Updated: 14th November 2025 Foreign Inward Remittance Certificate (FIRC) is a key term for anyone in India receiving payments from abroad,&nbsp; be it exporters shipping goods overseas or freelancers offering services to international clients.

Are you dealing with international payments and confused by terms like FIRC? If you’ve ever received money from abroad for your business or freelance work, you might have been told to get a FIRC. Don’t worry – you’re not alone in finding this acronym puzzling. In this conversational guide, we’ll demystify Foreign Inward Remittance Certificates (FIRC) – explaining what they are (including the full form and meaning), why they’re important, who needs them, and how to obtain one. By the end, you’ll know exactly why FIRC matters for Indian exporters, freelancers, small businesses, and even accountants handling cross-border transactions. Plus, we’ll share tips on making the whole process much easier (hint: there are modern solutions that do the heavy lifting for you). Let’s dive in!

Let’s start with the basics: FIRC stands for Foreign Inward Remittance Certificate. It’s essentially an official document from an Indian bank that confirms you’ve received a payment from abroad. Think of it as a receipt or proof of an inward remittance (foreign money transfer) into your Indian bank account.

In practical terms, a FIRC contains details of the foreign payment you received – such as the amount in foreign currency and INR, who sent the money (the sender’s name and country), who received it (your name/business name), the date, and the purpose of the payment. It’s issued by your bank (specifically, banks authorized to deal in foreign exchange, known as AD Category I banks) whenever you receive money from overseas.

In simpler words: if a client overseas wires you funds for an export or a freelance project, the FIRC is the document from your bank saying “Yes, we’ve got the money from abroad, and here are the details.” It’s an official proof that foreign funds landed in India into your account.

Quick note: Sometimes people use “FIRC” loosely to also refer to similar documents like a foreign inward remittance advice (FIRA).&nbsp; Essentially, all these serve the same purpose – proving that an international payment was received. We’ll explain the differences in a bit, but generally if someone asks for a FIRC, they mean the proof of a foreign payment credit.

Whether you are an Indian exporter, a freelancer providing services globally, or a small business owner, obtaining a FIRC (or its equivalent advice) for your foreign earnings is very important. Here are the key reasons why a FIRC matters so much:

In summary, a FIRC is more than just a piece of paper. It’s crucial for compliance, unlocking financial benefits, and keeping clean records of your foreign income. In India’s regulated foreign exchange environment, this certificate (or its digital equivalent) becomes a cornerstone for anyone transacting internationally.

Now that we know why it’s important, you might wonder: “Do I actually need a FIRC?” If you fall into any of the following categories, the answer is likely yes:

In a nutshell, any Indian individual or business receiving money from outside India should obtain a FIRC for each such inward payment. This spans everyone from large export firms to freelance graphic designers paid via PayPal. It’s a best practice even if not mandatory in every case, because it’s your safety net and proof if questions arise later.

FIRC in India: RBI Guidelines and the Switch to FIRA

It’s important to understand how FIRCs are handled in India today, because there have been regulatory changes in the past decade. Historically, banks issued a physical FIRC on security paper for every foreign inward remittance received against exports. However, since 2016, the RBI changed the process for most cases. Let’s break down what that means:

You might also have seen the term e-FIRC. This is a bit tricky because e-FIRC isn’t a separate document you receive in hand – it’s more of a concept/number in the background banking systems.

For most small businesses or freelancers who use a single bank (or a single platform) to both receive funds and handle paperwork, you may not need to worry much about the term “e-FIRC” – your bank’s advice and the automated systems take care of it. Just know that it refers to the electronic trail of your remittance in RBI’s systems.

Two acronyms that often come up together in export finance are FIRC and BRC. They are related but serve different purposes, and it’s important not to confuse them:

In simpler terms, think of it as a two-step chain: First, you get the FIRC/FIRA when money comes in. Then, that leads to a BRC which connects the money to a specific export transaction.

For example, suppose you shipped 100 units of a product on a certain date (your shipping bill records this) and later you got USD 1,000 for that shipment. When the $1,000 arrives, your bank gives you a FIRA confirming receipt. You then inform the bank (or it knows via systems) that this $1,000 corresponds to that shipping bill. The bank updates the records and an e-BRC is generated which you can download from the DGFT portal as proof that the export transaction is closed with payment received. Why is BRC needed? Because to claim many export incentives or to fulfill export obligations, you have to show BRCs to the government – it proves you not only exported but also got paid for it.

