As an Indian exporter, navigating the complexities of international transactions and compliance can feel like solving a complex puzzle. Today, we'll explore a crucial piece of that puzzle: FIRC

FIRC full form is Foreign Inward Remittance Certificate. It is a document issued by banks as proof of receiving international payments. Over the years, regulations around FIRC have changed significantly, creating confusion and mystery around this important document. Let's clear the air and decode the what, who, and why of FIRC.

FIRC or Foreign Inward Remittance Certificate serves as a proof of foreign money transfer for exporters in India. Until 2016, <a href="https://rbidocs.rbi.org.in/rdocs/FEMAMASTER/PDFs/1061.PDF">AD (Authorised Dealer) Category I Banks</a> were authorised to issue FIRCs to exporters for receiving payments from foreign sources. This document was essential for exporters to obtain after each cross-border payment. It served not only as proof of payment receipt but also as a crucial document for claiming export-related incentives, such as tax exemptions on foreign currency payments received in India.

As we've covered, the full form of FIRC is Foreign Inward Remittance Certificate and for a long time it served as proof of export income from abroad. However, with changing regulations, the function of FIRC has also changed significantly. Let's take a look:

FIRA is often still referred to by its old name, FIRC. While both documents serve the same purpose, FIRC is technically only issued for returns on&nbsp;Foreign Direct Investment (FDI )or Foreign Institutional Investment (FII). For all other export collections, FIRA/BIRC is what you need.

For clarity, we'll use the term FIRC moving forward, but it refers to FIRA throughout.

Anyone receiving foreign payments needs FIRC.&nbsp; Beyond goods and service exporters engaging in international trade, many individuals and entities may receive international payments without realising it.&nbsp;

Overall, the following typically require a FIRC:

Beyond compliance, here’s why FIRC is crucial for exporters:

FIRCs are issued by AD Category I banks. You can contact your bank to get your FIRC after receiving your foreign payment. <a href="https://www.skydo.com/blog/how-to-get-firc-certificate-online">Alternatively, you can also use platforms like Skydo to get your FIRC instantly after every payment.&nbsp;</a>

Who Needs FIRC and Why It’s Important for Exporters?

FIRC (Foreign Inward Remittance Certificate) is essential for anyone receiving foreign payments, including:

Exporters, in particular, rely on FIRC for two key reasons:

FIRC is issued by Authorized Dealer (AD) Category I banks, and businesses can obtain it directly from their bank. However, it is usually a cumbersome process requiring multiple follow-ups and most banks charge around INR 500 to issue each FIRC.&nbsp;In contrast, platforms like Skydo offer a fast, hassle-free solution, providing an instant FIRC for free after every foreign payment—no manual requests, no extra costs.

This is a sample FIRC document. All crucial remittance details have been masked for security purposes. Now let’s break the content of a FIRC down: 

Receiving your export payment directly through your bank can make obtaining an FIRC a lengthy process. You need to submit a request to the bank, and the bank typically takes 7-15 days to provide the FIRC. You may also need to follow up multiple times, and banks often charge at least INR 400 to issue the FIRC, depending on the institution.

<a href="https://www.skydo.com/blog/how-to-get-firc-certificate-online">Getting a FIRC</a> might sound like a hassle, but with Skydo, it's a breeze. Our fully automated payment system along with built-in partnerships with banks, ensures effortless compliance with RBI guidelines, without needing any manual intervention.

When you receive an export payment through Skydo, we automatically generate the required FIRC for you at no extra cost. Just log into our user-friendly dashboard, and you'll find your FIRC ready to download, complete with all the details you need. 

In conversations around FIRC, there are a few more terms that get frequently mentioned, one of them being eFIRC. So what exactly is <a href="https://www.skydo.com/blog/efirc-firc-brc-essentials-differences">eFIRC?</a>

What is the difference between eBRC and FIRC?

