[Updated on March 3rd: Paypal users will need Purpose Code to withdraw to Indian Banks]
Paypal will resume withdrawal to Indian banks for settlements for exports of goods and services (and not personal payments) by March 3rd. In order to avail the same, one would need Export Code.
“I’m pleased to tell you that the RBI has now allowed us to resume bank withdrawals for settlements for exports of goods and services. We are currently making changes to comply with Indian regulations for settlements for exports of goods and services, and we anticipate that as of Wednesday, March 3rd, we will be able to resume the bank withdrawal service. As part of the changes, you will be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal. This information is required under the current laws of India in order to identify the nature of cross-border merchant transactions.
Moving forward, the RBI has told us that PayPal needs specific approvals to allow personal inward remittances to India, which we currently do not have. Until we get these approvals, personal payments into India will remain suspended. However, if you are an exporter, you will continue to be able to use the PayPal service for payments of goods and services.” – blog
Actually, you need IE code or a FIRC (Foreign Inward Remittance Certificate) to enable transfer to Indian Banks.
How do I obtain IE Code or FIRC ?
To obtain an IE code, elagaan.com team sent us the following procedure
For Pvt. Ltd. companies
- Details of all directors (Full name, Fathers name, Residential address, phone number, email address)
- Regd office address of the company alongwith details of all the branches they have
- PAN card of the company
- Type of exporter (Merchant, Service provider, Manufacturer etc.)
- Bank account details of the company
- MoA, AoA and proper Board resolution for the same
- Bankers certificate (in specified format)
- DD of Rs. 250/- as application fees in favour of JDGFT or DGFT depending on the region in which the registered office is situated.
- An application to the concerned officer (JDGFT/DGFT) and all the papers in Duplicate set.
For Proprietorship Concerns/ Individual application:
- Details of all Proprietor (Full name, Fathers name, Residential address, phone number, email address)
- Details of address of the company/individual alongwith details of all the branches they have
- PAN card of the company/individual
- Type of exporter (Merchant, Service provider, Manufacturer etc.)
- Bank account details of the company/individual
- Bankers certificate (in specified format)
- DD of Rs. 250/- as application fees in favour of JDGFT or DGFT depending on the region in which the registered office is situated.
- An application to the concerned officer (JDGFT/DGFT) and all the papers in Duplicate set.
You can also download the application form from here.
DGFT has an online application process. The payment can be made through bank transfer which we are well used of
. In this process, if the applicant has all the relevant information the issue of IEC is instant once the online application is complete. A paper copy of the same will be sent once the printed application and supporting documents reach them.
http://www.infodriveindia.com/Notifications/New-System-for-issuance-of-17174.aspx
Maybe I was too early in guaging things. Seems there is not much information about this and application through postal means might be the only possible way.
Will post my experience as and when I go through things. Im getting it started on monday though.
Is it specific to paypal or one needs it even in case of a wire transfer from any foreign client ?
This news come as a morning surprise for me…I thought it started from today but after reading Blog post on paypal blog, realize they are expecting it to start from 3rd .. Lets wait and watch
It is quite easy to get an IEC code. We have one for our wire transfers. But be prepared for paperwork and unclear rules when dealing with inward remittance. The Banks themselves do not know how to deal with RBI circulars on payments.
We have IEC but we keep getting demands for some other export paperwork along with something called a Bank Realization Certificate for each payment. Local branch officials (ICICI) do not know what this is. There is no one even in head office who can help. It is unnerving because the bank sends these demands by courier without a contact number to get back to them.
We have to also file papers quoting our IEC code along with reason for each inward payment with the local ICICI branch. Its kind of a hassle but we got used to it, we file the same template reason every 15 days.
We also have to file nil returns for central sales tax every month along with details of each customer. I was told this is required even if your turnover is below VAT limit 5 Lakhs. Things are a bit unclear on this, but in hindsight we should not have got CST number.
For a small entrepreneur this is crushing. This is my experience selling software products from India.
If you try to access the Directorate General of Foreign Trade (DGFT) website i.e. http://dgft.gov.in/ you will get errors such as: -
“This Connection is Untrusted | Content was blocked because it was not signed by a valid security certificate | This frame was blocked because it contains some insecure content”
Strange! Is this what happens to Govt. sites because all the bright IT guys work for private sector MNCs?
Red tape! Red tape! Even Google Chrome browser turns red if you try to access the DGFT site!
Well, thats what India has become.
While Indians are busy making Western companies software superpower, their own country sucks because they work in foreign for few extra bucks.
“Few extra bucks” mentality of Indians f*cked India.
Its a shame actually.
We make software for the whole world and the websites of our own Govt. suck! What a f***ing joke!
You’re getting the error because the SSL certificate installed for this site is not from the well known onces that browsers trust. Instead, the SSL certificate installed is from a government body, hence the error as the browsers don’t recognize this entity that issues the SSL certificate.
This is the Information mail sent by Paypal after services to India resumed.
PayPal
Dear XXXXXXX,
We have been diligently working with the RBI and our business
partners to resume Indian bank withdrawals for the thousands
of Indian businesses who depend on PayPal to sell their goods
or services in the global marketplace.
Today, we are happy to announce that the RBI has allowed us
to continue local bank withdrawals for settlements for exports
of goods and services. We are currently making changes to
comply with Indian regulations for settlements for exports of
goods and services, and we anticipate that, as of Wednesday,
March 3rd, customers will be able to use our
bank withdrawal service.
As part of the changes, you will be required to fill out a
new field entitled ‘Export Code’ when you request a withdrawal.
This information is required under the current laws of India in
order to identify the nature of cross-border merchant transactions.