Bottom line: FIRC (or FIRA) confirms money received; BRC confirms that money was tied to an export. Both are important for exporters of goods (first you get FIRC, then BRC to claim benefits). Freelancers and pure service exporters mostly just handle FIRCs unless they are in scenarios that require reporting exports formally.

&nbsp;You can use this decision tree to decide which one do you need.&nbsp;

FIRC Certificate Format:&nbsp; What Information Does it Include?

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: 

If you’ve never seen a FIRC or FIRA document, you might wonder what it looks like and what details it carries. While formats can vary slightly from bank to bank, a typical FIRC/FIRA document (usually a PDF or letter these days) will include the following key information:

A modern FIRA might not have the word “Certificate” on it, but it contains the same info as the old FIRC. Some banks still title it “Certificate of Foreign Inward Remittance” even if it’s a PDF. In any case, all the above details are what make it valuable – ensure everything matches your expectations when you receive one (more on that in a moment).

How to Obtain a FIRC (Procedure to Get the Certificate)

Obtaining a FIRC or FIRA for a foreign payment is not always automatic – often, you’ll need to request it from your bank. The process can vary slightly by bank, but here’s a general step-by-step guide for Indian businesses or freelancers:

1. Receive the Foreign Payment: This might sound obvious, but you can only get a FIRC after the money from abroad has credited to your bank account in India. So, first step – make sure the funds have arrived. Note down the transaction details like the date of credit, the amount in foreign currency and INR, and any reference number (UTR) if available. This info will be needed for the request.

2. Contact Your Bank to Request the FIRC/FIRA: Reach out to your bank’s branch or your relationship manager and let them know you need a FIRC (Foreign Inward Remittance Certificate) or advice for a particular transaction. Many banks have a specific form or format for this request. Depending on the bank, you might do one of the following:

In your request, you’ll generally need to provide:

Tip: If your bank has a mobile app or online banking, search for terms like “FIRC request” or “Remittance Certificate” – some banks have digitized this. Otherwise, a quick email to your branch manager with the details might do the trick.

3. Provide Supporting Documents (if required): Banks might ask for some documents to ensure the request is legit and to attach as proof of the transaction’s purpose. Common ones include:

Not every bank will ask for all of these – often if the transaction was straightforward and coded correctly, a FIRC request might go through with just the form. But don’t be surprised if they ask for an invoice copy or such, especially for higher amounts or the first time you’re requesting.

4. Pay the Bank’s Fee (if any): Here’s the part not everyone realizes: many banks charge a small processing fee for issuing a FIRC/FIRA. The fee varies by bank but is typically in the range of ₹200 to ₹500 per certificate, plus GST. For example, one bank might charge ₹300 + taxes for each FIRC. Some banks waive it for premium account holders or in special cases, but generally expect a fee. Usually, the bank will deduct this fee from your account or ask you to pay it upfront. When you fill the request form, it might mention the fee or your branch will inform you. (As a rough timeline, after you request, it often takes around 1–2 weeks for the bank to issue the FIRC. Some get it done in just a few days, but don’t bank on it – pun intended!)

Good News: If this process sounds a bit old-fashioned, you’re right – it can be tedious. But lately, some fintech platforms and modern banking services offer FIRA certificates for free and instantly as a perk. (We’ll talk more about that in a moment when discussing easier ways.)

5. Wait for the Certificate to be Issued: Once you’ve submitted the request (and any docs and fees), the bank’s forex operations team will verify the details. They’ll match the info you gave with the actual inward remittance record. If everything checks out, they will generate the FIRC (or FIRA). Nowadays, this is usually a PDF document on the bank’s letterhead with a digital signature, which they might email to you or make available for download (some still might print it for collection at the branch if you specifically need a hard copy). The time frame can vary:

Keep an eye on the email you provided (and check the spam folder just in case, since it’s often an automated email with a PDF attachment).

