What Is eBRC, What Has Changed, and What Every Exporter Must Know?
Discover what eBRC is, the recent changes in its system, and crucial information every exporter should be aware of. Stay informed on eBRC updates to ease export compliance.
Summary
The eBRC (Electronic Bank Realization Certificate) has been a game-changer in the export world, simplifying the process of tracking foreign payments and export proceeds. With recent updates and changes in the eBRC system, it’s essential for exporters to stay informed. In this blog, we’ll dive into what eBRC is, what’s changed, and what every exporter must know to remain compliant and benefit from a smoother experience.
Introduction
Exporting goods and services is no small feat. Apart from the logistical challenges, the paperwork involved is often daunting. This is where the eBRC (Electronic Bank Realization Certificate) comes in. Introduced by the Directorate General of Foreign Trade (DGFT), eBRC has streamlined export documentation, reducing the burden on exporters while ensuring regulatory compliance.
In this blog, we’ll unpack:
What eBRC is and why it’s important for exporters.
The recent changes in the eBRC system.
Key insights exporters must know to keep things running smoothly.
What is eBRC?
The Electronic Bank Realization Certificate (eBRC) plays a pivotal role for exporters in India, serving as evidence that an exporter has received payment in foreign exchange against an export shipment. This document is crucial for claiming various government incentives under India’s Foreign Trade Policy. The introduction of eBRC has transformed the traditional process of obtaining these certificates, as earlier, this process was paper-based and cumbersome, requiring physical certificates from banks and multiple follow-ups. eBRC has made this process more streamlined and efficient.
Key points about eBRC:
- It stands for “electronic Bank Realisation Certificate”
- Serves as proof of realization against exports
- Traditionally issued on the DGFT platform by concerned banks at the exporter’s request
An eBRC is a digital version of the traditional Bank Realization Certificate. It is issued by banks to confirm that an exporter has received payment from their overseas buyer, a necessary proof for accessing several government incentives intended to promote exports.
With the digital transformation, eBRC now allows banks to electronically transmit the export realization information to the DGFT. This data is then automatically linked to export benefits like MEIS (Merchandise Exports from India Scheme) or SEIS (Service Exports from India Scheme), making it easier for exporters to claim their incentives without unnecessary delays.
The primary goals of eBRC are to:
Ensure transparency in export transactions.
Simplify compliance with the Foreign Exchange Management Act (FEMA) and other export-related regulations.
Automate the export incentive claims process under various DGFT schemes.
Why is eBRC Important for Exporters?
Every exporter knows that documentation is the backbone of international trade. Without proper records, claiming incentives, complying with regulations, and maintaining smooth operations can become a challenge. eBRC offers multiple benefits to exporters:
Seamless Integration with DGFT: Since the entire process is online, exporters no longer need to submit physical documents to DGFT. The bank directly uploads the eBRC, allowing for faster verification.
Quick Incentive Claims: Exporters can claim benefits like the RoDTEP (Remission of Duties and Taxes on Exported Products), Advance Authorisation scheme, Export Promotion Capital Goods Scheme (EPCG), MEIS / SEIS / TMA (legacy schemes) or duty drawback schemes efficiently.
Transparency and Accuracy: Minimised human intervention lowers the risk of errors and delays.
Regulatory Compliance: eBRC helps exporters stay compliant with FEMA rules, and GST compliances (Rule 89(2) of the CGST Rules), ensuring there are no hiccups in documentation.
What Has Changed in the eBRC System?
The eBRC system, while highly efficient, has recently undergone significant updates aimed at making things even smoother for exporters. These changes were introduced to keep up with the evolving needs of exporters and the increased pace of global trade.
Here’s a breakdown of the key changes:
Revamped Interface & Automation: The DGFT has introduced a more user-friendly interface that allows for self-certification by exporters (based on trust in Indian exporters). This enables faster approvals, with less dependency on external audits. Exporters can now upload their eBRCs and claim incentives more autonomously.
