Introduction
Compliance is a critical part of receiving international payments into India. This FAQ blog addresses common questions you may have about using Xflow, explaining how payments are processed in line with RBI guidelines and how downstream requirements like GST refunds, eFIRC issuance, and EDPMS closure are handled by Xflow.
1. Is collecting payments through Xflow compliant with RBI norms?
Yes. Collecting international payments through Xflow is 100% compliant with all RBI guidelines. Here is why Xflow provides the most compliant way of collecting cross-border payments.
- Xflow is a registered MSB (Money Services Business) in the USA and Canada. This enables Xflow to work with a best-in-class bank like JP Morgan Chase (JPMC) and compliantly collect payments in foreign currency on your behalf.
- Xflow orchestrates cross-border money movement into India through an RBI approved correspondent banking channel, i.e. Bank to Bank Transfers. The funds move as follows
JPMC, USA (collection account) > JPMC, India > Bene’s Bank.
As you see, your payments in India are processed by JPMC, India, a fully licensed AD Category I bank that is authorised by RBI to process cross-border transactions. JPMC India will also provide a document/payment advice confirming the foreign inward remittance.
You can read a more detailed guide here.
2. How do I claim GST refunds/exemptions for payments received via Xflow?
A large portion of our users collect payments under purpose code P0802 and P0807 and file for GST refunds/exemptions. Below are the 2 ways of claiming your GST refunds
- (Most common) Most of our customers use the Payment Advice issued by JPMC India for claiming GST refunds. In the odd scenario that you do face an issue with the GST department, please do reach out to Xflow, and our support team will manage this process for you.
- (Alternative) Some of our customers, as per their internal policy, use the payment advice issued by JPMC India to get their own banks to issue a separate document. This document is known as eFIRC/BIRC/Credit Advice, etc. depending on the bene bank. While this process is usually seamless, in the odd scenario that you do face a challenge, please do reach out to Xflow, and our support team along with JPMC, India will manage this process for you.
The meta point is - you will be able to claim GST refunds for all payments received via Xflow, and the Xflow support team will resolve any issues in this process.
3. How can I get eFIRC for payments received via Xflow?
If you need eFIRC (which is also known as BIRC, Credit Advice, FIRA) from your bank, please follow these steps
- Xflow will provide you with an eFIRC request data packet (downloadable from your Xflow dashboard itself) 1 day after your payment is credited to your bank account. This will be specific to your bank.
- Email this data packet to your bank by keeping your Xflow support POC in CC, and we will co-ordinate with the bank to get you the eFIRC.
4. How do I manage the EDPMS compliance process for payments received via Xflow?
There are many Xflow users who collect payments for SOFTEX or for goods exports. These are the steps that must be taken for EDPMS closure.
- Xflow has created EDPMS closure data packets for all major banks. This data packet is ready in 1 business day after you receive your payment.
- Share the data packet with your bank requesting them to create an IRM (Inward Remittance Message).
- Your bank will create the IRM and ask for disposal instructions to knock-off the relevant SOFTEX entries or Shipping bills in the EDPMS portal. Once you provide this information, your EDPMS will be matched.
- You can ask your bank to provide you with eBRC/eFIRC or log-in to the DGFT portal to self-generate your eBRC.
Your dedicated Xflow support team will assist you through this process.
5. Will my bank refuse to issue the eFIRC or close EDPMS because I received payments through Xflow?
No. It’s your AD bank’s obligation to close EDPMS and/or issue you the document confirming receipt of foreign inward remittance in your bank account. The FEDAI has clearly outlined the responsibility of payment intermediaries and exporter’s bank in this circular (see FAQ 3)
https://fedai.org.in/pdf/Circular%20Letter%20No_16_2016_17_OCT_FAQs_EDPMS.pdf
These guidelines have been provided to enable exporters to choose between multiple compliant payment channels. In our experience, most banks comply with the FEDAI circular given that they are all part of FEDAI. Having said that, we have seen a small number of cases where there is 1-2 week delay in issuing documents or closing EDPMS, which can be attributed to your bank’s operational team’s know-how. This is easily resolved by your dedicated support team at Xflow and JPMC India. If you face any issues with your eFIRC or EDPMS closure, just reach out to Xflow, and we will ensure that you are 100% compliant.
Please note: Any bank refusing to complete the necessary downstream compliance obligation or penalizing/coercing users to mandatorily route funds through them is in violation of RBI and FEDAI guidelines.
Conclusion
Xflow is built to work within India’s regulatory framework, not around it. From RBI-approved banking rails to GST, eFIRC, and EDPMS support, every payment received via Xflow is backed by compliant processes and dedicated assistance. If you face any compliance-related issues, the Xflow support team will work with your bank to ensure timely resolution.
