FIRC (Foreign Inward Remittance Certificate) refers to a document which acts as a testimonial for all the inward remittances entering to India. Most of the statutory authorities use this document as a proof that an individual has received a payment in foreign currency from outside the country. When an individual receives some amount of money from a foreign country then it is credited to his account through an authorized dealer, which are normally banks authorized to do so by the Reserve Bank of India. If the beneficiary does not have a bank account in an authorized bank then he cannot get his money transferred into his bank account.
FIRC is considered a very important document as it serves a lot of purposes. If shares are issued in the name of a person or company which exists outside a country then FIRC acts as the proof of money received in lieu of share application. In those cases where a resident Indian sells or transfers his shares to some non-resident Indian or foreign identity then FIRC testifies that the resident seller has got the share purchase consideration. FIRC is a very crucial document which is submitted to DGFC in case of EPCG and Advance License.
When services are exported then no GST is levied according to the rules of export of services. In such cases, FIRC acts as an important proof of export of services and remittances which are received in lieu of them. There are various details which are included in FIRC. FIRC carries the beneficiary’s name, mode of payment i.e. whether the money has been deposited to the account of beneficiary or cash has been given to him, address and name of remitter, Cheque/DD/TT no. , an exact amount of foreign currency, amount of money when changed into the currency of the country of the beneficiary, name of the person in whose favor the amount has been sent, the purpose for the receipt of remittance and rate of exchange which is prevalent.
After knowing all this, you have got the knowledge that how important is the document of FIRC. The person who is about to receive a remittance from outside India should mention the purpose of remittance honestly. This is because, at the time of receipt of the money, the bank asks for the proof of the purpose mentioned by you for getting remittance from outside India.