P0104 Purpose Code (with Examples)

According to the RBI, it is for transactions related to “Receipts against export of goods not covered by the GR/PP/SOFTEX/EC copy of shipping bill, etc.”

P0104 is used when an Indian exporter receives money for exporting goods, but the transaction is not covered under standard export documents like the GR form, PP form, SOFTEX, or Exchange Control (EC) copy of the shipping bill. These are normally required by the RBI to track exports and ensure foreign exchange compliance. However, in some exceptional cases—like small-value shipments, personal gift items, or export through couriers—these documents may not be issued or required. In such situations, when the exporter still receives foreign payment for the goods, it is reported under P0104. This code captures export earnings that fall outside the usual documentation process, but still involve the movement of physical goods.

For Example, an Indian artisan sends a small consignment of handmade wooden toys worth USD 500 to a customer in the UK through a private courier service. Since the value is low and the shipment is made as a direct sale or gift without formal export documentation like a GR form or EC copy of the shipping bill, it doesn’t go through the standard RBI export reporting process. However, when the artisan receives the payment in foreign currency, the bank needs to report it to the RBI. In this case, the inward remittance is classified under P0104, as it is a receipt for export of goods not covered by the usual export documents.

Types of Entities Involved in Using Code P0104 for Transactions

The following entities are typically involved in transactions reported under P0104:

• Small-Scale Exporters and Artisans – Small-scale exporters, home-based businesses, or artisans who send low-value goods abroad can report their earnings even if they don’t have formal export documents like a shipping bill or SOFTEX form. This includes individuals or small businesses that sell handmade crafts, garments, or local products directly to customers overseas through courier, post, or online platforms. Since these exports are informal and usually of lower value, banks allow the money received from abroad to be reported under P0104, making it easier for small exporters to comply with regulations.

• E-commerce Sellers – This code is used when Indian sellers export goods in small quantities through global e-commerce platforms like Etsy, eBay, or Amazon. These exports are often made using courier or postal services, and may not be supported by the usual export documentation like GR forms, shipping bills, or SOFTEX forms. Since these are mostly small retail orders, sellers still need to report the foreign exchange received, and the purpose code P0104 is used by the bank to record such inward remittances correctly.

• Gift and Sample Senders – This code is used when a business or individual sends goods abroad as free samples or gifts without issuing a commercial invoice or a regular shipping bill. Even though the goods are not sold, the sender might still receive some reimbursement, promotional support, or related payments from a foreign party. Since the transaction does not involve a typical export sale, it is not covered under standard documents like the GR, PP, or SOFTEX forms.

• Courier and Logistics-Based Exporters – When a business or individual in India exports goods using courier services, postal mail, or fast logistics companies instead of regular shipping channels, the usual export documents like the GR form or EC copy of the shipping bill may not be issued. These are common in standard export methods, but not in courier-based exports. However, if the exporter still receives payment from the buyer abroad in foreign currency, the transaction must still be reported. In such cases, purpose code P0104 is used by the Indian bank to record the foreign exchange earnings. This code helps track export earnings even when the export is done through non-traditional, small-scale, or quick-delivery channels like courier or postal services.

• NGOs or Charitable Institutions – Under purpose code P0104, NGOs or charitable institutions in India that send goods like educational materials, medical supplies, or aid abroad, without using standard export documents like GR, PP, or SOFTEX forms, can report the foreign money they receive as donations or reimbursements under this code. These receipts are not linked to regular commercial exports but come from international donors, partner organisations, or aid agencies to support social or charitable work. This code helps track such non-trade foreign receipts properly and transparently.

• Exporters Under Exempted Schemes – When an exporter in India sends goods or services abroad, but is not required to submit standard export documents like the GR form, SOFTEX, PP form, or Exchange Control (EC) copy of the shipping bill. This usually happens when the export is made under special government schemes or when the value of goods is very low, and the RBI or customs authorities have waived the documentation requirements. Even though these exports are genuine, they fall under an exempt category, so the remittance received for them is reported using purpose code P0104.