System-based checks: Self-certified eBRC generation will be based on system checks as per business rules available on the DGFT website.
Cost-free process: The new system operates on the DGFT portal at no cost to exporters.
Paperless process: There’s no need for paper submissions to any authority at the time of eBRC generation. The need for applications and requests to banks for eBRC generation has been removed.
Easier Rectification Process: Earlier, if there was a discrepancy in the eBRC, exporters had to undergo a lengthy process of contacting their banks, which then liaised with the DGFT. The new system now allows exporters to correct minor errors on their own through the DGFT portal, saving time and reducing reliance on intermediaries.
Real-Time Data Synchronization: Banks are now required to transmit export payment information in real-time to the DGFT, significantly reducing delays in receiving the eBRC. This is crucial for exporters seeking to claim incentives promptly.
Enhanced Security Features: To prevent fraud and unauthorized access, the updated system includes advanced security protocols. Only authorized personnel with the right credentials can access or amend eBRCs, ensuring the authenticity and integrity of the data. Additionally, a post-audit mechanism has been introduced for banks and other stakeholders to verify the authenticity of eBRCs.
Pilot Launch of the Upgraded System - In November 2023, an upgraded eBRC system was piloted to improve data accuracy, streamline operations, and further automate the exchange of information between banks and DGFT. This system is expected to go live fully by early 2024, reducing turnaround times for exporters to access their export proceeds data.
What Exporters Need to Know
If you’re an exporter, you’ve got to stay updated on how these changes impact your day-to-day operations. Here’s a handy checklist to ensure you’re on top of the eBRC game:
Check Your Bank’s Compliance: Ensure that your bank is equipped to send eBRC data in real-time. Not all banks may have fully integrated the new system yet, so it’s worth checking if your bank is on board.
Familiarize Yourself with the DGFT Portal: The DGFT’s revamped eBRC portal allows you to access and manage your eBRCs easily. If you haven’t already, get your login credentials and start exploring the features.
Self-Certification Is Key: With the new self-certification feature, you no longer need to rely entirely on banks or third parties for approvals. Make sure you understand how to use this feature effectively to save time and avoid delays.
Keep Track of Realization Timelines: Banks now report export proceeds in real-time, but you should still monitor the timelines. Any delay in receiving payments could affect your ability to claim incentives.
Stay Updated on Regulatory Changes: Export rules and incentive schemes are constantly evolving. Stay informed through DGFT notifications and government circulars to ensure you’re aware of any new compliance requirements.
FAQs on eBRC
Turbo Capital FAQs
You can raise a request with your bank to expedite the process. With the new system, real-time updates should reduce such delays, but banks are still responsible for uploading your eBRC.
No, the eBRC is essential for claiming export benefits like RoDTEP and MEIS. Without an eBRC, your application for these schemes will be incomplete.
Yes, exporters must submit their eBRCs within the stipulated time frame to avail of export benefits. It’s crucial to monitor these deadlines on the DGFT portal.
The new system allows exporters to self-certify and correct minor discrepancies. For major errors, you may need to coordinate with your bank.
Final Thoughts
The eBRC system has come a long way from its early days, becoming a crucial tool for exporters. With recent changes aimed at boosting efficiency, real-time data integration, and self-certification, the process has never been easier.
However, as with any new system, there may be a learning curve and potential challenges during the transition period. Exporters are advised to familiarize themselves with the new process, stay updated with DGFT notifications, and maintain meticulous records to ensure smooth operations under the new eBRC regime.
In summary, eBRC is a testament to India’s commitment to leveraging technology to facilitate international trade. Understanding and utilising this system efficiently can significantly benefit exporters by reducing the administrative burden and expediting the incentive claim process. For a deeper dive into how eBRC operates and its benefits, exporters can refer to resources like the DGFT’s website or the detailed blog posts on platforms like TurboCap.