Generally speaking, e-BRC applies mostly to goods and software exporters (under <a href="https://stpi.in/en/home?no_follow=true/">STPI</a>). If you are one of them, you can use this simple decision tree to understand which documents you will need:

Exporting goods and services is considered Zero-Rated Supply, meaning it is subject to 0% GST. However, to claim a GST refund for the input tax credit, exporters must provide the required documents including FIRC. These documents authenticate that the business is claiming a refund because it exported services and couldn't offset its input tax credit as it would in normal domestic business. Without FIRC, claiming a GST refund may not be possible

As we surge in cross-border transactions, ensuring compliance and safeguarding against illicit activities has become a pressing concern. However, at Skydo, we believe your focus should be on advancing your business, not on grappling with compliance challenges.

With Skydo, enjoy seamless international payments, delivered promptly and without any hidden fees. But that's just the beginning! Every time you receive a cross-border payment, an auto-generated FIRC is readily available for you to download, relieving you of compliance burdens so you can devote your energy to what truly matters: driving your business forward.

FIRC full form is Foreign Inward Remittance Certificate. Learn what FIRC is, its importance for exporters and freelancers, and how to obtain it easily

FIRC: Full form, meaning and RBI guidelines

Dive into the world of FIRC. Explore the full form, importance, and process of obtaining FIRC for your international transactions

Foreign Inward Remittance Certificate (FIRC): Full form, meaning and RBI guidelines

Prashanth

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Prashanth Kumar

India’s tech exports hit a massive <a href="https://www.ibef.org/industry/information-technology-india">$199 billion in FY24</a>—a clear sign of how resilient and innovative India’s tech sector is, even in tough global times. This growth is putting India on the map as a global leader in technology and services.

But let’s be honest: while the numbers look great, the reality for Indian exporters can be challenging. One of the biggest pain points? Getting paid. Despite all the advancements, receiving international payments is still slow, complicated, and often way too expensive.

So, how do you, as a tech professional, keep your cash flow healthy and focus on growing your business globally? That’s where Skydo comes in. We take the headache out of receiving international payments, cutting through the delays and unnecessary costs, so you can focus on what really matters—your growth.

Limitations of Existing Payment Channels in India

The existing international payment landscape in India is extremely cumbersome and time-consuming for businesses.&nbsp;

The majority of <a href="https://www.pwc.in/industries/financial-services/fintech/dp/the-evolving-landscape-of-cross-border-payments.html">international remittances</a> take place through the following channels:

The following are the challenges that tech exporters face while receiving international payments through these channels:

Steep Fees and Unfavourable Exchange Rate:&nbsp;

Receiving international payments via SWIFT comes with its own set of costs. You’ll encounter SWIFT fees ranging from INR 500 to 1,000, along with additional charges like tracking fees and FIRA fees. But the real issue lies in the unfavourable exchange rates offered by banks.

Unlike live exchange rates, banks often provide lower rates. For example, if the market rate is 1 USD = INR 86, a bank might offer you a rate of 84. On a payment of USD 10,000, this means you’d receive INR 8,40,000 instead of INR 8,60,000—a loss of INR 20,000, simply due to poor exchange rates. And the worst part? You might not even realise it.

Complex and Time-Consuming FIRA Process:

FIRA, or Foreign Inward Remittance Advice, is a critical compliance document that every exporter must secure after receiving cross-border payments. It serves as proof of the international payment you’ve received for your services.

However, obtaining FIRA from banks is far from simple. The process often involves repeated follow-ups, long waiting times, and, to make matters worse, most banks charge an additional fee for issuing the document. This not only adds to the complexity but also increases the overall cost of managing international payments.

When it comes to customer support, banks often fall short—understandably so, given the sheer volume of customers they handle daily. However, this leaves exporters like you in a tough spot. Even a straightforward query can take weeks to resolve, requiring multiple follow-ups along the way. For busy tech exporters juggling countless priorities, this lack of timely support can quickly become a source of frustration.

Receiving a SWIFT transfer can take upto 5 business days, longer if there are multiple intermediary banks involved. This wait time can not only be frustrating but can also cause a cash crunch for exporters.&nbsp;

Why is Skydo Important, and What Does it Solve?