• Freelance Craftspeople and Hobby-Based Sellers – Individuals who sell handmade items or crafts abroad as a small or side business, like through Etsy, Instagram, or WhatsApp, may not follow full export procedures like large exporters do. However, they still receive payments from foreign buyers through platforms like PayPal or bank transfers. Even though these are small-scale and informal, such foreign income is still considered legitimate, and the money received must be reported properly under the right purpose code while receiving it in India.

• Medical Suppliers and Health Clinics – Small clinics or medical suppliers may send diagnostic kits, sample medicines, or medical instruments abroad for collaboration or testing purposes, especially to doctors or institutions in developing countries. If they receive foreign payments or reimbursements without formal export clearance, the remittance is reported under P0104.

• Biotech Startups Sending Samples Abroad – Biotech firms or laboratories may export test kits, tissue samples, or reagents to global research partners without formal export clearance (e.g., in early-stage collaborations or beta testing). Any reimbursement or payment for such shipments can fall under P0104.

• Media or News Agencies – Independent media professionals or small news agencies that send reporting gear, books, or regional samples to foreign correspondents or news partners may not use standard export forms. Payments received for such material movement fall under P0104.

• Academic Institutions or Researchers – Professors or research departments at Indian universities who send physical research material, lab tools, or documentation kits overseas for academic collaboration and receive grant-related payments or cost reimbursements without export documents may use P0104.

• Media or News Agencies – Independent media professionals or small news agencies that send reporting gear, books, or regional samples to foreign correspondents or news partners may not use standard export forms. Payments received for such material movement fall under P0104.

• Print and Stationery Suppliers – Small businesses supplying custom-printed business cards, brochures, or stationery to overseas customers in bulk (via postal or courier mode) may often skip formal export documentation. Payments received for such exports are reported under P0104.

Types of Transactions Involved in Using Code P0104

Here are the common types of transactions that fall under P0104:

• Sale Proceeds from Low-Value Exports – When goods are exported via courier, post, or personal baggage with values too small to need GR/PP forms, the foreign currency received is still treated as export earnings. These transactions are reported under a specific RBI purpose code for such small-value exports to ensure compliance with FEMA, even without formal export documents.

• Reimbursements from Foreign Buyers – When an Indian business receives money from a foreign customer to cover the cost of goods initially sent as gifts, free samples, or promotional items, the remittance is treated as inward foreign exchange. Though not a sale, it may be seen as reimbursement or voluntary payment. Such transactions must be properly documented and reported to the bank under the correct purpose code as per FEMA and RBI rules.

• Online Payments for Informal E-commerce Sales – Payments received through platforms like PayPal, Stripe, or international bank transfers for small online orders, such as digital products, handmade crafts, or freelance services, often lack formal export documentation like shipping bills. These transactions typically use purpose code P0104, which is meant for exports of goods and services without shipping documentation. Despite being informal, this income must still be reported correctly through the bank using the appropriate purpose codes.

• Voluntary Payments for Gifts or Personal Exports – Money sent abroad as a voluntary payment for a gift or personal item, without a formal sale or invoice, is treated as a non-commercial remittance. It’s classified under personal purpose codes, not trade-related ones, and must be properly declared to the bank for compliance.

• Proceeds from Goods Sent Without Invoices – When small sellers or freelancers in India send items like crafts, books, or personal goods abroad without a commercial invoice or declared value, they may still receive payment from the buyer. Since these aren’t formal exports, banks may report the inward remittance under a relevant purpose code based on the transaction type. Clear documentation and explanation are important for the bank to accept and report the funds properly.

• Partial Payments or Token Amounts for Unbilled Exports – Foreign remittances received without formal export documents, like GR or SOFTEX forms, often relate to advance payments, tokens, or informal sales where no official shipping bill was filed. These are reported under codes like P0104 and must still be declared to the bank to comply with RBI and FEMA rules.

