Export/Import Updates!
May 25, 2021

What is an eBRC & Why Do Exporters Need It

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:

  • What is eBRC?
  • Why do you need it? 
  • How does it work? 
  • How to check eBRC status
  • Roles and responsibilities of bank, exporter and DGFT 

What is the purpose of an eBRC?

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.


How does the eBRC process work?

Here’s a flow chart of how the eBRC process works:  

  1. The bank generates an e-BRC on realisation of export proceeds
  2. Next, it creates a digital XML file containing information of the eBRC
  3. The bank signs the XML file using a digital signer provided by the DGFT or developed by itself (the bank must register its signer with the DGFT beforehand)
  4. Next, the bank uploads the XML file to the DGFT server. It does so by accessing the DGFT website, logging in to the e-BRC application and using the “Upload eBRC” option
  5. Once the file is uploaded, the DGFT server verifies the user and validates the data. Thereafter, it sends an acknowledgement to the bank that the file has been successfully uploaded
  6. Once the file has been uploaded, the exporter can immediately check the status of their eBRC on the DGFT portal           

How exporters can check their eBRC status & Print

  1. On the DGFT website, go to the “e-BRC Details for Trade” page
  2. Fill in the required fields, including IEC (Importer Exporter Code), IFSC code of the bank where payment for the exported goods has been received, and the shipping bill number and date
  3. Click on “Show Details”. This will reveal all the eBRCs issued by the bank
  4. Click on the relevant eBRC. You can also take a printout of the same

eBRC Roles And Responsibilities

eBRC - Roles & responsibilities of the Bank, DGFT and the exporter

What to do in case of an error in your eBRC

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:

  • The bank will check the status of the eBRC
  • It the status is not “used” or “utilised”, the bank will cancel the eBRC by uploading it to the DGFT server with status “C” (where C means cancelled)
  • After the DGFT server has updated the cancellation status, the bank will issue a fresh eBRC with a new eBRC number
  • It will upload the new eBRC file to the DGFT server with the status “F” (where F means fresh)      

How to claim export incentives using eBRC

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: 

  1. Make sure the eBRC value reported by the bank reflects the total realised value. If the eBRC value is less, have it corrected by the bank right away.
  2. Enter the commission, insurance and freight values in the refund application as the eBRC does not include these details.


eBRC and FIRC – GST refund requirements 

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.


Other uses of eBRC

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.

Editorial Team
Editorial Team
Customer success manager

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