Skydo is transforming the way businesses handle international payments with innovative, affordable solutions. With features like automatic FIRA generation, automated invoicing, flat transaction fees, and responsive customer support, Skydo takes the hassle out of cross-border payments, letting you focus on growing your business.

We understand the unique challenges tech exporters face when dealing with international transactions—hidden fees, delays, and endless follow-ups. That’s why Skydo is designed to tackle these issues head-on, making global payments fast, transparent, and stress-free.

Here’s how Skydo addresses common pain points and becomes your go-to solution for international payments.

One of the most significant benefits of the <a href="https://www.skydo.com/blog/a-quick-guide-to-using-the-skydo-platform?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Skydo payment platform</a> is the flat transaction fee for receiving international payments.&nbsp;

For payments above USD 10,000, Skydo charges a 0.3% fee, much more affordable than most other payment platforms.&nbsp;

You can view the exact transaction fee when you generate an invoice. Thus, Skydo ensures transparency and helps you save unnecessary hidden charges levied by other payment gateways.

2. Seamless payment processing within a few hours

Skydo provides you with virtual international accounts in multiple key regions including the US. UK, Europe, Australia, Singapore and more. So, in these regions, your clients pay you in these virtual accounts, making it a local transfer rather than an international one. Skydo then consolidates these payments and settles it in your Indian bank account within just 24 hours—no more long wait times, just smooth and consistent cash flow. Plus, with our real-time payment tracking feature, you’ll always know exactly where your payment is at every step of the process.

Skydo converts the payment received in international currency into INR as per the live foreign exchange rates without levying any additional fee. This means that you get the exact amount in your bank account as per the prevailing currency rate without any deductions.&nbsp;

4. Invoice generation and payment reminders with the auto-generated invoice number

Invoicing is one of the best features of the Skydo payment platform. It helps you save on time and manual efforts by creating automatic invoices. 

Skydo provides customisable professional invoice templates to suit your business requirements. The payment platform automatically adds the invoice number every time you generate an invoice.&nbsp;

Moreover, you can track the real-time status of all your invoices on a single dashboard and send payment reminders to clients through Skydo.

Learn more: <a href="https://www.skydo.com/blog/transforming-your-invoicing-experience-with-skydo">Transforming Your Invoicing Experience With Skydo</a>

5. Compliance with Indian regulations - Automated FIRA

<a href="https://www.skydo.com/blog/all-you-need-to-know-about-FIRC-a-complete-guide?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Foreign Inward Remittance Advice (FIRA) certificate</a> provides complete details of all foreign services provided by Indian exporters. It is essential for businesses to maintain all FIRA receipts to reconcile their financial statements and for tax compliance purposes.&nbsp;

Skydo automatically generates FIRA certificates for all transactions, making it easier for you to comply with tax laws.

The intuitive dashboard has been designed to help users easily navigate through Skydo's payment platform. It provides you access to all the details related to your transaction within a few seconds.

How Does Skydo Ensure 100% Safe and Secure Payments?

Questions around safety and security become paramount when it comes to international payments. Here's how Skydo ensures 100% compliant payments every time.&nbsp;&nbsp;

1. Skydo's Collaboration with Indian and Foreign Financial Institutions

Skydo has partnered with renowned financial institutions around the world including HDFC and Banking Circle and many more to simplify international payments for Indian exporters and service providers. We are also actively in talks with many other renowned institutions to be able to offer virtual accounts in more regions

Learn More: <a href="https://www.skydo.com/blog/seamless-payment-experience-with-international-bank-accounts">Enjoy Seamless Payment Experience by Creating International Bank Accounts in Just 5 Minutes</a>

Skydo is now <a href="https://www.business-standard.com/companies/start-ups/fintech-skydo-receives-in-principle-approval-to-operate-as-pa-cb-entity-125012101362_1.html">RBI-approved as a Payment Aggregator for Cross-Border Payments (PACB)! </a>This milestone reflects our commitment to making your payments secure, seamless, and fully compliant with RBI regulations.

