Paypal Purpose Codes to transfer money to Indian Banks
Are you a Paypal User? Get to know the Paypal purpose codes to withdraw money from paypal account to a local bank in India. The purpose codes have been introduced by Paypal to comply with RBI (Reserve Bank of India) regulations for all settlements towards exports of goods and services.
It is important to note that PayPal can now be used only as a gateway for payments of goods and services into India and they cannot process payments for charitable donations.If you run a charity, and are based in India, then you may not find a paypal purpose code to withdraw funds into your Indian bank account.
Paypal purpose codes have been introduced to facilitate the Indian banks to furnish information that may be required by the Reserve Bank of India to identify the nature of the cross border transaction payment made in paypal.Going forward, Paypal users need to furnish such purpose codes when they initiate a withdrawal from their paypal account to their Indian bank accounts.
It is also important to note that that according to Indian laws, based on the amount of withdrawal and the purpose code declared in the paypal withdrawal instruction, the Indian bank may require the withdrawer of money to provide more documentary evidences such as invoices / goods receipt forms, as may be applicable, to reconcile with the amount of remittances deposited.
Paypal Purpose Codes
Find below the list of Paypal Purpose codes to use.There are sufficient purpose codes to cover all your business transactions done through Paypal. If you are unclear on what purpose code you should choose, you may contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.
|Paypal Purpose Code||Category||Description||Who should be using it|
|P0101 / 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. Use P101 if Deutsche Bank is your banker and P0104 if you bank with any other bank
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||Other services||Accounting, auditing, book keeping and tax consulting services||For accounting consulting and accounting services|
|P1006||Other services||Business and management consultancy and public relations services||Management / brand consulting and management services can be exported with this purpose code|
|P1007||Other services||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||Other services||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||Other services||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|
Thus, Indian PayPal users including Business, Premier and Personal Account Holders can no longer receive personal payments. There are only three ways by which such users can recieve payments from their customers.
· 1. Using the Pay for Purchases (Goods or Services) tab
· 2. Completing PayPal checkout at your website
· 3. Responding to PayPal “Request Money” instructions (invoices)
Whenever they instruct PayPal to withdraw their PayPal balance to their bank accounts in India, they will be required to provide a Paypal purpose code for the transaction.