Insights · Expert opinion
Foreign trade compliance, explained clearly
Practical guides to RBI reporting, FEMA timelines and cross-border tax for Indian businesses that import, export and trade between other countries. Written by the team that builds FxLayer.
Exports · 7 minWhat is EDPMS, and when does a Shipping Bill close?Every Shipping Bill you file opens an entry that stays visible to your bank and to RBI until the export proceeds are realised and reported. Here is how that system works and what keeps an exporter in good standing.Read the articleImports · 6 minWhat is IDPMS, and how does a Bill of Entry close?Every rupee sent abroad for imported goods has to be matched with proof that the goods arrived. IDPMS is where your AD bank does that matching, and where open items surface when the papers do not line up.Read the articleMerchanting trade · 7 minMerchanting trade: buying abroad, selling abroad, reporting in IndiaIn a merchanting trade the goods never touch Indian soil, but both payments pass through your Indian bank account. That makes the transaction simple to ship and demanding to document.Read the articleCross-border tax · 8 minForm 145 and Form 146: which part applies to your foreign paymentBefore your bank sends money abroad for anything other than the purchase of goods, it will usually ask for an acknowledgement from the income-tax portal. That acknowledgement is Form 145, and for larger taxable payments it rests on a chartered accountant's certificate in Form 146.Read the articleBanking · 5 minForm A1 or Form A2: which application does your bank need?Every outward payment starts with an application to your AD bank. Picking the wrong one is one of the most common reasons a payment request comes back.Read the articleBanking · 5 minRBI purpose codes: the five characters that classify every paymentThe purpose code tells your bank, RBI and the tax department what a payment is for. It decides the forms you file, how the payment is reported and which open items it can settle.Read the articleExports · 6 minExport realisation: the clock, the extension and the write-offThe day the goods leave, a clock starts on the export proceeds. Knowing where every Shipping Bill stands on that clock is the difference between a routine extension and a caution-list letter.Read the articleImports · 5 minPaying a supplier in advance: what your bank will expectPaying in advance is often the price of getting the goods. For your bank, it is a payment that has left India with nothing to show for it yet, which is why it stays open until the Bill of Entry arrives.Read the articleExports · 4 mineBRC and FIRC: what they prove and who issues themExporters are asked for proof of realisation for GST refunds, export incentives and audits. Two documents answer that question, and they are not interchangeable.Read the articleCross-border tax · 6 minPaying a foreign vendor at the treaty rate: the papers that matterThe treaty rate is often a fraction of the rate under the Act, and sometimes nil. Whether you can apply it depends less on the treaty than on what the payee has given you.Read the articleBanking · 4 minYour AD bank: the gatekeeper for every foreign trade paymentRBI does not see your invoices. Your AD bank does, and it is the bank that reports, matches and closes each transaction on RBI's systems.Read the articleFX · 4 minThe hidden cost in every foreign payment: the bank's spreadBank charges appear on the advice. The bigger cost, the gap between the market rate and the rate you were given, usually does not.Read the article
Questions people ask
Short answers to common questions
EDPMS follows exports: it holds every Shipping Bill until the export proceeds are realised. IDPMS follows imports: it holds every import payment and Bill of Entry until the two are matched. Both are run by RBI and updated by your AD bank. Read more
No. Imports of goods are on the specified list, so a payment for goods goes to the bank with a request letter and Form A1, without Form 145 or Form 146. Read more
Generally nine months from the date of export. Ask your AD bank for an extension before the period ends if the buyer will pay later. Read more
Buying goods from one country and selling them to another without the goods entering India, with both payments routed through the same Indian AD bank. Read more
Software subscriptions are commonly paid under S0802, software consultancy and implementation. They need Form A2 and a tax analysis for Form 145. Read more
When the payee is resident in the treaty country and you hold its tax residency certificate and the prescribed declaration; a no-PE declaration supports nil tax on business income. Read more
A FIRC confirms money was received. An eBRC confirms it was realised against a specific export, and is the document used for incentives and refunds. Read more
Usually because the bank has not been given the Bill of Entry for an advance, the AD code or IEC differs, or the amounts do not match. Ask the bank for its outstanding list and reconcile it. Read more
From reading about it to having it done
FxLayer applies these rules to every transaction you record, and prepares the letters and forms your bank asks for.