An eBRC (electronic Bank Realisation Certificate) is an extremely important digital certificate for those in the export business. It is issued by a bank as confirmation that the exporter has received payment from the buyer against the export of goods or services.
As an exporter, why do you need an eBRC? In this piece, we will not only answer this question but walk you through the eBRC process as well as your role in it. Read on to know:
In simple terms, an eBRC is proof of export. To fully understand it, though, one must first understand its purpose.
An exporter needs an eBRC to avail of the various export incentives (duty exemptions, subsidies, low-cost loans, etc) offered by the government as part of its Foreign Trade Policy (FTP). In India, the FTP and many of the export incentives it highlights are formulated and implemented by the Directorate General of Foreign Trade (DGFT). The DGFT also implements the eBRC platform, which allows banks to electronically upload to the DGFT server all foreign exchange realisation-related information related to exports. This information is transmitted through a digital certificate – the eBRC.
Before the DGFT introduced the eBRC platform in 2012, the process was entirely manual. The exporter had to visit their bank and request a Bank Realisation Certificate (BRC), which the bank provided in physical form. The exporter then submitted the BRC to the DGFT regional authority. The BRC details were entered manually in a DGFT application. This made the process of applying for export incentives lengthy and inconvenient. The eBRC did away with the need for a physical BRC as well as for the exporter to visit the bank or DGFT authority.
Here’s a flow chart of how the eBRC process works:
Once an eBRC is successfully uploaded to the DGFT server, it cannot be amended. If you notice an error in your eBRC when checking its status, you must contact your bank to have it rectified. Here’s how the process works:
When an exporter claims export incentive under a DGFT scheme, the DGFT decides on the value on which incentive is to be provided by matching the FOB (Free on Board) value of the goods exported, as contained in the shipping bill, and the total realised value against export, as mentioned in the eBRC. Whichever of the two is lower forms the basis on which incentive is granted.
In India, the shipping bill (also called a bill of export) is generated electronically on Icegate, Indian Customs’ electronic data interchange (EDI) platform. It includes relevant details from the commercial invoice and packing list, two other documents critical to exports. The information contained in the shipping bill is automatically and electronically shared by Icegate with the DGFT, which it stores in a repository on its server. To claim an export incentive, an exporter must merely link the relevant shipping bill with the eBRC.
If the shipping bill has multiple products, the consolidated realisation value or FOB value, whichever is lower, is proportionately distributed among the various products based on a Multiplication Factor. Multiplication Factor M = FOB value actually realised in Rs as per eBRC / FOB value as per shipping bill.
As an exporter, there are two things to pay attention to when applying for an export incentive:
An eBRC is proof of export. So, an exporter of services claiming a GST refund – either of input tax credit (ITC) paid on inputs or on integrated GST (IGST) paid on the export of services – must attach the eBRC with the refund application to support their claim. This requirement applies only to the export of services and not of goods. This is because, in the export of goods, the shipping bill is itself considered a deemed application for GST refund. But in the export of services, no shipping bill is required. Hence, the need for an eBRC to serve as evidence that export of services has taken place.
In 2016, the DGFT signed a memorandum of understanding (MoU) with the GST Network (GSTN) for the integration of eBRC with GSTN. This paved the way for the sharing of foreign exchange realisation and IEC data. The objective was to strengthen the processing of export transactions under GST, make the process more transparent and reduce human interference.
Apart from eBRC, a services exporter might also be required to submit a Foreign Inward Remittance Certificate (FIRC) with their GST refund application. An FIRC is similar to an eBRC in that it is a certificate issued by a bank against money received from a foreign country. However, while an eBRC is issued strictly against export proceeds, the inward remittance in an FIRC could be payment for exports or for ocean or air freight, wages for consultancy services provided, or anything else for that matter. An FIRC is first and foremost proof that an individual has received payment in foreign currency from a foreign country. However, in GST refund claims, an FIRC – like an eBRC – acts as proof of export.
Apart from helping exporters avail of export incentives under the Foreign Trade Policy and claim GST refunds on services exports, an eBRC is an important source of financial information and economic indicator. To this end, the DGFT has signed MoUs with 14 state government and two central government agencies for data-sharing. Before the introduction of GST in 2017, state governments also required eBRC for the refund of value-added tax or VAT (an indirect tax that was later subsumed by GST).
To know more about GST refunds in the export business, read our two-part series here and here.
Signup to Cogoport. Get trade new & updates, and get assistance with booking international shipments online!
Everything you need to know about the export of goods with payment of IGST, how to claim a refund, and common problems you might face during the refund process
Post-shipment credit is a collateral-free finance option for exporters to manage their cash flow needs as they wait to be paid. Read this guide to know about the different types of post-shipment credit available to exporters, where exporters can avail of them, and how it will help their business
Minimum order quantity ensures that suppliers make a profit on sales while buyers get the right products for the right price. However, buyers can still negotiate a lower MOQ in China. We’ll tell you how.
Know about Export Promotion Councils in India, its roles, functions, benefits, types, current trends and how to register with them.
Everything you need to know about the export of goods without payment of IGST, under bond/LUT, how to claim refund of input tax credit, and recent changes in the GST law
Managing cashflow in the export business is a huge challenge. Follow this guide to make your transactions less of a risk & more of an opportunity.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.
The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.
A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!
Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.