RCMC Membership Types Explained: Choose the Right One for Export Business

To get access to booming international markets, the primary requirement for export businesses is to obtain RCMC. The Registration-cum-Membership Certificate (RCMC) serves as a vital document for exporters. It certifies the registration with the authorized export promotion council or other recognized body. Meanwhile, various types of RCMCs depend on the export products or services. Let’s explore the page to know the multiple types of RCMC and their functions. Read more in the next section.

1. RCMC Certificate for New Export Houses

The new export houses required the RCMC to avail government benefits under India’s Foreign Trade Policy. A registration-cum-membership certificate is not mandatory, but it is a vital tool for gaining international market recognition in border resources. However, before the RCMC registration, selecting the right EPC (Export Promotion Council) is crucial. Every EPC covers the specific product category. By selecting the right export councils that cover your main product line, an exporter can easily expand into markets. 

2. RCMC Facilitates the Export Activities to Comply with DGFT Regulations

Through the RCMC certificate for export, the exporters get the tag of legitimacy that streamlines the export procedures. It enables the export businesses to claim benefits under the Foreign Trade Policy (FTP). The certificate is also required for importing/exporting the restricted goods. Furthermore, it ensures compliance with DGFT’s set trade regulations. The presence of RCMC demonstrates that the exporter has met all set government standards and trade regulations. The registered exporters gain valuable updates on market research and export data.

3. The Different Types of RCMC Membership

RCMC membership can be determined based on exporter types or exporters’ status. In general, the membership aligns with the business activities, export turnover, and establishment level. This can be interpreted as :

3.1 Manufacturer Exporter Membership

The manufacturer exporters are those who export the goods that are produced by themselves. They have the direct power to manage the product’s internal and external quality, as well as cost and production schedule. They manage the whole process from production to export. 

For example, a company or individuals manufacture the purchasing goods in their own facilities. Then, they export them directly. 

A. What is the eligibility for Manufacturer Exporter Membership?

To get the RCMC certificate for export, the manufacturer or exporter needs:

• Export status: The applicant must be active as a manufacturer or exporter. Have a proper goods manufacturing factory registered with the relevant authority. 
• Business Activity: A manufacturer-exporter business must engage in export-import activities.
• IEC & Membership: An active IEC (Import-Export Code) is mandatory to deal as an exporter. To obtain the RCMC, the manufacturer must register their main business line with the relevant EPC (Export Promotion Council) or Commodity Board. 
• Compliance: The manufacturer must adhere to India’s Foreign Trade Policy.

B. What License Is Required for Export Manufacturers?

The major license or registration required:

• IEC registration on the DGFT portal
• For tax, GST registration certificate
• Registration with the EPC processed with DGFT
• Export license for restricted goods
• If exporting goods items, an FSSAI license is required
• To export a drug, a drug license is a prerequisite

3.2 Merchant Exporter Membership 

Merchant exporters do not manufacture the goods. In place, they purchase the goods from other domestic manufacturers and export to international markets. Essentially, these types of exporters are involved in trading activities. However, they depend on the domestic manufacturers for the cost. In detail, they serve as the intermediary between the manufacturer and buyers. 

A) Who qualifies as a Merchant Exporter?

To become a merchant exporter, the general qualifications required are:

• Based on their requirements and the capacity of their members, the merchant exporter needs to register a business entity. 
• To build the export business, a PAN card is mandatory. Registering the company with the income department is essential. 
• For your commercial activities, open a business bank account.
• Apply for the Import-Export Code (IEC) with the Directorate General of Foreign Trade (DGFT). 
• Due to the involvement in the taxable supply chain, the GST registration is mandatory. 
• Get the membership with the relevant EPC to obtain the Registration-cum-Membership Certificate. 

B) Eligibility Requirements for Concessionary GST Rates

There is a specific eligibility requirement set by the department for merchant exporters. By fulfilling these requirements, they can gain access to a concessional 0.1% GST rate on goods for export. The requirement starts with the export timeline. The merchant exporter needs to export the goods within 90 days of the supplier invoice being created. Only a GST-registered vendor can supply the goods. The tax invoice number and GSTIN of the registered supplier must be visible on the shipping bill or the bill of export. 

3.3 Service Exporter Membership 

The individual or company that provides the export services to international clients. These services include IT assistance, tutors, travel, etc. The service exporters can access the various government schemes and become a part of the implementation of the SEIS program. Such types of exporters must register with SEPC (Service Export Promotion Council) to get valuable global business opportunities. 

A) Registration under the Services Export Promotion Council

To get the service export membership for RCMC, SEPC is the primary organization. To be eligible for RCMC registration with SEPC, one must meet all the requirements. The basic requirements are –

• The exporters must be associated with service export activities.
• Have the active IEC (Import-Export Code). 
• Register on the DGFT portal.
• Prepare the specific documents such as DSC, IEC code, AOA & MOA, self-declaration, and GST certificate copy.

B) What is the Export Turnover Requirement?

For the Registration-cum-Membership certificate, the service exporters are required to meet specific export turnover requirements. These requirements are categorized as

• For new exporters: A new service export business can register with SEPC for membership, but it can only utilize the benefits after achieving the minimum turnover.
• For Proprietorships/Partnerships: These businesses must manage the Rs 830,000 in export service in the last financial year. 
• For Corporate/Institutional Members: To be eligible for SEPC registration for RCMC, one must have at least Rs 12,45,000 in export service in the last financial year.

3.4 Deemed Exporter Membership 

The deemed exporters supply the goods within the country to someone else. But they are still treated as an export for a specific policy purpose. It allows such exporters to gain the government benefits and incentives, including foreign currency payments. 

For example, deemed exporters can supply the goods to an EOU. The Indian rupee can be converted into foreign currency.

A) Qualification for Deemed Export

To be a deemed export, the individual or company must only supply the goods within India. Such export businesses are restricted to exporting goods out of India. 

B) What are the Benefits of Deemed Export?

Through the deemed export status, the export business can claim various government-supported benefits. The key benefits include

• GST Refund: On the deemed export supplies, a standard GST is paid. However, the tax is refundable, which can be claimed by either the recipient or the supplier.
• Access to License: Such export houses can obtain the Advance Authorization license. It is eligible for exporters to import raw materials duty-free.
• Duty Drawback: Under the Deemed Export Drawback Scheme, the exporters can claim for duty refund paid on inputs. 

4. RCMC Membership by Exporter Status

• Ordinary Membership: Under this membership, the new exporting or importing businesses fall. It is a basic-level member. For this membership, the export business is required to apply to the export authority. 
• Associate Membership: This membership is basically utilized by the established exporters. Well, they contain significant history in the trade activities. Unlike the ordinary membership, associated membership is for those who have been active for a specific period. 
• Trading House (TH) Membership: This membership is for those who have the premium performance in the trade market. The RCMC is for those who have an annual export or import turnover of nearly INR 100 crore. To get the “Trading House (TH) Membership,” the export business needs to register with the relevant EPC or have an active IEC.
• Star Export House (SEH) Membership: Those companies that paid a substantial contribution to India’s total export get the ‘Star Export House’ tag from DGFT. 

5. Final Thoughts | Types of RCMC Membership for Export House

RCMC is a government-issued legal certificate that allows eligible exporters to claim the export benefits and schemes. In India, the Registration-cum-Membership Certificate (RCMC) is issued by the specific authorized EPCs. Commodity Boards or FIEO for multi-products. By selecting the right EPC based on the exporter’s main business line, the goods or service businesses can get a competitive edge in markets. For fast and error-free RCMC registration, get the LegalRaasta professionals’ assistance.