We’re also SOC 2 certified, meaning your data’s safety is non-negotiable for us. With end-to-end encryption, secure storage, and regular security checks, we ensure your data stays private and protected—always.

3. Ensuring Compliance with Reserve Bank of India (RBI) Guidelines

We understand how important it is to comply with RBI’s strict guidelines, not just for us but for our tech exporters too. That’s why Skydo provides free and instant FIRA for every transaction, eliminating the need for repeated bank visits and ensuring your payments are always RBI-compliant—without the extra hassle.

4. How Skydo Streamlines Know Your Customer (KYC) Processes

One thing business owners despise the most about payment and banking platforms is the tedious KYC process. With Skydo, the process is simple.&nbsp;

As soon as the users enter the business PAN, the platform automatically extracts relevant details such as the company's name, GSTIN, and CIN from the Ministry of Corporate Affairs database.&nbsp;

Even when the directors upload their PAN, the platform automatically collects information from the uploaded file. Thus, Skydo offers smooth and quick KYC processes.

4. Auto-generated Purpose Code based on RBI Guidelines

As per the RBI guidelines, all invoices related to the export of goods or services must have a purpose code to identify the type of service provided. Without the purpose code, the banks reject the payment received from an overseas account.&nbsp;

There is a long list of different purpose codes that you can find online. Entering the purpose code manually for every transaction is time-consuming and leaves scope for error.&nbsp;

Skydo's payment platform prefills the purpose code in your account post-registration. This code is then automatically available in a drop-down based on the services rendered in that invoice. This ensures that you send accurate invoices and receive payments on time.

Harshal, founder of Mobiprise, and a proud Skydo customer, couldn't contain his enthusiasm when he said, "Compliance with Skydo is not only good but great! It’s been very painful all these years." With Skydo, you too can experience the benefits of hassle-free cross-border payments.

While businesses are keen on expanding their services globally, challenges related to international payments act as restraints. Add to this multiple regulatory processes and banking norms. Consequently, payment gets delayed, making it difficult for merchants to scale their business.&nbsp;

Skydo streamlines the payment process by providing automated invoicing services and charging flat transaction fees. It also has a vast network of Indian and foreign bank accounts, enabling businesses to open a local bank account in the US. This facilitates quick receipt of international payments to your local bank account in India.&nbsp;

<a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Request a demo</a> today to expand your business internationally with Skydo!

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If you’re an exporter or freelancer earning from abroad, you’ll need an FIRC certificate to stay compliant and claim benefits. But let’s be honest—getting one through traditional banks can be a tedious process, often requiring multiple follow-ups and fees.

The good news? You can now get your FIRC certificate online, quickly and hassle-free. In this blog, we’ll walk you through the easiest way to obtain it without the usual headaches.

FIRC certificate, or its full form <a href="https://www.skydo.com/blog/all-you-need-to-know-about-firc-a-complete-guide" target="_blank">Foreign Inward Remittance Certificate</a>, is an important document issued by banks to exporters as proof of receiving foreign currency payments. Prior to 2016, AD Category I Banks were authorized to issue FIRCs to exporters for every cross-border payment received. FIRC certificate was crucial for exporters to serve as proof of foreign transfers. It was also a crucial document for both goods and service exporters to claim their tax exemption and GST refund.

However, as per RBI guidelines since 2016, banks only issue FIRCs for specific financial transactions like inward remittances from Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII). For export collections, banks now provide a<a href="https://www.skydo.com/blog/importance-of-fira-for-freelancers"> Foreign Inward Remittance Advice (FIRA) instead.</a>

Although FIRA is often still referred to as FIRC, the two serve slightly different purposes. The key difference is that FIRCs are now limited to transactions related to foreign investment, meaning FDI and FII transactions, while FIRA is what exporters need for all other international payments.&nbsp; For clarity, we'll use the term FIRC certificate moving forward, but it refers to FIRA throughout.