• Money Received for Re-exported or Returned Items – If an exporter in India re-exports goods that were previously returned by a foreign buyer, without issuing fresh shipping documents like a new GR or PP form, but still receives payment for those goods, the inward remittance is reported under purpose code P0104. This code is used when the payment relates to the export of goods that are not covered by the standard export documentation, such as in cases of re-export, replacement, or adjustment against earlier transactions. The transaction must still be supported by appropriate commercial records to justify the payment.

Rules for Transactions under P0104

Transactions under P0104 must follow several key rules and regulations to ensure compliance with Indian foreign exchange laws. Here are the main rules explained in simple terms:

• AD Bank Must Verify Reason for Using P0104 – AD banks have to make sure that the money received as a loan or payment is not related to exports covered under documents like GR, PP, SOFTEX, or EC copies. To confirm this, the bank may ask the person receiving the money to provide a simple declaration, invoice, airway bill, or any informal proof that shows the transaction isn’t linked to an export.

• AD Bank to Report Under P0104 – Transactions under P0104 are reported by the Authorised Dealer (AD) banks in India, such as commercial banks handling foreign exchange transactions. When an Indian exporter receives foreign currency for goods exported without standard export documents (like GR/PP/SOFTEX/EC copy), the exporter must declare the purpose of the remittance as P0104 while submitting details to the bank. Based on this declaration and supporting evidence (like invoices, courier slips, or buyer communication), the AD bank verifies the nature of the transaction and reports it to the Reserve Bank of India (RBI) through prescribed returns such as FETERS (Foreign Exchange Transactions Electronic Reporting System).

• No Standard Export Documentation Required – It is used when goods are exported from India, but the usual export documents like the GR, PP, SOFTEX, or EC copy of the shipping bill are not issued or are not applicable. This typically happens in cases like low-value shipments, exports through courier or post, gifts or samples sent abroad, or exports made without formal customs clearance. Since these transactions don’t go through the regular customs export process, they are reported under P0104 to indicate that the exports occurred without the standard documentation.

• Purpose Declaration by Exporter Is Mandatory – When an exporter receives payment from abroad that is not covered under standard export documentation like GR, PP, SOFTEX, or EC copy of shipping bill, they must declare the correct purpose code while submitting the Foreign Inward Remittance Certificate (FIRC) request or reporting the transaction to the bank. This helps the bank correctly classify the inward remittance as a receipt against exports not supported by formal export documents and ensures compliance with RBI reporting norms under FEMA.

• Applicable Only for Physical Goods – Purpose code P0104 is used specifically when physical goods are exported from India, but the transaction is not supported by standard export documentation such as GR (for exports by air or sea), PP (for exports by post), SOFTEX (for software exports), or the Exchange Control (EC) copy of the shipping bill. This code covers exceptional cases where goods are indeed shipped out of India, but due to various reasons—such as informal trade channels, direct dispatch to buyers, or lack of proper documentation, the export does not fall under the usual regulated documentation routes.

• Amounts Should Generally Be Small or Exception-Based – Large-value export transactions are generally expected to follow formal documentation procedures, including the use of GR, PP, SOFTEX, or EC copies of shipping bills as mandated by the RBI. However, purpose code P0104 is meant to be used only in exceptional cases where such documentation is either not applicable or officially exempted. This includes scenarios where the export is permitted without the usual shipping documents due to RBI guidelines or specific sectoral exemptions. Therefore, P0104 should not be used for regular export transactions and must be supported by clear justification or exemption approval.

• Goods Must Be Shipped Abroad – Even if supporting documents like invoices or agreements are missing, there must still be an actual physical export of goods to justify a transaction. The absence of proper documentation does not exempt the exporter from proving that a genuine export has taken place. Any attempt to show a fake or disguised transaction without a real shipment can attract scrutiny from tax authorities, customs, or the Reserve Bank of India, and may lead to penalties or legal action under foreign exchange and tax laws.

