Foreign Inward Remittance Certificate is a document that acts as a testimonial for all the inward remittances coming to India. This document is used as a proof of payment received by the individual from outside the country in the foreign currency. On receiving the money from a foreign country, it is credit to the account of the receiver by authorized body such as banks that are authorized by the Reserve Bank of India. The beneficiary cannot transfer money to his bank account if he does not have a bank account in an authorized bank.
FIRC is regarded as a very important document as it can be used for many purposes. If the shares are issued on the name of company or person that are outside the country then FIRC can be used as a proof of money received on behalf of share application. In case where a resident Indian transfers or sells his shares to an individual who is NRI or foreigner then FIRC can be used to testify that the resident seller has the share purchase consideration. FIRC is submitted to DGFC in case of EPCG and Advance License and is a very important document.
As per the rules of export of services, there is no service tax is levied when services are exported and in such cases, FIRC can be used as an important proof of export of services and remittances that are received. FIRC is a crucial document that contains various details like the beneficiary’s name, address and name of remitter, mode of payment, exact amount of foreign currency, Cheque/DD/TT no , amount of money, purpose for the remittance and prevalent rate of exchange. Person, who is receiving the remittance from outside India, should also reveal the purpose of remittance. It is asked by the bank as a proof of purpose at the time of receipt of the money.