- October 10, 2024
- Posted by: admin
- Categories: Export Financing, Blog
In today’s fast-growing global market, India’s export sector offers immense opportunities for businesses to expand. As of November 2023, India’s total exports, including both products and services, reached around US$ 62.58 billion, according to the Ministry of Commerce and Industry.
For businesses looking to export, the Registration-Cum-Membership Certificate (RCMC) plays a key role. This certificate is essential for exporters who want to be recognized within the regulated export community. It not only validates your business as a legitimate exporter but also opens doors to numerous opportunities in international trade.
What is RCMC?
RCMC stands for Registration Cum Membership Certificate, which is a vital document for exporters in India. It is issued by the Federation of Indian Export Organizations (FIEO) or one of the Export Promotion Councils (EPCs) or Commodity Boards that are authorized by the Government of India. These organizations work to promote and support export businesses and industries, ensuring that exporters get the necessary recognition and benefits.
The RCMC certificate is valid for five years and indicates that the exporter is registered with the relevant export promotion body. When an exporter holds an RCMC, they are entitled to the benefits and services provided by the specific EPC or Commodity Board they are registered with. There are several well-known EPCs in India, including APEDA (Agricultural and Processed Food Products Export Development Authority), SEPC (Services Export Promotion Council), GJEPC (Gem and Jewellery Export Promotion Council), Tea Board, EEPC (Engineering Export Promotion Council), and the Spices Board.
The RCMC acts as proof of membership with an Export Promotion Council (EPC), commodity board, or export development authority. It is crucial for businesses that wish to benefit from various export-related concessions and schemes, particularly when dealing with restricted goods under the Foreign Trade Policy (FTP).
To obtain an RCMC, exporters must declare their primary line of business, which helps ensure they are affiliated with the correct export body. The certificate comes with several advantages, including access to government export incentive schemes and support from EPCs for improving their trade activities.
Why is RCMC Required?
If you are an exporter in India, you need an RCMC certificate for several reasons:
1. Authorization to Export/Import Restricted Items: If you are exporting or importing items that fall under restricted categories, you must have an RCMC certificate to obtain the necessary authorization from government bodies.
2. Claiming Benefits Under Foreign Trade Policy: The Foreign Trade Policy offers various incentives and benefits to exporters. To avail of these, having an RCMC is essential.
3. Customs and Central Excise Benefits: Exporters registered with an EPC through the RCMC are entitled to certain advantages from customs and excise authorities, such as lower duties and tax rebates.
Moreover, if you are exporting multiple products that fall under different categories (and hence different EPCs), the RCMC will still be applicable across all your export activities.
Incentives for Exporters
Exporting can be complex and challenging, and to ease the difficulties faced by exporters, the Government of India provides several incentive schemes. These schemes are designed to help businesses with cash flow, profitability, and production issues. Organizations also offer competitive post-shipment financing solutions to exporters.
How to Apply for an RCMC?
Applying for an RCMC certificate is straightforward. Exporters must fill out the ANF 2C application form and submit it to the appropriate EPC based on their product category. For instance:
– Tea exporters apply to the Tea Board.
– Garment exporters apply to the Apparel Export Promotion Council (AEPC).
There are two main types of exporters: merchant exporters and manufacturer exporters. To apply as a manufacturing exporter, one must provide proof of having an established manufacturing facility.
Information Required in ANF-2C Form
The application process involves providing basic information about your business. The key details include:
– Name and address of your business, including branches and factory addresses.
– Import Export Code (IEC) details.
– Information about your industrial license, factory registration, and other manufacturing-related documents.
– Certificate numbers, such as Export House, Trading House, or Star Trading House certificates, if applicable.
– Your primary line of business and the products for which you are seeking registration.
To find the relevant EPC for your products, you can refer to Annexure 2T from the Directorate General of Foreign Trade (DGFT), which lists all the EPCs and their corresponding product categories. There are currently 37 export promotion councils in India.
In cases where a product doesn’t fall under a specific EPC, exporters can apply directly to FIEO, which can issue an RCMC under the multi-product group category. Additionally, exporters must register with the appropriate EPCs for the different lines of business they engage in.
For example, APEDA, one of the EPCs, offers an online RCMC application process as part of the Ease of Doing Business initiative. Exporters can register online, submit their documents, and receive their certificate digitally, which they can later download from the APEDA website.
Documents Required for RCMC
When applying for an RCMC, exporters must submit a duly filled and signed ANF 2C form along with the following self-certified documents:
– IEC Number (Import Export Code).
– PAN Card of the business or individual applying.
– Articles and Memorandum of Association (for corporations), Partnership Deed (for partnerships and LLPs), or Trust Deed (for trusts).
– For companies, a certificate from the Registrar of Companies if there has been a change in the registered office address.
– GST Registration Certificate.
– For service exporters, three years of export data certified by a Chartered Accountant, as well as proof of payment of membership fees to the Services Export Promotion Council (SEPC).
– If the signing authority’s name is not mentioned in the IEC or other documents, a Board Resolution or Power of Attorney must be provided.
Important Things to Keep in Mind
When holding an RCMC, exporters must be aware of certain obligations:
Reporting Changes
If there are changes in the name, address, ownership, or constitution of the company, the EPC or registering authority must be informed within a month of such changes.
Quarterly Export Returns
Exporters are required to submit quarterly returns to their registering authority detailing their export activities.
Deregistration for Violations
If the terms and conditions of the RCMC registration are violated, the registering authority has the right to deregister the exporter’s RCMC for a certain period. In such cases, the exporter is given a show-cause notice and a reasonable opportunity to explain and rectify the violation before deregistration is finalized.
Appeals
If the exporter disagrees with the registering authority’s decision, they can appeal to the DGFT. The DGFT’s decision is considered final in such cases.
Validity of the RCMC Certificate
The RCMC is valid for five years, starting from April 1st of the year it is issued and expiring on March 31st of the fifth year.
Tips for New Exporters and Importers
– EPC Requirements: Before applying for an RCMC, ensure that your EPC meets the required eligibility criteria as a registering authority.
– Online Application: If applying online, your system should meet the necessary technical requirements, including Windows 7 or above and Internet Explorer 11 or higher.
– Hard Copies: Even if you submit documents online, EPCs may require hard copies to be sent to their nearest branch.
Important Warnings
– Adhere to RCMC Terms: Exporters must familiarize themselves with the terms and conditions of the RCMC to avoid penalties such as deregistration.
– Regional Application Requirements: Exporters based in Odisha must apply for an RCMC from the local FIEO office instead of their respective EPC.
– Digital Signature Certificate: For any foreign trade transactions that require a Digital Signature Certificate (DSC), exporters should obtain one from the DGFT, as DSCs from other providers may not embed the IEC.
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Conclusion
An RCMC is essential for any exporter in India looking to grow and expand their business internationally. It not only provides exporters with access to the benefits offered under various government schemes but also offers a platform for networking, support, and assistance through EPCs and Commodity Boards. By ensuring you have the right documents and staying compliant with RCMC regulations, you can streamline your export operations and make the most of the opportunities available in the global market.
For businesses seeking RCMC registration, Credlix offers professional assistance, helping you complete the process online with ease. With extensive experience, Credlix provides end-to-end support to ensure a smooth registration process, allowing businesses to focus on their growth.
Also Read: Navigating Export Finance: Tips for First-Time Exporters