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.
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.
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
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.
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 [email protected]
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.