On Monday, March 1st, we will be back in touch with specific
instructions on how you can move your money into your bank account.
Moving forward, the RBI has told us that PayPal needs specific
approvals to allow personal remittances to India, which we
currently do not have. Until we get these approvals, personal
payments into India will remain suspended. However, if you are
an exporter, you will continue to be able to use the PayPal
service for payments of goods and services. In fact, with the
changes we are making to our system, PayPal is now set to be a
more powerful engine for exporters in India. With purpose codes
for export transactions and FIRCs (Foreign Inward Remittance
Certificates), you should now be able to get the export
related benefits you seek.
You can check the PayPal blog for additional updates.
http://www.thepaypalblog.com
We thank you for your business and for your patience during
the past few weeks.
Sincerely,
PayPal
Hi,
Useful information.
Would like to point out a minor error in this article. You have mentioned FIRC as a ‘code’. Actually it is not a code. It is a certificate which a banker issues for every single collection that comes in to the bank account from abroad in foreign currency. That’s why the name “Foreign Inward Remittance Certificate”.
FIRC has no relationship with IE code.
What Paypal has mentioned is “With purpose codes
for export transactions and FIRCs (Foreign Inward Remittance
Certificates), you should now be able to get the export
related benefits you seek.”
Note: Those who would like to obtain IE code, can contact us and we will be glad to help them.
Regards
Bala
CFO, http://www.cogzidel.in
bala@cogzidel.com
Thanks Bala. Have corrected.
Why to contact you? How much you charge to help?
Is the FIRC same as the BRC (Bank Realization Certificate) ? What documents must we normally submit to the reserve bank along with the BRC ?
Appreciate your help !
FIRC is not the same as BRC.
While FIRC is a proof of an foreign inward which could be for any nature, BRC is specific to Exports. In fact, if there is a FIRC issued for your Exports transactions, you can go to your bank and get the same endorsed against the transaction post which you get a BRC issued.
Bala , how much is the fee you charge for getting IE code..
let me know please …
thanks…
i am an individual and not a firm ..
The best way is to go the zonal DGFT office. Submit a fee of Rs. 250 via DD,and, wait, till the number comes. It will take you about 15 days to get that number.
guys , it was big scene when i tried to find the need of IE code ie import export code through tax consultants.
the website says the payment fee to get this IE code is 250 rupees with some documents and one bank letter which is really hard to get amd total time is 2 days for this code.
the tax consultants here in chennai, india says the fee range is 3000 to 12000 rupees to get this same IE code in 4 days. so , how are we going to find a solution. these people say we would be quick channel to get you the IE code and if we go directly to zonal DGFT office to get this would take a long time as more formalities are there.
some consultants say IE code is not available for individuals and it can be availed by company name current account holders only. but few consultants say you pay more money we get you this IE code for individuals too.
also i went to sbi bank to ask how to get this bank realization certicficate and the superb manager said to contact zonal DGFT and he is not responsible. it shows they do not know. not only sbi also hdfc and all private banks do not know what is happening around in rbi and other serious matters. they make money thats it. i think only the bank founder has to answer these things because he was the one who poured olive oil into eyes and kept awake for whole day to develop the banking business when it was small..
How this game is ? did any one find out this info. This is the situation in chennai , india for this .
any one else experience , please share. i want to find a solution too..
thanks
Balu,
Same here.
We have been selling our software online for about 3 years now. Our bank is ICICI. We try as much as possible to follow rules, but it seems it is impossible.
1. We get inward remittance to ICICI for software product sales.
2. ICICI calls every 15 days and asks to submit disposal instructions to local branch along with letter stating purpose of inward remittance. We studiously quote the IEC number and submit the letter.
You would think that is the end, but every so often a mysterious letter is sent by ICICI stating that we have not submitted the necessary export documents along with the BRC (Bank Realization Certificate). The letter is scarily worded as being not in line with so and so circular from Reserve Bank. Neither the local branch or the T-Nagar branch know what this is about.
Until now, I am just filing these letters. I replied to ICICI Mumbai by post (no contact number in letter) but no response.
You can contact me offline if you wish to talk.
—
I’ll tell you about my adventures with CST and VAT later.
Let me also add my auditor who is among the best in Chennai – has no idea what the RBI circular is about.
Vivek, I am receiving same kind of letter from ICICI bank. What we should do for this. Any guidance / help would be appreciated.
I dont think u are supposed to submit a BRC for export orders below 25000 $ . for expors above that, certain forms need to be submitted (softex in case of software services)..below that its not a requirement unless one is looking to get duty concessions on items imported from abroad, and i think BRC is a requirement for that.
what is the circular no. referred to in the letter ?
Balu its extemrely easy to get an IEC. No need to go through a tout, just make sure all parper work is exact.
One thing , if you do not have a service tax code, do not check the “service provider” column, they will ask for a CST then. INstead you can select the merchant provider.
Atleast thats what i have done.
We just released a detailed purpose code list for reference.
http://elagaan.com/business/purpose-codes-export-transactions
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Dear Vivek,
We regret the inconvenience caused.
Please write to us with your contact details at care@icicibank.com (Subject line: UID 267727), we’ll contact you and work to address your issue.
Regards,
ICICI Customer Service Team.
Hello, I am receiving same kind of letter from ICICI bank similar to vivek (Non-submission of export document). Our transaction is not something related to export of goods but for doing online freelance services. What we should do for this. Any guidance / help would be appreciated.
The bank would want to know the purpose of the inward remittance. Speak to the bank and find out what details they require in the letter. Save this template and provide them with these details every time you receive inward funds.