• Prescribed Time Limit – As per RBI guidelines, any foreign exchange receipt, including those under P0104, should be reported to the Authorised Dealer (AD) bank ideally within 30 days from the date of receipt. This allows the bank to verify the purpose of the transaction, collect supporting documents like invoices or courier receipts, and accurately report it to the RBI. Delays may lead to complications such as the transaction being questioned by the bank or tax authorities, or being treated as unexplained income.

How to Report the Purpose of The Transaction to The RBI by Giving the Purpose Code:

Those involved in such transactions must file several forms before starting the process. Usually, the transactions are via bank transfers, and your bank will ask you to provide a purpose code by giving you a form to fill out. If you have any doubts or questions, feel free to reach out to us via email- support@bankerpanda.com, and we will try our best to help you out.

Tax or No Tax?

Inward remittances reported under P0104 are treated as export income, even though the export is not backed by standard documents like GR/PP/SOFTEX/EC copy. As long as the goods are physically exported and there is a genuine underlying transaction, the income is generally taxable under “business income” in India. Here are the key tax laws and provisions that may apply to transactions reported under P0104 –

• Income Tax Act, 1961 (Business Income) – Under Section 28 of the Income Tax Act, earnings from the export of goods are treated as business income and are taxable in India. Even if standard export documents like the GR form or shipping bill are not available, the foreign exchange received by the exporter is still considered taxable income, as long as it relates to the export of goods. To support the legitimacy of the transaction, the exporter must maintain alternative evidence such as commercial invoices, courier receipts, emails or communication with the buyer, or any other proof that shows it was a genuine business transaction.

• No Special Exemption Without Documentation – Exemptions under tax sections like Section 10AA (for SEZ units) or the now-withdrawn Section 80HHC (for exporters) typically require documentary proof of exports, such as shipping bills or export declarations. However, in transactions reported under P0104, which often involve export receipts not linked to GR/PP/SOFTEX/EC copies, such documents are usually not available. As a result, these exemptions may not be available unless the taxpayer can provide alternative acceptable evidence to the tax authorities to prove that the income genuinely arises from export activities.

• Tax Audit Requirements (Section 44AB) – If the total turnover of an exporter, including informal or unreported exports covered under purpose code P0104, exceeds the prescribed threshold under the Income Tax Act, the exporter may be required to undergo a tax audit under Section 44AB. This section mandates that businesses with turnover above a specified limit (as of 2025, Rs. 1 crore for businesses, or Rs. 10 crore if all receipts and payments are digital) must get their accounts audited by a chartered accountant. Therefore, even if part of the export income is received outside formal shipping documentation, it still contributes to total turnover and may trigger the need for a tax audit.

• TDS and Foreign Tax Credit (FTC) – In rare cases where a foreign buyer deducts tax at source on interest or service payments before remitting funds to an Indian exporter or lender, the Indian recipient can claim Foreign Tax Credit (FTC) to avoid double taxation. To do this, the Indian party must file Form 67 with the Income Tax Department, along with proof of the tax deducted abroad. This credit is allowed only if there is a valid Double Taxation Avoidance Agreement (DTAA) between India and the buyer’s country, and the conditions under that agreement are fully met. India has DTAAs with 94 countries, including the US, UK, Canada, Japan, China, Germany, and Australia. Know more about the countries with which India has a DTAA here.

• Goods and Services Tax (GST) (Zero-Rated Supplies) – Under Section 16 of the IGST Act, export of goods is treated as a zero-rated supply, which means exporters are generally eligible to claim Input Tax Credit (ITC) and apply for GST refunds. However, in most cases under purpose code P0104, where the export is not backed by shipping bills or export declarations (such as GR, PP, SOFTEX, or EC copies), it becomes difficult to establish the transaction as a valid export in the eyes of tax authorities. As a result, the exporter may not be eligible to claim a GST refund, even if the goods have been supplied abroad.

