Friday, 6 December 2024

Knowledge Series: Purpose Codes for Foreign Inward Remittances.

 
ICICI Bank
 
Dear Customer,

RBI mandates the correct use of Purpose Codes for Inward Remittance settlements to ensure proper classification, tracking and reporting of international remittance transactions.

Each Purpose Code corresponds to a specific type of remittance such as Export, Services, Income or personal transfers. These codes help RBI to monitor the flow of funds into the country, ensure the compliance and regulatory aspects of transactions, thus preventing illicit financial activities. As per RBI guidelines, bank-wide reporting of Purpose Codes are submitted to the RBI fortnightly. For referring to the detailed guidelines, click here

The list of revised Purpose Codes for purchase, sale transactions as well as a list of Purpose Codes to be used for filling up the cover page of R-Returns (Regulatory Returns) is available under Annexure II in the above link.
 
Frequently used Purpose Codes for settling Inward Remittances:
 
Categories of Receipt Purpose Codes
Sl. NoDescription of Purpose CodesPurpose Codes for Inward Remittance
P00XX - Capital Account
1.Foreign Direct Investment made by overseas investors in India for equity sharesP0006
2.Short term loans with original maturity (up to one year) from Non-Residents to India (Short-term Trade Credit)P0013
3.Purchase from other Authorised Dealers (ADs) in IndiaP0092
P01XX - Exports (of Goods)
4.Value of export bills negotiated/ purchased/ discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.)P0101
5.Realisation of export bills (with respect to goods) sent on collection (full invoice value)P0102
6.Advance Remittance against exportsP0103
7.Receipt of payment or advance payment for intermediary/transit trade transactionsP0104
8.Merchanting Trade transactionsP0108
9.Export realisation on account of exports to Nepal and BhutanP0109
P02XX - Transport
10.Receipts of surplus freight/passenger fare by Indian shipping companies operating abroadP0201
11.Receipts on account of other transportation services (stevedoring, demurrage, port handling charges etc.)P0214
12.Receipts of freight fare - Shipping companies operating abroadP0216
13.Receipts on account of freights under other modes of transport (Internal Waterways, Roadways, Railways, Pipeline transports and others)P0222
P03XX - Travel
14.Purchases made towards travel (Foreign TC, currency, hotels, emporiums, institutions etc.)P0301
15.Travel for education including TCs purchased by educational institutionsP0305
16.Other travel receiptsP0306
P05XX - Construction Services
17.Receipts on account of services relating to the cost of construction of projects in IndiaP0501
18.Receipts on account of construction works carried out abroad by Indian CompaniesP0502
P06XX - Insurance and Pension Services
19.Life Insurance premium except Term InsuranceP0601
20.Freight Insurance - relating to import and export of goodsP0602
21.Other General Insurance premium including reinsurance premium and Term Life Insurance premiumP0603
22.Auxiliary services including commission on insuranceP0605
23.Insurance claim settlement of Non-Life Insurance and Life Insurance (only Term Insurance)P0607
P07XX - Financial Services
24.Financial intermediation except Investment Banking - Bank charges, collection charges, LC charges, etc.P0701
25.Investment Banking - brokerage, under writing commission etc.P0702
26.Auxiliary services - charges on operation and regulatory fees, custodial services, depository services etc.P0703
P08XX - Telecommunication, Computer & Information Services
27.Hardware consultancy/implementationP0801
28.Software consultancy/implementation (other than those covered in SOFTEX form)P0802
29.Data base, data processing chargesP0803
30.Repair and maintenance of computer and softwareP0804
31.Off-site Software Exports (Softex Forms involved)P0807
32.Telecommunication services including electronic mail services and voice mail services P0808
P09XX - Charges for the use of intellectual property (n.i.e.)
33.Franchises servicesP0901
34.Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films), patents, copyrights, trademarks, industrial processes, franchises etc.P0902
P10XX - Other Business Services
35.Legal servicesP1004
36.Accounting, auditing, bookkeeping servicesP1005
37.Business and Management consultancy and Public Relation servicesP1006
38.Advertising, Trade Fair servicesP1007
39.Engineering servicesP1014
40.Commission Agent servicesP1019
P11XX - Personal, Cultural & Recreational services
41.Audio-visual and related services like Motion pictures, video tape production, distribution and projection servicesP1101
42.Educational services (e.g. fees received for correspondence courses offered to Non-Residents by Indian institutions)P1107
43.Health Service (Receipts on account of services provided by Indian hospitals, doctors, nurses, paramedical and similar services etc. rendered remotely or on-site)P1108
P12XX - Govt. not included elsewhere (G.n.i.e.)
44.Maintenance of foreign embassies in IndiaP1201
45.Maintenance of international institutions such as offices of IMF missions, World Bank, UNICEF etc. in IndiaP1203
P13XX - Secondary Income
46.Inward Remittance from Indian Non-Residents towards family maintenance and savings P1301
47.Personal gifts and donationsP1302
48.Receipts/Refund of taxesP1306
49.Receipts on account of migrant transfers including personal effectsP1307
P14XX - Primary Income
50.Compensation of employeesP1401
51.Inward Remittance of dividends (on Equity and Investment fund shares) by Indian FDI Enterprises, other than branches operating abroad P1409
52.Inward Remittance on account of interest payment by Indian FDI enterprises operating abroad to their Parent company in IndiaP1410
53.Other income receiptsP1499
P15XX - Others
54.Refunds/Rebates on account of importsP1501
55.Reversal of wrong entries, refunds of amounts remitted for non-importsP1502
56.Deemed Exports (exports between SEZ, EPZs and Domestic Tariff Areas)P1505
P16XX - Maintenance and repair services (n.i.e.)
57.Refunds/Rebates on account of importsP1601
58.Receipts of maintenance and repair services rendered for aircrafts, Space shuttles, Rockets, military aircrafts etc.P1602
P17XX - Manufacturing services
59.Receipts on account of processing of goodsP1701
 
 
To know more, call on
1800-1080
 
Sincerely,
Team ICICI Bank
 
 
 
 
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