you can get your FIRC document:
- Open your Razorpay dashboard
- Visit ‘My Account’ Section
- Click on the ‘Download’ button at the end of the ‘Profile’ section to select the month and view/download your FIRC
The one-click FIRC generation process will allow you to focus on your business and let Razorpay handle the financial complexities for you.
Razorpay is actively working on creating more international payment features, so you can focus on growing your international business. In the next few months, watch out for best-in-class international payment success rates, additional risk capabilities, and the introduction of alternative payment methods to greatly improve the experience of your international customers.
Looking to take your business to global shores? Consider Razorpay! If you are an existing Razorpay user, please visit your dashboard for more details.