6. Verify the Details on the FIRC: When you finally receive the certificate/advice, do not skip this step! Carefully check all the details:

If you spot any error (typos in your name, wrong amount, incorrect purpose code, etc.), contact the bank immediately to correct it. It’s important the FIRC reflects the truth of the transaction. Banks can issue an amended FIRC if needed, but you may have to give proof of the correct info (for instance, if your name was spelled wrong, you might send a copy of your PAN or passport; if the amount in INR is off, maybe a statement copy). It’s best to catch errors early and have them fixed, so you don’t run into problems later when using the FIRC for official purposes.

7. Use the FIRC for Your Needs: Once you have the FIRC/FIRA in hand (or in email):

In short, use the FIRC anywhere you need to prove “I got paid from abroad for X purpose.” It’s your golden ticket for compliance and benefits.

8. Remember: One FIRC = One Transaction: If you receive multiple foreign payments, you will generally need to request separate FIRCs for each. Say you’re a freelancer who got five different payments from five clients – you’d have five FIRC documents (and possibly five fees…). Some payment aggregators or services might give a consolidated statement for multiple small payments, but banks usually treat each inward remittance as a separate record and issue individual certificates.

Getting FIRC the Easy Way (Automatic FIRC with Modern Platforms)

At this point, you might be thinking, “Wow, that’s a lot of steps and wait time just to get a certificate!” 🤯 Indeed, dealing directly with banks for FIRCs can be slow and involve charges. Here’s where fintech solutions come to the rescue.

Platforms like Skydo offer a much smoother experience for handling foreign payments. For instance, when you receive an export payment through Skydo, the FIRC (or FIRA) is generated for you automatically – and at no extra cost. It’s basically built into the process. You don’t have to file separate requests or wait weeks. As soon as the payment is received and processed, you can log into your Skydo dashboard and download the remittance advice instantly. All the details (amount, purpose, etc.) are neatly recorded, compliant with RBI rules, without you lifting a finger to request it.

This kind of solution is a game-changer for freelancers and small businesses: you get paid faster (since such platforms often streamline the transfer) and you get the FIRC document instantly for each transaction. No bank queues, no follow-ups, no fees per certificate. If you’re frequently dealing with international clients, using a modern global payments platform can save you a lot of headaches when it comes to compliance paperwork like FIRCs.

Is FIRC Mandatory for GST Refunds and Other Purposes?

One common question that arises is whether having a FIRC is mandatory for certain claims, especially the GST refunds on exports. The short answer: Yes, if you’re claiming a refund or benefit on the basis of an export, you’ll need proof of foreign inward remittance – usually in the form of FIRC/FIRA.

When you export goods or services from India, those exports are considered “zero-rated” for GST, meaning you don’t have to pay GST on the sale. However, you might have paid GST on inputs (input tax credit) and you’d want to get that refunded since your output was zero-rated. To process this refund, the tax authorities require evidence that you indeed received payment in convertible foreign exchange for that zero-rated supply. FIRC is that evidence. It authenticates that the money entered India’s banking system against your export.

Here’s how it typically works for a GST refund on exports:

If you don’t have a FIRC to show and try to claim a GST refund, the claim likely won’t be accepted because you haven’t furnished proof of realization of export proceeds. It’s a critical document for this purpose.

Similarly, for other schemes like certain subsidies or duty credits for exporters, the requirement is often to show the BRC or FIRC to prove that the export was completed monetarily.

For freelancers or service exporters who may not deal with GST refunds (if, say, you’re below GST threshold or exports of services under LUT), it might not feel “mandatory” day-to-day. But consider that under income tax or any scrutiny, you’d still want that FIRC as proof of earnings. Also, tomorrow if you do register for GST and want to claim something, having FIRCs from the past means you’re prepared.

In summary: For compliance and benefits, having FIRCs is effectively mandatory. It’s part of the paperwork you should maintain if you earn in foreign currency. And specifically for claiming GST refunds on exports, a FIRC is usually non-negotiable.

Conclusion:&nbsp; Making FIRC Hassle-Free

Dealing with cross-border payments can seem daunting at first – there’s compliance to consider and extra paperwork like FIRCs to manage. But understanding the ins and outs of FIRC means you’re now equipped to ensure every dollar, euro, or pound you earn overseas is properly documented without stress.

The good news is that you don’t have to wrestle with these processes alone. As the world of international business is evolving, so are the tools to manage it. Your focus should be on growing your business or honing your craft – not on chasing bank certificates. That’s exactly why platforms like Skydo exist: to simplify global payments and the red tape that comes with them.

