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TOPIC : Payment through Western Union for Export Trade
Posted on 11 July 2014 at 11:11:00

Can we use Western Union payment mode for our receiving the payment from abroad in export business. This mode is legal in India? how can we present our documents to bank after shipment if we use Western Union mode for payment from abroad.

Mr Rajiv Rattan

KUBER INTERNATIONAL

Proprietor, KUBER INTERNATIONAL
Ludhiana, India

Free Member, Joined :01/13/2003
No of Topics Posted : 1
Reply/Comments : 0

Re: Payment through Western Union for Export Trade
Posted on 19 July 2014 at 10:19:00 [Message #3055 ]

The Indian Law doesn't have any specific restrictions on mode of receipt of remuneration for sale as long as it's in currency in circulation and not in exchanged for some security or commodity.

As comes to the bank, no documents are usually required while depositing cash except for the deposit slip. The cash collected from western union can be deposited as any normal deposit.The only place where some sort of explaining needs to be done regarding the receipt is during the closure of your annual books and during your statutory audit.

If the money would have come through the bank, the bank would have provided something called an FIRC (Foreign Inward Remittance Certificate) which states the reason for such inward remittance.

This is how the RBI keeps track of the currency currently in circulation therefore controlling supply demand and hence the value of the currency. Western Union, being a financial institution is naturally registered with the RBI and since it brings in and sends out currency, it's operation directly affects the circulation of the Indian Rupee, requiring it to issue such an FIRC with reason of remittance.

This FIRC is the only proof that the statutory auditor will demand with regard to the money you receive from western union.

Ms. Aparajita

(Tradeindia Expert)

Vakil Search

Vakil Search
Chennai, India

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