You invoiced a client abroad for $1,000. The money lands, you open your bank statement, and the rupee credit is lower than the number you worked out in your head. There is no line that says why. Most freelancers either shrug and absorb it or message the client asking whether they sent the full amount.
To read your bank statement for a foreign payment, treat the credit as a result, not an input. The rupees you see are what is left after any deductions by banks on the way, the fees your own bank charges (with GST on them) and the conversion from foreign currency to rupees. This post walks through each step, shows the arithmetic on a made-up example, and gives you a way to match the credit to the invoice so the gap stops being a mystery.
Why the rupees credited never match the invoice
The credit you see is what is left after fees, deductions and conversion. Your client sends a foreign amount, banks in between may take a cut, your bank converts it to rupees at its own rate and may charge a fee on top. The difference between the invoice and the credit is therefore the cost of moving the money, not a mistake on anyone's side. The guide to the exchange rate on a GST export invoice calls the bank credit the third rupee figure, after the GST value and the income tax value. This post is about that third figure.
What the credit line on your statement tells you
The credit line is short on detail. It typically shows the sender's name, a reference and the foreign currency amount, with the rupee figure that landed. The layout and wording differ from bank to bank, so do not expect two banks to describe the same payment the same way. Use the line to confirm who paid and when, and use the FIRA (covered below) for everything else. If the narration is too thin to identify the client, ask your bank for the remittance details.
Deductions by banks along the way
Correspondent or intermediary banks can deduct fees from an international payment before it reaches you. These fees are separate from your bank's own charges, so they do not appear in your bank's charge list. The sender can ask for the "OUR" charge instruction, which tells the sending bank to bear the fees so the full amount arrives. If you want the invoice amount to land intact, ask your client to choose OUR when sending the transfer, and say so on the invoice or in your payment instructions.
Take a $1,000 invoice. If an intermediary takes $20 on the way, you receive $980. At an illustrative rate of ₹84.00 that deduction alone is worth ₹1,680, which is why the client's statement and yours can both look correct and still disagree.
Bank fees and the GST on them
Banks charge GST at 18 percent on their own commissions, fees and charges. HDFC's remittance fees page says so, and it also says its charges exclude fees taken by originating or correspondent banks. Your own bank's fee may be debited as a separate line or taken out of the credit. Whether GST also applies to the conversion spread is not settled by the fee page, so look at the GST line on your bank's advice and ask your bank or CA how your payment was treated.
On the made-up example, an illustrative ₹500 fee carries ₹90 of GST (18 percent of ₹500), so ₹590 comes off. That figure is arithmetic on a published GST rate, not a quote of any bank's price.
How to work out the rate your bank used
Divide the rupees by the foreign amount. If your FIRA or advice shows the rupee amount before fees and the foreign amount received, that division gives the rate applied. If the fee was netted out of the credit, add it back first, otherwise the figure you get is an effective rate that blends the rate and the fee. In the example, ₹81,730 divided by $1,000 is ₹81.73, which is lower than the ₹84.00 on the invoice because it includes every cost above. Banks do not publish one uniform benchmark for inward remittances, so ask your bank which rate it applied and when it was set. The guide to currency risk for freelancers covers how much the rate moves between invoice and payment.
What your FIRA should show, and what to check on it
For export receipts, banks issue an e-FIRA, and it typically carries the transaction reference, the date, the foreign amount, the rupee amount and rate, the remitter, a purpose code and any export reference. The exact fields and layout differ by bank, and purpose codes can differ between payments and banks, so do not assume your code matches anyone else's. Check that the remitter is your actual client, that the foreign amount matches what the client says they sent and that the invoice reference is quoted if your bank captured one. If a field is wrong, ask the bank to correct it before you need the document. The difference between the FIRA and the FIRC is explained in the guide to FIRC versus FIRA.
Reconcile the credit to the invoice in four columns
Reconcile each payment in four columns: invoice amount, the amount the client sent, the rupees credited and the gap between them. The gap at each step is a cost you can name. Put the invoice amount in the first column, the foreign amount received in the second, the rupees credited in the third, and the gap in the fourth. Keep the invoice, the FIRA and the statement entry together so you can show any one of them against the others.
When to ask the bank for a breakdown
Ask when the gap is larger than you can explain or the credit looks wrong against the FIRA. Send your bank the reference, the date and the amount, and ask for the rate applied, the fees charged with their GST and any deduction made by another bank. Questions about GST on currency conversion and the rate used belong with the bank and your CA, not with the client. For the document trail around the credit, the guide to GST invoices for freelancers covers what the invoice itself needs, and how long you have to bring the money in is a separate rule, covered in the EEFC account guide.
Keep invoice and payment records side by side
Keep the invoice, the FIRA and the statement entry in one place per payment. In Rinto you set the currency on each invoice and mark it paid yourself, so you can see which invoices are still unpaid. The bank credit and the FIRA stay with you, since Rinto does not detect payments or read bank statements. For the account side of things, the guide to a business bank account for freelancers is a good start. This post is general information, not financial or tax advice, and your bank and CA can confirm how your own payments are treated.
Frequently Asked Questions
Why did I receive less than my invoice from a foreign client?
The credit is what is left after deductions, fees and conversion. Correspondent or intermediary banks can deduct fees from an international payment before it reaches your bank. Your own bank may charge a fee, and banks charge GST at 18 percent on their own fees. The conversion to rupees also happens at your bank's rate, not the rate you used on the invoice. Compare the invoice amount, the foreign amount on your FIRA and the rupees credited, and the gap between each step shows where the money went. If the client wants you to receive the full amount, they can ask their bank for the OUR charge instruction on the next transfer.
Is there GST on bank charges for an inward remittance?
Banks charge GST at 18 percent on their own commissions, fees and charges, and HDFC's fee page states this for its remittance services. Fees taken by an originating or correspondent bank are separate and are not part of your bank's charge list. Whether GST also applies to the conversion spread on an inward credit, or only to explicit fees, depends on how your bank treats it. Check the GST line on your bank's advice, and ask your bank or your CA how it treats the conversion on your payment.
How do I find the exchange rate my bank used?
Look at your FIRA, which typically shows the foreign amount, the rupee amount and the rate. If the rate is missing, divide the rupees by the foreign amount. If fees were netted out of the credit, add them back first, or you will get an effective rate that blends the rate with the fees. For example, ₹81,730 divided by $1,000 gives ₹81.73, but that includes a deduction and a fee. Banks do not use one uniform benchmark, so ask yours which rate applied to your payment and when it was set. A written reply gives you something to keep with the invoice.
What details should be on a FIRA?
For export receipts, banks issue an e-FIRA. It typically carries the transaction reference, the date, the foreign amount, the rupee amount and rate, the remitter's details, a purpose code and any export reference. Layouts differ by bank, so your document may order or name fields differently. Check that the remitter is your actual client, that the foreign amount is what they sent and that the invoice reference is there if your bank captured it. If something is wrong, ask your bank to correct it. The guide to FIRC versus FIRA explains when each document is needed.
How do I match a foreign payment to my invoice in my books?
Use three figures per payment: the invoice amount, the amount the client sent, and the rupees credited. The difference between the invoice and the amount received is deductions along the way. The difference between that and the rupees credited is your bank's fee, its GST and the conversion. Record all of them against the invoice with the FIRA and the statement entry attached. A spreadsheet row with four columns is enough: invoiced, received, credited and gap. Ask your CA how to book the gap in your accounts, since treatment depends on your setup.