FIRC Certificate from Bank:&nbsp; How to Get it?&nbsp;

As discussed, to obtain your FIRC certificate from the bank, you'll need to submit a request form with the following details:

These are the standard details required, though some banks may ask for additional information based on the transaction. Once submitted, the bank will process your request, and most banks charge a fee between INR 200-800 for issuing the FIRC certificate.&nbsp;

The entire process typically takes 7-15 days, and you may need to follow up with your bank to expedite it.&nbsp;

FIRC Certificate Download: How to Do it Online?

Today, beyond traditional banks, several online platforms like Skydo, <a href="https://www.skydo.com/blog/transferwise-india-features-benefits-pros-cons">Wise</a>, and <a href="https://www.skydo.com/blog/payoneer-payment-gateway-features-fees">Payoneer</a> provide exporters with fast and secure options for <a href="https://www.skydo.com/blog/how-to-receive-international-payments-in-india">receiving international payments in India.</a> Some of these platforms also offer FIRC Certificates to streamline compliance for exporters.

While some platforms may refer to these digital FIRAs as <a href="https://www.skydo.com/blog/efirc-firc-brc-essentials-differences" target="_blank">eFIRC,</a> electronic FIRC digital FIRC, or simply FIRC, it's important to understand that they are essentially digital FIRAs, regardless of the name. Now, let’s explore how you can receive your digital FIRA from these platforms:

How to get your PayPal FIRC Certificate ?

Since 2021, <a href="https://www.skydo.com/blog/paypal-in-india-charges-review-alternatives" target="_blank">PayPal</a> has started issuing digital FIRA to businesses receiving international payments in India as proof of payment receipt. The platform doesn’t issue individual FIRA for every transaction, instead, it issues <a href="https://www.paypal.com/in/brc/article/paypal-monthly-digital-firc?no_follow=true">monthly digital FIRA</a>, and all international transactions of the previous month are referenced in that one FIRC certificate. You can access this FIRC certificate by the 15th of the subsequent month. For example, your monthly FIRC certificate for July will be available to you by 15th of August.

Once the FIRC certificate is available, PayPal will notify you of the same via email. Here’s how you can download it:

Note that PayPal doesn't charge any additional fee for issuing FIRC certificate.&nbsp;

How to get your FIRC Certificate from Payoneer?

<a href="https://www.skydo.com/blog/payoneer-payment-gateway-features-fees" target="_blank">Payoneer</a> is another widely used platform for Indian businesses to receive international payments. To simplify compliance, Payoneer provides users with free digital FIRC Certificates for all their international transfers.

Here’s how you can download your FIRC Certificate from Payoneer&nbsp;

<a href="https://www.skydo.com/blog/top_5_wise_alternatives_for_international_payment" target="_blank">Wise</a> is a leading platform for businesses and individuals to receive foreign payments, supporting both B2B and P2P transfers. For business payments in India, Wise provides a digital FIRA via email for each transaction.

However, Wise charges an additional fee for issuing the digital FIRC certificate, which varies depending on the currency. For instance, if you receive a payment in GBP, the fee is <a href="https://wise.com/in/pricing/business/receive?sourceAmount=1000&amp;sourceCcy=GBP&amp;targetCcy=INR?no_follow=true">1.91 GBP,</a> while for USD transactions, the fee is <a href="https://wise.com/in/pricing/business/receive?sourceAmount=1000&amp;sourceCcy=GBP&amp;targetCcy=INR?no_follow=true">2.50 USD</a>.&nbsp;

Get Your Free FIRC Certificate from Skydo instantly&nbsp;

At Skydo, our goal is to simplify the international payments process, allowing you to focus on growing your business. That’s why we provide digital FIRC Certificates for every transaction, completely free of charge.

When transacting through Skydo, it automatically generates FIRC certificate for all international payments when they reach your bank account. You will also be notified of the same via email. The document details will be according to the information mentioned in the invoices and payment receipt details. You can easily go to the Skydo dashboard and download FIRA receipts for all or specific transactions, at no extra cost! 

