Paypal earlier reported that merchants would need Export code to resume withdrawal (Paypal India Outage – No Payments to or from India), but the latest blog mentions the need to fill ‘Purpose Code’ for the withdrawal.
When you select the ‘Withdraw Funds’ option on your PayPal account after March 3rd, we will ask you to fill out a new field entitled ‘Purpose Code’. This information is required under the laws of India in order to identify the nature of cross-border merchant transactions. – blog
What is a Purpose Code?
The purpose code helps your bank furnish information that may be required by the Reserve Bank of India to identify the nature of the cross border transaction. Details on the different purpose codes are in the table below. Please note that this is different from the Importer Exporter Code (IEC) issued by the Ministry of Commerce and Industry.
The purpose code helps your bank furnish information that may be required by the Reserve Bank of India to identify the nature of the cross border transaction.
| Code | Category | Description | Who should be using it |
| P0104 | Export of Goods | Value of export bills negotiated / purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.) | eBay merchants, jewelers, sellers of collectibles and other such products through eBay and your own websites / catalogues globally.
Please note: Cross border shipment of goods and services for which you file GR / PP / SOFTEX / EC forms only should be processed with this code. If you have any questions, please check with your bank to help you with the same. |
| P0301 | Travel , Hospitality and Tours | Purchases towards travel (Includes purchases of foreign TCs, currency notes etc over the counter, by hotels, hospitals, Emporiums, Educational institutions etc. as well as amount received by TT/SWIFT transfers or debit to Non-Resident account). | Online Travel Agents, Airlines, Railways, Buses, Taxicab Services, Hotels, B&Bs and other travel / tourism related sales through PayPal |
| P0801
P0802 P0803 |
Information Technology | Computer Information Services. Hardware / Software / Data Processing consultancy/implementation | If you are an independent / freelance coder / hardware consultant or data processing service provider, or a small business providing such services for websites globally, please use these codes.
For all IT related consulting services where you know you do not need to file a SOFTEX form, please use the appropriate code. 801 for hardware consulting, 802 for software consulting and 803 for data management and processing consulting services |
| P0805
P0806 |
Content and Journalism | News Agency and Subscription services | If you are a freelance journalist / blogger / news aggregator please use this purpose code for withdrawals.
If you are a newspaper or an online news aggregator for websites overseas, please use the appropriate code from these two. 805 if you a freelance journalist, and 806 if you are a newspaper / aggregator |
| P0902 | Licensing of creative works | Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films) | Artists, designers, other creative service providers where the principal revenue mode is license fees, please use this code.
If you produce creative works which you license out for entities overseas, licensing revenues may be classified under this purpose code |
| P1004 | Other services | Legal Services | If you are providing outsourced law related services |
| P1005 | Accounting, auditing, book keeping and tax consulting services | For accounting consulting and accounting services | |
| P1006 | Business and management consultancy and public relations services | Management / brand consulting and management services can be exported with this purpose code | |
| P1007 | Advertising, trade fair, market research and public opinion polling services | Marketing/ brand consulting / logo design / event management services can be exported with this purpose code | |
| P1008 | Research & Development services | If you are an outsourced research and development services provider based in India, receipts can be inwarded through this purpose code | |
| P1009 | Architectural, engineering and other technical services | Any other technical services such as eTutoring, education and other services you render over the internet via web conferencing tools or similar channels, please use this code for your withdrawals |
Is there a purpose code for packaged software export ? Am I missing something obvious ?
I think so many restrictions are really important to protect from unauthorized and illegal transactions. I just want know if one earns on affiliate transactions, even that needs a purpose code?
These restrictions are needed to protect illegal funds transfer in the country especially in the prevailing global environment of international terrorism and frauds.
However I also think such regulations bring a level of red tapism, which was earlier missing in this industry. So it’s just another major hurdle for a young entrepreneur, especially considering the functioning of our government officials, trying to lay his foot on the internet domain.
Navin Budhwani
Co-Founder
Bharatbuy.com
Its not like terrorists are going to use Purpose Code P8888 “Carrying out Devious Terrorist Activity” – so how is this going to help ?
+1 Security more security and higher security from India against international terrorism. ha ha funny people.
Purpose code will not help in this case, as any one can use the same code and do the transaction.
The Purpose Code sounds like a great fix…if it works. With a Premier account and receiving payments from individuals around the world via email I wonder if any kind of flags will come up. A lot of entrepreneurs must do “casual” business in the sense that invoices never get made…just an honor system to receive the funds after the job is done. But, in the long run, I think they’ll only be looking for suspicious acitivites. Why wouldn’t an Indian bank want money coming into it? Of course they want money… Let’s see how it goes.
I was able to withdraw during the month of March this year but the problem has started again. I initiated a withdrawal on 8th April but till date it has still not been credited to my account. Hope Paypal takes this business more seriously.
i do local sales and accept dollars through paypal from indian customers. is it legal? there is also no purpose code for withdrawal of money from paypal. what should i do?