With Skydo, for example, you can enjoy seamless international payments with no hidden fees, and every time you receive a cross-border payment, an auto-generated FIRC (remittance advice) is instantly available for you. No special requests, no fees per certificate, no delays – it’s just there, ready to download when you need it. This means you remain fully compliant with RBI rules effortlessly, and you can devote your energy to what truly matters: delivering great products or services and scaling your venture.

In conclusion, a Foreign Inward Remittance Certificate is a vital piece in the jigsaw puzzle of doing business globally from India. It ensures your hard-earned foreign revenues are officially recognized and securely in your pocket (or rather, your bank account). By staying informed and leveraging modern solutions, you can turn what used to be a cumbersome process into a minor footnote in your workflow. Happy exporting (or freelancing), and may all your international payments come with an easy FIRC! 🚀

What is FIRC? Learn the full form, meaning, and how Indian exporters & freelancers can get FIRC or FIRA to claim tax benefits and stay RBI-compliant.

FIRC Full Form, Meaning & Guide for Exporters

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

Imagine you're trying to grow your export business, and suddenly you're overwhelmed with all these acronyms like EPC, SEPC, and FIEO. Meanwhile, you just want to know: will the RCMC registration certificate help your business, or is it just another compliance headache?

Whether you're exporting software, design services, or physical goods, an RCMC registration certificate unlocks genuine benefits. But it's not mandatory for everyone, and the decision depends on what you're actually trying to achieve.

This guide is actionable, non-technical, and tailored for real use cases. By the end, you’ll know whether you need RCMC registration, which council to choose, and how to avoid costly mistakes during the RCMC registration process. 

RCMC stands for Registration-Cum-Membership Certificate. Think of it as your official membership card to India's export ecosystem.

RCMC is issued by government-authorised bodies that promote exports in specific sectors. The <a href="https://www.dgft.gov.in/CP/">Director General of Foreign Trade (DGFT)</a> has authorised 35 organisations to issue RCMCs, and these fall into three main categories:

<a href="https://www.commerce.gov.in/useful-links/export-promotion-councils/">Export Promotion Councils (EPCs)</a>: These handle most product and service categories. For example, if you're exporting software or IT services, you'd get your RCMC from the <a href="https://www.escindia.in/">Electronics and Computer Software Export Promotion Council (ESC)</a>. It's the <a href="https://www.servicesepc.org/">Services Export Promotion Council (SEPC) </a>if you're in services like consulting or design.

Commodity Boards: These focus on traditional exports like spices, tea, and coffee. So if you're exporting cardamom or Darjeeling tea, you'd go to the respective commodity board.

Development Authorities: These handle specialised sectors like <a href="https://apeda.gov.in/">APEDA</a> for agricultural products or <a href="https://mpeda.gov.in/">MPEDA</a> for seafood exports.

The government has divided India's export ecosystem into 35 specialised departments, each responsible for promoting and regulating exports in its area. Your RCMC comes from whichever department covers what you export.

If an exporter deals in multiple products across various EPCs, FIEO can issue the RCMC. <a href="https://fieo.org/">FIEO (Federation of Indian Export Organisations) </a>can issue the RCMC. Think of FIEO as the "miscellaneous" category; it's designed for exporters who don't fit into the standard 35 specialised councils.

The RCMC is valid from the issuance date on the 1st of April of the licensing year and is valid for five years, concluding on the 31st of March. So you're not dealing with annual renewals; once you get it, you're set for five years.

For example, if you apply for RCMC in December 2024, your certificate will be valid from April 1, 2024, to March 31, 2029. Even though you applied in December, the validity starts at the beginning of that financial year (April 1st) and runs for a full five-year cycle.

If you apply late in a financial year (say, in February), you'll get a shorter first year but then a whole five-year period. It's tied to India's financial year calendar, not your application date.

RCMC is mandatory for some export schemes and benefits, but optional for others. You can technically export without it, but you'll miss out on government incentives, duty benefits, and access to trade promotion activities that could grow your business.

The short answer is: it depends on your goal.&nbsp;

You want to claim benefits under export promotion schemes

This is where RCMC becomes non-negotiable. Certain schemes require compulsory RCMC registration. 