Here’s how you can download your FIRC Certificate from Skydo:

With Skydo, enjoy hassle free and compliant international payments, delivered promptly and without any hidden fees. Switch to Skydo and experience the difference.

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How to get your FIRC certificate Online

ACH is one of the most popular electronic payment methods in the US. In 2023, it processed an astonishing <a href="https://www.nacha.org/news/ach-network-records-strong-growth-2023-same-day-ach-surpasses-3-billion-payments-inception">31.5 billion</a> electronic transactions. While ACH is popular for domestic payments, it can also be used for international transfers. If you’re an Indian exporter or a freelancer with US-based clients, you can receive payments from them via ACH.

But what is ACH exactly and is it cheaper than wire transfer to receive payments? Join us as we answer that and a lot more in this detailed blog post

ACH's full form is Automated Clearing House. It's also called Automated Clearing House Network because it can process a comprehensive list of electronic financial transactions like bill payments and ACH direct deposits in the US. The<a href="https://www.nacha.org/"> National Automated Clearing House Association (NACHA)</a> based out of Reston, Virginia is the governing body of ACH and oversees the electronic fund transfer system.

ACH payments have a wide purpose beyond bank-to-bank transfers. Let's look at a few of the types of ACH payments in this section:

With the ACH network, you can pay bills online and automate recurring expenses like utility bills, rent, and subscriptions. This way your bills get paid on time without worrying about when is the next bill due for payment. For example, you can authorize the electric utility company to deduct the bill amount each month from your bank account.

<a href="https://www.skydo.com/blog/everything-about-ach-payments">ACH payments</a> and payroll processing work great together. It's a huge relief for businesses because employees get their salaries credited to their bank accounts on time. For example, a company running its payroll every two weeks can directly deposit the due amount to the employee's account on payday.

The IRS uses ACH to credit tax refunds to the taxpayer's bank account directly. It's a quicker and more secure alternative to processing tax refunds using paper checks. In the same way, you can also use ACH to pay taxes electronically and stay compliant with the tax laws.

Loan repayments are another popular example of ACH payments. You can set up automatic withdrawals for loan repayment instalments so that the mortgage lender gets paid on time and you avoid late payment penalty charges.

Deposits Into An Individual Retirement Account (IRA)

If you're planning to contribute to your Individual Retirement Account (IRA) consistently, then ACH transactions are a great choice. Using this option, you can contribute funds from your account to your IRA account and build the corpus over time.

Using ACH for daily business transactions like paying vendors or receiving money from customers is also common. For example, if a business gets a $2,000 invoice from their vendor, they can authorize an ACH transfer so that the funds are settled quickly. There is no need to manage checks or cash to make the payment.

There are two broad types of ACH transfers: ACH direct deposit and ACH direct payments.

In this type of ACH transfer, the funds are electronically deposited into the recipient's bank account. This is most commonly used by a business and government entity to transfer money into consumer's accounts.

Here's a list of the most popular ways of using ACH Direct Deposits:

Paychecks: Businesses use direct deposit to process payroll payments of employees. Salary is credited to their employees' bank accounts according to the payday

Employer-Reimbursed Expenses: Apart from salary, businesses also use direct deposit to reimburse their employees if they have incurred expenses for work-related activities

Government Benefits: Government benefits like disability payments or unemployment compensation are directly credited using this transfer method

Tax Refunds: If a taxpayer is liable for tax refund, they have the option to receive the amount directly to their checking or savings account using ACH direct deposit

Annuity Payments: Annuity payments are made to investors at a set interval consistently. You can ask the insurance or the asset management company to use ACH to transfer the annuity to your account directly

Interest Payments: Similar to insurance companies, banks also make interest payments using the ACH direct deposit route.

Individuals, businesses or other entities use ACH Direct Payments to make payments from their bank account directly. This is a popular technique for making bill payments and loan repayments.

