In an ever-changing world of global trade, regulatory compliance has become not just a requirement but also a strategic business opportunity. Exporters and importers in India are facing growing complexity with documentation, and are mainly concerned about two documents: the Electronic Bank Realization Certificate (eBRC) and Export General Manifest (EGM). These documents provide compliance that, at the same time, not just validate trade transactions, but unlock significant export benefits, GST refunds, and provide an enhanced compliance profile.

The challenge of manually managing these documents represents a significant barrier for businesses trying to grow their business internationally. At Covoro, we've witnessed automated compliance management significantly improve operational efficiencies and release working capital that's been locked up in lengthy manual processes.

Understanding the Electronic Bank Realisation Certificate (eBRC)

The eBRC marks a significant shift in how export payment verification will be managed in India. A digital certificate issued by authorized dealer banks through the DGFT Portal will serve as conclusive evidence of the realization of foreign currency proceeds on an export sales transaction.

The essential functionality of eBRC:

• Digital Authentication: Banks issue eBRCs as part of an integrated system with the DGFT, thereby eliminating the need for a paper-based process.

• Payment Validation: Verify that the foreign currency was received against specific export invoices or shipping bills.

• Regulatory Connection: Seamlessly connect banking payment data with customs export regulatory documentation to ensure compliance.

• Enabler of Incentives: The eBRC serves as the necessary initial document to avail various export promotional scheme benefits like RoDTEP, MEIS, and EPCG.

The recent improvement of the eBRC system enables exporters to self-certify their certificates against Inward Remittance Messages (IRMs), which are sent directly by banks to DGFT, reducing processing time and administrative burden.

The Export General Manifest: Ensuring Physical Export Verification

The Export General Manifest functions as the customs authority's method for verifying the physical export of goods outside of Indian territory. It is submitted by carriers through the ICEGATE portal and informs customs of all consignment details loaded onto vessels or airplanes.

Primary Functions of EGM

• Departure Verification: Confirms that the goods have departed the Indian airport or port.
• Customs Compliance: Allows authorities to accomplish confirmation by validating shipping bills against where the cargo is actually moving from.
• Anti-fraud Readiness: Stops export benefits from being misused by giving assurances that they are actually being exported.
• Refund Processing: An integral component in processing GST refunds and claims regarding export incentives.

The EGM must be filed before the carrier's departure, with timelines varying by mode of transport. It assures customs that real-time visibility of the movement of export cargo is maintained.

The Strategic Business Impact of eBRC and EGM

Regulatory Basis

Together, both documents are the basis of India’s export monitoring regime. Any missing or inaccurate filing of one of these documents may raise regulatory scrutiny, penalties, suspension of export privileges, and rejection from government incentive programs.

Maximizing Financial Recovery

Export companies allocate considerable funds for GST payments, customs duty deposits, and other compliance costs. The Export Bill Realization Certificate (eBRC) and the Export General Manifest (EGM) together unlock important financial recovery opportunities:

• GST reimbursements: Exporters are unable to redeem input tax credit (ITC) refunds without a valid eBRC and EGM, as these documents are obligatory to ensure GST refunds. 
• Export incentives: Most schemes, such as the Rebate of Duties and Taxes on Export Products (RoDTEP), the Service Exports from India Scheme (SEIS), the Merchandise Exports from India Scheme (MEIS), and others, require both documents to access the benefit. Authorities review the eBRC to verify receipt of payment of exporter invoices and refer to physically exported evidence through EGM if necessary. 
• Duty drawback claims: Importantly, all duty drawback claims require a proper eBRC-EGM linkage to avoid fraudulent claims.

Operational Credibility

These documents establish trade authenticity, financial transparency, and build a strong compliance history that regulatory bodies use to assess business credibility for future transactions.

The Hidden Costs of Manual eBRC and EGM Management

Issues with Data Integrity

When processing is done manually, there are multiple failure points. For example, invoice numbers, amounts, and notes are often incorrectly copied. There are also errors when different banks and shipping lines apply different formats for their data, and version control issues arise when outdated versions of documents are in circulation.

Bottlenecks in the Process

Legacy handling of these transactions creates significant delays due to long processing times in the bank, dependencies on shipping line schedules, and very slow reconciliation that matches up the eBRCs with the EGMs. In extreme cases, these delays will extend the realisation of GST refunds to 4-6 months instead of the earlier timeframes.

Risks in Compliance

Manual processes pose businesses certain risks, such as missing deadlines, mismatched documents, which could raise regulatory questions, and issues with audits stemming from poor record-keeping. Studies paint a damning picture - manual processes reach an 85-90% accuracy level, while automated systems pass an accuracy level of 99.8%.

Transforming Compliance Through Intelligent Automation

Covoro's Integrated Approach

Our AI-powered platform addresses every aspect of eBRC and EGM management through comprehensive automation:

Automated Data Synchronization

• Real-time integration with DGFT, ICEGATE, and banking portals.

• Intelligent data matching across multiple systems with 15x faster processing speeds.

• Automated error detection and correction protocols that eliminate manual intervention.

Management of Compliance in a Proactive Manner

• Continuous monitoring of document status and deadlines.

• Predictive analytics for identifying potential compliance issues before they impact operations.

• Automated alerts for missing or mismatched documentation, ensuring nothing falls through the gaps.

Streamlined Reconciliation

• Intelligent matching of shipping bills, invoices, eBRCs, and EGMs.

• Advanced algorithms for handling complex multi-currency transactions.

• Comprehensive audit trails for regulatory reporting with instant report generation.

The Future of Export Compliance is Automated

The trade market requires accuracy, speed, and extreme compliance. Utilising manual processes with eBRCs and EGMs places labour on wasted or misallocated resources, skills, adds risk, causes delays, and costs. When working capital optimisation is a competitive advantage or at risk of vulnerability, compliance must be automated.  

Today's EXIM automation solutions provide centralised dashboards, integrated into ERP systems, that manage foreign trade finance while removing challenges associated with the coordination of manual systems, and built-in workflow automation features and capabilities. The platforms have capabilities to manage licenses, track expenses, claim incentives, and handle records. 

Covoro's EXIM automation platform gives businesses the ability to receive cash flow sooner from the GST refund and incentives, removes the risk of manual errors through ongoing compliance monitoring features, allows for continued growth without additional resources required for payroll, and much more informed decision-making based on compliance management and recovery potential, in real-time, as opposed to all other accounting software.