As digital adoption accelerates ecommerce growth has been exponential. Consumers can purchase goods and services without stepping out, while sellers can operate digital stores to reach audiences across the globe. While transactions are taking place digitally and remotely – Indian sellers need to obtain a Foreign Inward Remittance Advice (FIRA). But why should this manual process exist when everything is moving online?
Lets first understand what is FIRA and its importance.
Having a FIRA is crucial for any Indian seller that receives international payments for customers. No GST is imposed when a seller exports his goods or services. In such cases, the document acts as a testimonial for all inward remittances and payments, received from abroad. It includes details such as name, method of payment, total amount in foreign currency and the total amount when converted into INR, rate of exchange, purpose of receipt of remittance, etc.
Most statutory authorities accept a FIRA as proof that an individual or a business has received an international payment in a foreign currency. For such an important document, the process of obtaining it was manual and time consuming and also incurred a cost.
We, at PayPal, are focused on enabling small exporters and freelancers helping them leverage the global opportunity. We have worked to make this process faster, simpler and free. With PayPal’s monthly Digital FIRA, sellers can avoid visiting a bank. The new solution notifies sellers via an email every 15th of the month and enables them to download the FIRA from their PayPal business account.
How will the Digital FIRA benefit small businesses?
MSMEs have small teams that usually double hat. Manual processes are only inconveniences that these businesses need to manage. Now, with the simplified process to obtain a FIRA, small businesses and individuals have more time to focus on growing their business or freelancing career.
Vanguard Technologies, a company that provides enterprise solutions has benefited largely from the digital process. In the past, with other solutions, the company had to follow up with multiple entities and reconcile each incoming transaction. The company’s Founder, Viranchi Shah said “The digital FIRA by PayPal has simplified the compliance process substantially for us. It enables us to download the FIRC document each month for all the transactions in the previous month without any hassle, reconciliation or follow up required.”
Similarly, Edufeat, an online educational service provider that turns around over US $1 million in revenue has benefited largely from PayPal’s digital FIRC. There were times when the company had to wait a month before getting the final FIRA and additionally spend Rs. 2,000 for each document. Haardik Gar, the founder of the company said, “I believe it has been a long-awaited update for any merchant. The process has become swift and hassle-free and has enabled us to save largely because its cost-free.”
In addition to saving time, MSMEs can also apply for bill closure and get tax benefits faster. With this revised process, we aim to empower small businesses to conduct business with international customers seamlessly.