Here's the expanded list of the most popular ways of using ACH Direct Payments:

Bill Payments: With the user having the freedom to set automatic payment instructions, ACH direct payment is the most popular way to manage recurring expenses like utility or credit card bills

Vendor Payments: Businesses use ACH to pay their vendors and suppliers. The money is directly cut from their account and credited to the receiving bank account without manual work

Charitable Donations: Many charitable organizations give donors an option to set ACH direct payments to make money transfers consistently.

Online Purchases: If an online retailer accepts ACH direct payment, then you can complete the transaction by paying the money directly from your bank account.

There are two ways to make payments using ACH: one-time payments and ACH mandates. Let's understand each of them individually:

One-time payments are single transactions initiated when you receive the notification for bill payment. For example, when you receive a credit card statement, you decide how much to pay and then authorize the amount to be deducted from your bank account.

ACH mandate is useful when the billing amount is fixed and recurring. As you know how much amount will be auto-debited from your bank account, you can enter into a recurring payment arrangement with the billing company. In this payment arrangement, you authorize the company in advance to deduct the amount from your bank on a specific date. This is useful for paying regular expenses like car loans, mortgages or subscription services.

What Are The Charges For ACH Payments and Transfers?

Typically, you don't have to pay any charges for ACH payments and transfers. However, some service providers can charge fees for initial set-up. If you're receiving money in India through ACH bank debit, platforms like<a href="https://www.payoneer.com/en-in/about/pricing/"> Payoneer</a> can charge a 1% fee on the amount. Other payment platforms like Skydo, allow you to receive money in India through ACH bank debit without any additional cost.

ACH return charges are levied when the funds return to the originator's account for reasons like not having enough balance, incorrect account information or non-existent accounts. The charges for debit returns differ from one bank to another but typically range between $2 to $5. However, a bank may charge even more in case of repeated returns.

What Are The Advantages Of ACH Transfers?

ACH transfers come with a long list of advantages, but here are the top three that you must know:

Using ACH direct deposits and direct payments are mostly free for individuals. Even for businesses, ACH is a cost-effective technique for managing payments and receiving money from others. According to the NACHA, ACH costs businesses between<a href="https://www.nacha.org/news/ach-costs-are-fraction-check-costs-businesses-afp-survey-shows"> $0.26 to $0.50</a> which is a lot less than issuing checks which costs between $2.01 to $4.

In ACH transfers there are no physical transfers of money or checks involved, so there is less risk for theft or loss. Besides there are ample security measures implemented like following strong encryption to protect sensitive information. There are other protocols like Multi-Factor Authentication (MFA) which adds an extra layer of security to protect your data from unauthorized access from bad actors.

Traditional ACH transfers take one or two business days to process. Banks and other financial institutions have also started offering the<a href="https://www.nacha.org/same-day-ach"> Same Day ACH</a> for making bill payments or receiving money up to $1 million on the same day. The swiftness of the ACH infrastructure is mostly beneficial for businesses as they can make urgent payments or have better control over managing funds.

What Are The Disadvantages Of ACH Transfers?

ACH transfers also come with a list of disadvantages, here are the top three:

Banks and other financial institutions usually impose transaction limits on ACH transfers. These limits can vary as daily, weekly or monthly depending on the institution. If your ACH transfers hit that limit, you are not allowed to make further transactions within the specific time frame

Penalty for frequent transfers and breach of limit

In addition to transaction limits, the bank or financial institution may impose other thresholds. If a user, breaches these limits frequently, the bank might charge penalties or even stop the account from making further ACH transactions. This could be a matter of hindrance for companies that have to make many frequent online payments.

It Can Be Slow Due to Bank Processing Time and Batch Payments

ACH payments are mostly processed in a batch. It means several ACH transactions are batched together in a particular time frame and settled individually. If you are initiating an ACH transfer after the cut-off time, it might be settled on the next business day.

Here's a quick comparison of ACH and Wire transfer:

Receive Payments From The US In India With Skydo

Working with US clients? International payments don’t have to be a hassle. Skydo makes it simple, cost-effective, and seamless. Set up a virtual account in just 5 minutes and start receiving payments from the US, Europe, Singapore, and Australia—no complex banking required.

