Foreign Inward Remittance Certificate (FIRC) is a document that is a must for all the remittance that comes into a country. This document works as a proof that money has been sent from a foreign country. When someone receives money from a foreign country, it is mandatory for him to have an authorized bank account. This money is then transferred to his account with the help of a dealer, and it is generally authorized by the central bank of the home country.
However, when an individual does not have Foreign Inward Remittance Certificate, he will have to go through a lot of troubles. If any amount of shares is to be sent on the name of the company or a person that doesn’t belong to the home country, then he will require a FIRC as proof. In cases, where a person from the home country transfers or sells the shares to a person outside the home country, the availability of FIRC proves that such a transaction has been made. Even in case of Advance Licence and EPCG, FIRC needs to be submitted to DGFC.
If an individual or a company intends to export a service from the home country to a foreign country, no service tax can be levied on such export according to the regulations set for export of services. When remittance is received by export of such service, FIRC would be the only document that would legalize such income from the export transaction.
Since Foreign Inward Remittance Certificate is an important document, a number of details are mentioned in the document. It contains the name of the beneficiary, the name and address of the remitter, the mode of payment used for the transaction (bank transfer or cash), amount of money in foreign currency, existing exchange rate, purpose of such remittance, and other few details. It is a proof of foreign income.
The above mentioned details shows the importance of FIRC when anyone receives money from a foreign country. The purpose of such remittance has to be mentioned correctly as the receiving banks usually cross checks the details.