For example, participating and claiming reimbursement under&nbsp;<a href="https://www.commerce.gov.in/international-trade/trade-promotion-programmes-and-schemes/trade-promotion-programme-focus-cis/market-access-initiative-mai-scheme/">Market Access Initiative (MAI)</a>&nbsp;requires RCMC.&nbsp;&nbsp;

Further, if you're using schemes like <a href="https://www.dgft.gov.in/CP/?opt=adnavce-authorisation">Advance Authorisation</a> (where you import raw materials duty-free for exports) or <a href="https://www.dgft.gov.in/CP/?opt=epcg">EPCG (Export Promotion Capital Goods)</a>, RCMC is mandatory.

You deal in products/services that fall under a specific Export Promotion Council

RCMC is compulsory for certain products. For example, Exporters of handicrafts and handloom products may need RCMC from the Handloom Export Promotion Council or the relevant authority in Jammu &amp; Kashmir.

Similarly, exporters of tea need RCMC from the Tea Board of India, and exporters of spices require an RCMC from the Spices Board of India. 

You want to participate in DGFT/Ministry-sponsored trade fairs, delegations, and buyer-seller meets

To qualify for MAI Scheme benefits like participating in shows abroad, exchange fairs, and business delegations, an exporter must hold an RCMC for at least one year.&nbsp;

You're exporting services under no specific scheme and aren't availing benefits

Suppose you're a freelance designer working with international clients through platforms like Upwork or a small software consultancy doing project work, and you're not claiming any government incentives. In that case, you can technically operate without RCMC. RCMC is not required for exporters who are not claiming any benefit under FTP and are voluntarily not seeking EPC/Board support.

You're just starting with occasional freelance projects

&nbsp;If you're testing the waters with small-scale service exports and haven't decided whether you want to scale this into a serious business, you should wait. But here's the thing, even freelancers often hit the limits of what they can do without RCMC faster than expected.

For schemes like RoDTEP, Duty Drawback, etc.&nbsp;

Last year, the DGFT clarified that <a href="https://economictimes.indiatimes.com/news/economy/foreign-trade/registration-cum-membership-certificate-not-mandatory-for-exporters-to-seek-scheme-benefits-dgft/articleshow/114054223.cms?from=mdr">RCMC registration is not required </a>to claim benefits under schemes like RoDTEP, Duty Drawback,&nbsp;RoSCTL

Which Export Promotion Council Should You Register With?

Once you've decided you need RCMC, the next crucial step is choosing the right Export Promotion Council, because your RCMC comes from them, not directly from the Indian government. Get this wrong, and you'll either face delays or end up with the wrong benefits entirely.

Many exporters struggle with this: staring at a list of 26 Export Promotion Councils and 9 Commodity Boards, wondering where they fit in. However, it's actually simpler than it looks once you understand the basic rule: choose based on what you export, not your company type.

For Service Exporters: If you're exporting services like consulting, design, marketing, or digital services, SEPC is your go-to. If you're developing software products (not just providing development services), you might fall under ESC instead.&nbsp;

For Product Exporters: If you're exporting physical goods, match your primary product to the relevant council. The councils are pretty specific, carpets go to CEPC, textiles go to AEPC, and engineering goods go to EEPC India.

The FIEO Option: FIEO (Federation of Indian Export Organisations) is the wise choice for many exporters. You need FIEO when:

Multi-product exporters often assume they need multiple RCMCs from different councils. Not necessarily true. You can get separate RCMCs from each relevant EPC or a consolidated RCMC from FIEO. The Government recognises FIEO as an Export Promotion Council specifically for this purposethey handle the "miscellaneous" category and multi-product scenarios.

Even if you pick the "right" council initially, you're not locked in forever. Your business evolves, your export focus changes, and you can always register with additional councils or <a href="https://www.skydo.com/blog/how-to-find-buyers-for-service-export-from-india">switch to FIEO</a> if that makes more sense.

Access to government subsidies under MAI and other schemes

Market Access Initiative (MAI) covers airfare, stall costs, and registration fees for international exhibitions. We're talking about reimbursements that can run into lakhs for a single trade fair. SEPC members get subsidised participation in international exhibitions and buyer-seller meets, where actual business happens.

