Article explains What is Inward Remittances, Procedure of Inward Remittance, Other things to be kept in Mind related to Inward Remittances and Bank Charges for Inward Remittance.
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What is Inward Remittances
Inward Remittance is used for remittance from Overseas Bank to Domestic Bank. Inward Remittance can be against Export of Goods/ Services, Investment purpose, Donations, Gifts, etc.
Procedure of Inward Remittance
1. Remitter Side:
At the first stage the Sender of money (Remitter) goes to his bank account and submit the request for payment into receiver’s (Remittee) account.
For remittance the information required by Remitter bank of Remittee are:
Remitee Name and Address
Bank Account number
Bank Branch details
Swift Code of Bank
Nationality of Bank
After completion of the transaction Remitter Bank provide an acknowledgement of transfer which the Remitter has to provide to the Remittee.
2. Remittee Side:
After completion of the transfer the Remittee bank holds the amount for Procedural completion and compliance check. The Remittee has to contact his bank and provide all the relevant documents asked by the Bank.
Generally, documents required by the Bank are:
Invoice against which payment is made
Contract
Purpose Code list for which the payment is received (Bank Share this list),
Remittance information (Amount in Foreign currency, Remitter Name)
Bank Generally take 1-2 working days to complete the transaction. For First time inward remittance the Bank usually take 3-4 working days.
The Remittee is required to keep all the records for future reference. Remittee is also required to keep a copy of FIRC (Foreign Inward Remittance Certificate) in the records. FIRC can be taken from the Remittee’s Bank.
For Inward Remittance RBI approval is also required in some cases. However your bank takes care of that most of the time.
Bank Charges for Inward Remittances
Generally the Bank charges are nil on inward remittances. However the Bank charges GST on their fees. So, the GST is payable to the Bank.
Other thing is that there is difference in Exchange rate and the rate at which the bank clear your funds. This in most of the case fall from 50 paise-70 paise per dollar.
So, overall your deduction in inward remittance fall to around Rs 1 per dollar.
You may contact the author for further information at 9899595719 or taxwizersconsultant@gmail.com
Disclaimer: The above article is only for information purpose and is on based on the author’s interpretation of the relevant provision. The same should not be considered as professional advice.
Author Bio
Hello Guys ,
I want to know about GST. I have a registered LLP firm and I am offering technical support to company outside, and I receive the payment as remittance against my invoice, is there any GST applicable on my side as it is foreign remittance.
I give tuitions in vocal music to students abroad, mainly USA. The invoice of their fees is raised in USD and sent to the students who pay me thro payment platforms like XOOM etc. The Indian rupee gets credited to my account in Mumbai, India. I do not get any FIRC. Can these transactions be termed as foreign inward remittance and hence should be treated non taxable as per Income Tax Act in India?
I get payment from a Forigen Company in Indian Rupees but my bank did not convert the payment from Forigen Currency to Indian Rupee, from where can i get the FIRC?
Can I accept inward remittance to my Savings account even if I have a Current account in my firms name?
I have an inward remittance that is being delayed for what reason I don’t know.
I had given standard instruction to accept from the same party as payment for services rendered.
I have received payment twice till 2015. Now I have just received payment again and they are asking me to submit form.
I am trying it online but it come invalid ARC number. But the interface of the Savings account and the Current account(I just checked out of curiosity) is different.
The screenshots and the instructions my Forex manager is giving me is for the Current account interface.
So I am confused
What is the complaisance for foreign remitance received from Foreign Exchange Dealer of foreign country and bank also credited the same in company’s bank account without any document.