On November 15, India’s Ministry of Commerce will pilot the enhanced Electronic Bank Realization Certificate (eBRC), which will allow exporters to self-certify. The move aims to create a smoother business environment for merchants. The eBRC is an important document for exporters as it serves as a confirmation issued by a bank confirming that the exporter has received payment from a foreign buyer for the export of goods or services.
The revised system will be based on electronic Inward Remittance Messages (IRM) sent by banks directly to the Directorate General of Foreign Trade (DGFT). Based on the IRMs received, exporters must self-certify their eBRCs. See official communication from DGFT Here.
Exporters in India can access various benefits and incentives listed in the Foreign Trade Policy. However, to qualify for these benefits, exporters must submit the Bank Realization Certificate (BRC) as proof of their exported goods. The electronic-BRC or eBRC is an initiative to promote paperless trade and uses an electronic platform created by the DGFT.
Relevant links to eBRC services can be found here on the DGFT website: https://www.dgft.gov.in/CP/?opt=eBRC
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How the improved eBRC optimizes workflow
The improved eBRC system aims to empower exporters by reducing transaction time and costs. In addition, it aims to reduce the workload of bank employees by simplifying the matching process of Inward Remittance Messages with shipping invoices, SOFTEX, invoices, etc., thereby promoting a more business-friendly environment. (Software resellers must complete the SOFTEX form, which is used to declare software exports.)
The optimized workflow of the revised eBRC system is described as follows:
- Banks processing export remittances transmit the IRM message electronically to the DGFT IT system.
- Banks transmit only the IRMs related to the trading account, excluding those related to the capital account, ensuring that the focus is on remittances related to exports of goods or services.
- Relevant details from the IRMs are accessible to the respective Importer-Exporter Code (IEC) holder by logging on to the DGFT website (https://dgft.gov.in). Linking to PAN ensures that only the affected IEC holder has access to their IRM.
- Exporters generate eBRCs by matching IRMs with relevant shipping notes, SOFTEX or invoice details. Multiple IRMs can be combined under one eBRC, or conversely an IRM can be distributed across multiple eBRCs.
- eBRCs can be created for goods exports, services exports and deemed exports.
- Validation of the eBRC fields by the exporter is done using the RBI purpose code and other fields mentioned in the IRM.
- Banks have access to all eBRCs generated from the IRMs they enter. You have the option to flag each eBRC for further review or ask the relevant exporter for input.
Pilot introduction of the improved eBRC system
The preliminary launch of the expanded eBRC system is scheduled for November 15, 2023. After this date, each bank will set its individual deadline based on its preparation after completing the User Acceptance Test (UAT). In case of Inward Remittance Messages/IRMs dated on or after this bank specific date, exporters are required to undergo self-certification with the DGFT.
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For the transition period, an updated and a legacy system will be operated in parallel
For IRMs created before this specified date, banks will generate eBRCs and forward them to the DGFT as per the traditional eBRC process. Both the updated and legacy eBRC systems will operate simultaneously until all banks have completed the transition to the enhanced eBRC system.
A list of banks with their respective IRM deadlines is provided on the DGFT website for reference by all concerned.
To enable rapid data exchange, it is imperative that all banks be integrated via the Application Programming Interface (API). Exceptions to this rule require detailed justification. Banks are required to complete the transition to API integration with the enhanced eBRC systems by January 31, 2024 at the latest.
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