Participation in international trade events at subsidised rates

<a href="https://www.epch.in/">EPCH</a> organises the Indian Handicrafts &amp; Gifts Fair with thousands of international buyers. Without RCMC, you're paying full price (if you can even get in). With it, you get subsidised stalls and priority access.

Getting an RCMC from export promotion councils like ESC or SEPC isn’t just a formality—it gets you listed in official directories that international buyers actually refer to. 

ESC’s 2000+ members from the Electronics and Computer Software/ITeS industry are part of searchable export databases. SEPC goes a step further by facilitating global market access through collaborations with Indian Embassies.
No RCMC, no listing. No listing, no visibility,&nbsp;

Easier to apply for export incentive schemes, trade finance, and certifications

RCMC is often a prerequisite for bigger benefits. Want to apply for the Interest Equalisation Scheme? You'll need RCMC. Looking at Export Promotion Capital Goods (EPCG) benefits? RCMC required. It's your gateway document.

EPCs don't just give you a certificate and disappear. They actively work on your behalf, lobbying for policy changes, organising events, providing market intelligence, and connecting you with buyers. SEPC members are eligible for visa facilitation for their international business visits, which can cut weeks off your travel planning.

Step-by-Step: How to Apply for RCMC in 2025

Since 2022, almost everything has happened through the <a href="https://www.dgft.gov.in/CP/">DGFT's common digital platform</a>, which means no more running between offices with a physical application form.

Step 1: Get an IEC code from DGFT website (mandatory)

You can't even start without this. <a href="https://www.skydo.com/blog/iec-code-apply-online">IEC (Import Export Code)</a> is your basic export license, a prerequisite for RCMC. If you don't have one, apply through the DGFT portal first.

Step 2: Identify the correct EPC for your sector

Use the table from the previous section. When in doubt, FIEO works for most multi-product or unclear scenarios. Remember: it's based on what you export, not your company structure.

Step 3: Prepare required documents

💡Pro tip: Most rejections happen because of incomplete documentation. Get your CA to certify your export data upfront, even if it's zero.

Step 4: Apply on the DGFT's e-RCMC portal

Since 2022, almost all councils have used the common DGFT platform at dgft.gov.in. Here's the reality:

The fee structure is pretty straightforward: Most councils charge similar amounts. SEPC, EEPC, and others typically range from ₹2,500-₹5,000 per year, with some offering multi-year discounts.

The official line is "5-7 working days," but here's what usually happens:&nbsp;&nbsp;

The certificate gets issued electronically through the portal. You'll get email notifications, and you can download the certificate directly from your dashboard.

Keep your IEC profile updated on the DGFT portal before applying. Half the delays happen because of a mismatch in information between your IEC and RCMC application form.

📚Note: The process is smooth primarily now, but each council has slight variations in its document requirements. Check the specific council's requirements on their section of the DGFT portal before uploading documents.

Common Mistakes to Avoid in Your RCMC Registration

Here are the common RCMC registration mistakes you must avoid:

This happens more than you'd think. A software company registering with EEPC instead of ESC, or a design consultancy going to FIEO, when SEPC would be better. The councils are specific for a reason—wrong choice means wrong benefits, network, or everything.

RCMC validity is on a financial year (FY) basis, meaning it expires on March 31st. If you get your RCMC in December, it expires the following March, not 12 months later. Members are advised to renew their membership well, e.g., before 31st March, to avoid any disruption in shipment/trade-related services. If you miss the renewal deadline, your shipments could get held up.

Missing export opportunities by not joining SEPC if you export services

This is the big one for freelancers and consultancies. You're focusing on getting clients while missing out on Government of India subsidies for international marketing, trade fair participation, and export incentives. SEPC provides opportunities to participate in policy formulation and influence favourable trade policies; you want a seat at that table.

&nbsp;Assuming FIEO is always the fallback option

FIEO works great for multi-product exporters, but the specialised councils offer better networking and more relevant benefits if you have a clear sector focus. Don't go generic when you can go targeted.

Members must submit a certificate from a Chartered Accountant certifying the annual export turnover for the financial year. This isn't just paperwork; councils use this data to advocate for your sector and determine fee structures.&nbsp;

Make the Most of Your Export Payments with Skydo

Once you’ve got your RCMC sorted and start landing international clients, a new challenge shows up: getting paid without losing a chunk of your earnings.