With live Forex rates and no hidden fees, Skydo ensures you get the most value for your money. Plus, compliance is effortless with instant FIRA downloads after every transaction, keeping you RBI-compliant without the headache. Need help? Your dedicated representative is just a call away.

Say goodbye to high fees, delays, and red tape. With Skydo, you can focus on growing your business while we take care of the payments!

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When you export from India, regardless of the product or service, the invoice you send matters, not just for your client but also for GST compliance, customs documentation, and foreign exchange tracking.&nbsp;

One field that often confuses many new exporters and freelancers is the HSN code (also known as Harmonised System of Nomenclature). You may wonder:&nbsp;

Will it impact my GST (Goods and Services Tax) refund?

This blog clearly breaks down the concept of HSN code, the importance of HSN, and provides action steps to help you prepare your export invoices correctly and avoid delays.

What Is the Full Form of HSN? (And Why It Exists)

HSN full form is Harmonised System of Nomenclature. It's a globally accepted uniform classification system that identifies and categorises goods for customs and GST. It helps freelancers and exporters receive payments from abroad without unnecessary delays.

HSN came into effect in 1988, developed by the <a href="https://www.wcoomd.org/">World Customs Organization (WCO)</a>, and is now used by over 200 countries, including India.&nbsp;

If you are not familiar with the term HSN and its meaning, let us break it down for you:&nbsp;&nbsp;

For Indian freelancers and exporters, HSN codes are used in GST filings, export invoices, and most importantly, the documentation your client's bank needs to process your payment.&nbsp;

How to Read an HSN Code: Meaning of All 4, 6, and 8 Digits

In India, you need to use 8-digit HSN codes, where the first two digits represent the relevant HSN chapter, the next two are the heading, the following two are the subheading, and the last two digits are the customs tariffs.

Let us break down the digits of the HSN code 22021010&nbsp; for you:&nbsp;

The best part is that the HSN number speaks the same language everywhere, whether you're sending website designs to a startup in Berlin or software code to a company in New York. 

Your invoice looks professional, your payment gets processed without question in a systematic manner, and you avoid those dreaded "clarification needed" emails that delay your money.

HSN vs SAC Code – Which One Applies to You?

This is a common confusion, especially among freelancers and SaaS companies. Here's the simple breakdown of HSN code list:

But you'll use HSN codes instead if you're shipping physical products - handmade jewellery, organic spices, or textile products.

💡Quick tip: All SAC (Service Accounting Code) codes start with "99"; that's your first clue you're dealing with services. The eight digits of the correct HSN code are mandatory for exports and imports, while SAC codes are 6 digits and mandatory for service providers with a turnover above ₹5 crore.&nbsp;

When Are You Required to Use HSN or SAC in Export Invoices?

You must mention the HSN or SAC code in your export invoice if:

The GST portal doesn't auto-fill this stuff for you, and missing it means your refund application sits in "pending clarification" limbo.

<a href="https://www.gstn.org.in/assets/mainDashboard/Pdf/GST%20e-invoice%20System%20-%20FAQs.pdf">For smaller freelancers</a> (under ₹1.5 Cr turnover): Small taxpayers with an annual turnover below Rs. 1.5 crore are exempt from mentioning the HSN code in their invoices and returns by the tax authorities. But if you're exporting services and want GST refunds, you'll likely need these codes anyway for zero-rated supply claims.

<a href="https://eztax.in/gst/gst-rate-hsn-sac-finder">The penalty reality</a>: A penalty of Rs 50000 (Rs 25000 under CGST and Rs 25000 under SGST) would be levied for not mentioning HSN/SAC or wrongly mentioning it in GST Returns and Invoices used for taxation purposes.

Missing or using an incorrect HSN/SAC code can cause rejections at customs, hold up your client's payment processing, and trigger those dreaded "document discrepancy" emails from banks.