Function of brc & others

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 March 2013 Hello sir/ Madam.

I want to know :
1) purpose behind introduction of BRC. Why it is needed.

2) Within how much time the export proceeds has to be realized in india.

3) Function of Shipping Bill and How the same comes into existence./ generated.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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09 March 2013 reply:-

1) and 2)

Bank Realisation Certificate (BRC) is issued by a bank after realisation of export proceeds in the country. It is an important document required for claiming benefits under various FTP schemes. In addition, BRC data is used by VAT, Income tax and Drawback departments. Moving towards paperless trade and with a view to reduce transaction cost, DGFT, with effect from August 17 this year, has introduced eBRC and stopped accepting physical copy of BRC. The eBRC module developed by DGFT enables electronic transmission of foreign exchange realisation from banks to DGFT server. This process is made secure by use of digital certificate.

eBRC is available for Chapter 3, DEPB and DFIA. It will be extended to Export Obligation Discharge Certificate (EODC) within a month. “DGFT is aiming to be the most digital friendly department in the government and adoption of electronic means will strengthen transparency, speed and responsiveness of the department while bringing down the transaction cost for everyone

At present, for claiming benefits under various schemes of Foreign Trade Policy, exporters have to obtain Bank Realisation Certificate (BRC) from banks in the existing formats prescribed at Appendix 22A (physical exports) and 22B (deemed exports) of Handbook of Procedure -Vol.1(Appendices and Aayaat Niryaat Forms) and submit the same to the Directorate General of Foreign Trade (DGFT) manually. With the introduction of electronic BRC system, banks will issue and transmit BRC’s electronically to DGFT’s server replacing the manual mode of obtaining and submitting BRC. The revised process flow with technical guidelines are available on the DGFT’s website dgft.gov.in under the ‘e-BRC’ icon.

further info:

http://164.100.9.245/Exim/2000/CIR/CIR12/cir0112.htm

3)
https://www.caclubindia.com/experts/time-limit-for-obtaining-bank-realisation-certificate-1062049.asp#.UTrjpDf7crc

Querist : Anonymous

Querist : Anonymous (Querist)

09 March 2013 Thank you very much sir.

Sir i want to know the concept of "Forfaiter" in overseas payment and how it works.

AND

How the export proceeds are realised in India channelizing over various intermediaries? please explain step by step.

Thanks & Regards!!

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RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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11 March 2013 noted that :

Exchange Earners' Foreign Currency Account (EEFC) is an account maintained in foreign currency with an Authorised Dealer i.e. a bank dealing in foreign exchange. It is a facility provided to the foreign exchange earners, including exporters, to credit 100 per cent of their foreign exchange earnings to the account, so that the account holders do not have to convert foreign exchange into Rupees and vice versa, thereby minimizing the transaction costs.

i) Inward remittance through normal banking channels, other than remittances received on account of foreign currency loan or investment received from abroad or received for meeting specific obligations by the account holder;

ii) Payments received in foreign exchange by a 100 per cent Export Oriented Unit or a unit in (a) Export Processing Zone or (b) Software Technology Park or (c) Electronic Hardware Technology Park for supply of goods to similar such units or to a unit in Domestic Tariff Area;

iii) Payments received in foreign exchange by a unit in the Domestic Tariff Area for supply of goods to a unit in the Special Economic Zone (SEZ);

iv) Payment received by an exporter from an account maintained with an authorised dealer for the purpose of counter trade. (Counter trade is an arrangement involving adjustment of value of goods imported into India against value of goods exported from India in terms of the Reserve Bank guidelines);

v) Advance remittance received by an exporter towards export of goods or services;

vi) Payment received for export of goods and services from India, out of funds representing repayment of State Credit in U.S. Dollar held in the account of Bank for Foreign Economic Affairs, Moscow, with an authorised dealer in India;

vii) Professional earnings including directors fees, consultancy fees, lecture fees, honorarium and similar other earnings received by a professional by rendering services in his individual capacity;

viii) Re-credit of unutilised foreign currency earlier withdrawn from the account;

ix) Amount representing repayment by the account holder's importer customer, of loan/advances granted, to the exporter holding such account; and

x) The disinvestment proceeds received by the resident account holder on conversion of shares held by him to ADRs/GDRs under the Sponsored ADR/GDR Scheme approved by the Foreign Investment Promotion Board of the Government of India.

2)

when the Goods exported the exporter received from buyer :

1. TT

2. DEMAND DRAFT

3. FIRC

AFTER GETTING THE ABOVE SAID AMOUNT ARRANGE FOR MAKING BRC

FIRST STEP FOR MAKING THE ----E-BRC
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WRITE A REQUEST LETTER ADDRESSED TO BANKER FOR ISSUE BRC AS WELL AS ALSO SUBMIT IN BANK INVOICE, B/L, AWB, CERTIFICATE OF ORIGIN, INSURANCE COPY EXCHANGE CONTROL COPY OF SHIPPING BILL.

NOW BANK TRANSMITTED THE ebrc IN DGFT SERVER AS PER DGFT Policy Circular No 06(RE-2012)/2009-14.

REGARDS,

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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11 March 2013 The policy circular no. 1 explains, with examples, as to how this will be done. It also says that banks shall upload the rupees equivalent of the realised foreign exchange, based on the monthly exchange rate notified by Central Board of Excise and Customs (CBEC), Ministry of Finance. In case the realisation is in a denomination other than the notified currency, the rates given by Reserve Bank (RBI) shall be adopted. In case exchange rate is not available from RBI, then banks will do currency conversion as per their present existing practice.

Exporters can view the e-BRC but wonder whether they can take a print of their records. There could be part payments against a single shipment and a single payment covering several shipments. Banks will require inputs from exporters regarding what remittance relates to which shipping bill. Banks cannot correct e-BRC. They have to cancel unused e-BRCs and upload fresh ones. e-BRC requires no mention about GR/SDF forms or any schemes used by exporters. At present, there is no mention of how Customs will use the same e-BRC to monitor payments against drawback disbursements.

Many banks have not yet updated their software and so it may be some time before exporters get more familiar with the new system.