Banks often slip in hidden forex markups and confusing fees. You may not even realise how much you're losing, sometimes as high as 1–8% of every payment.

That’s why many exporters now use platforms like Skydo. You get global bank accounts in major countries like the US, UK, and Canada set up in minutes. Payments come in faster, fees are transparent, and everything’s trackable.

It also takes care of compliance. FIRA is generated instantly, and you’re not chasing paperwork weeks later.

For many businesses, that’s meant real savings, up to ₹10 lakh a year. Not magic. Just money that’s no longer leaking through the cracks.

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softex form guide for Indian exporters

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.

How to Find the Right HSN or SAC Code for Your Business

Start by typing a simple description of what you're selling. The revamped Search HSN tool algorithm is based on Artificial Intelligence and Machine Learning linked with the e-invoice declaration database, so it learns from other taxpayers' use.

Here are some commonly used codes for Indian exporters that play a crucial role in your tax invoicing process:

Most freelancers fall under 998313 (IT consulting) or 998314 (software development). If you're doing social media management, SEO, or digital marketing campaigns, 998365 is your go-to for advertising services.

💡Pro tip: If you're doing mixed work - like building a website AND doing digital marketing for the same client - use 998314 for the development part and 998365 for the marketing part.&nbsp;

Don't try to fit everything under one SAC code; that's how you'll end up with GST notices asking for "clarification."

The GST portal's search is quite intelligent now. Type "web design" and it'll suggest 998314. Type "social media marketing" and you'll get 998365.&nbsp;

Where to Put the HSN/SAC Code in Your Invoice (Export-Focused)

Here's the practical placement guide that matters for getting your payments processed:

Mention it next to each line item in the invoice&nbsp; You can add an HSN/SAC code for each line item by clicking on the Plus sign at the line level.

Include it in shipping bills and customs declarations&nbsp; All eight digits of the HSN code are mandatory in case of export and imports under the GST.

A mismatch can result in refund hold-ups or compliance notices.

Real-world example: Suppose you're billing a client for website development. In your export invoice, you'll show:

Line 1: Website Development Services - SAC 998314 - ₹1,00,000

This same SAC code (998314) must appear in:

Taxpayers will see alert messages if there is a mismatch between the values reported in Table 12 and other tables of GSTR-1.&nbsp;

Beginning January 2025, the third phase of HSN validation will become effective, further emphasising precise HSN code reporting for businesses. The system now auto-validates everything, so those minor inconsistencies that used to slip through? Not anymore.

💡Pro tip: Set up your invoicing software to auto-populate the same HSN/SAC code across all documents. Most accounting software, like Zoho Books or ClearTax, allows you to auto-populate HSN/SAC codes when you create transactions. It's worth the setup time to avoid compliance headaches later.

Use the same code everywhere, every time. Your future self (and your CA) will thank you when refund season comes around.

Here are the mistakes that'll cost you time, money, and sleep:

Leaving the HSN/SAC field blank, especially in zero-rated export invoices&nbsp;

No, a GST bill will not be valid without an HSN code for the tax administration. This is non-negotiable for exports. Freelancers can lose weeks chasing down stuck payments because they left this field empty.

Using incorrect codes based on guesswork or copying other businesses&nbsp;

Just because your friend uses SAC 998313 for "web development" doesn't mean it's right for your mobile app development work (which should be 998314). The GST rates portal now auto-validates everything, so guesswork gets caught instantly.

Using HSN when you're exporting services (should use SAC)&nbsp;

HSN codes are used to classify goods, whereas SAC codes are used to classify services. Using SAC codes to export IT services, digital marketing, or any other service. HSN is only for physical goods.

Not updating codes when your product/service offering changes&nbsp;

I started as a freelance writer (SAC 998319 - other professional services) but am now developing websites. Update to SAC 998314. The system tracks everything, and inconsistencies trigger compliance notices.

Simplify Export Payments with Skydo&nbsp;

Getting paid for your exports shouldn't cost you thousands in bank fees and poor exchange rates. Banks charge 1.2% hidden FX margins, PayPal takes 8.7%, and getting FIRA certificates is a nightmare.