• Carry Forward and Loss Adjustment under P0104 – Carry forward and loss adjustment are applicable under P0104, as the income or loss from such transactions is treated as part of the exporter’s regular business income under the Income Tax Act. If the exporter incurs a loss while fulfilling an order, for example, due to high production costs, goods being damaged, or payment being lower than expected, this loss can be adjusted against other business income or carried forward for up to 8 years to set off against future profits, as per Section 72. However, to claim this benefit, the exporter must file their income tax return on time and maintain proper supporting documents (like courier receipts, invoices, and buyer communication), even though standard export documents like GR or shipping bill are not present.

• Documentation and Record-Keeping – Even if standard export documents like shipping bills or GR forms are missing, tax laws require exporters to maintain alternative evidence to prove the nature of their income during assessments. This may include commercial invoices, courier or tracking numbers, email correspondence with buyers, and proof of payment receipts. These records help establish that the income is genuinely from export activities and support the exporter’s claims in case of scrutiny or audit by tax authorities.

P0104 Purpose Code Use Case Examples:

Here are some real-life examples where the RBI’s Purpose Code P0104 would be used to report transactions in India-

• Handicraft Export by a Home-Based Artisan:-
  A home-based artisan in Rajasthan sells handmade wooden toys to a buyer in Canada through an online platform like Etsy. The goods are sent through a courier service, and due to the low value of the shipment (under INR 25,000), no GR form or shipping bill is filed. When the buyer sends payment via PayPal, the inward remittance is reported under P0104, as it is a receipt for export of physical goods without standard export documentation.

• Courier-Based E-commerce Shipment:-
  An individual in Kerala sells herbal products through their website and sends small parcels to customers in Singapore and Malaysia using international courier services. Since the parcels are sent as direct sales without customs clearance or GR form, but foreign remittances are received, the bank classifies and reports these payments under P0104.

• Payment for a Gift Shipment:-
  A fashion designer in Delhi sends a few sample dresses as a promotional gift to a fashion boutique in the UK. Later, the boutique sends a payment as a token of appreciation. Even though this was not a formal sale and no export shipping bill was filed, the designer received foreign currency and declared the inward remittance under P0104, as it is linked to the movement of physical goods without standard export documents.

• Informal Sale by a Freelance Seller:-
  A freelance seller of handmade candles in Mumbai sends a few boxes of candles to a customer in the UAE through India Post. The buyer transfers payment after receiving the goods. Since the seller did not raise a commercial invoice or get shipping clearance, and no GR or EC copy was generated, the payment is reported under P0104 by the AD bank based on the seller’s declaration and proof of dispatch.

• Re-export of Returned Goods Without Fresh Documentation:-
  An electronics exporter in Bangalore receives a consignment of previously exported goods returned due to minor defects. The exporter repairs the items and re-exports them to the same buyer without creating a new shipping bill. Upon receiving payment, since the transaction lacks fresh export documentation, it is reported under P0104 by the bank.

• Art Sale by an Independent Artist:-
  An independent artist based in Goa sells a painting to a foreign buyer in Australia. The artwork is shipped via a private courier service, and no GR form is filed due to the small scale of the transaction. When the payment is received through an international bank transfer, it is reported under P0104, as it represents the sale of a physical good without standard export documentation.

• Export of Educational Kits by a Non-Profit:-
  An Indian NGO based in Pune sends free educational kits, including books and stationery, to a community school in Kenya as part of a charitable initiative. Later, the NGO receives a partial reimbursement or donation from the foreign organisation that received the kits. Since no GR form or commercial export documentation was used due to the nature of the shipment, the bank classifies the incoming funds under P0104, as they relate to physical goods exported without standard export compliance.

• Overseas Research Collaboration Payment:-
  A scientific institution in India sends chemical samples to a partnering university in Germany for joint research. The goods are shipped via express courier without a formal invoice or shipping bill, as it’s part of an academic exchange. The Indian institution later receives reimbursement for shipping and sample costs. Since the transaction lacks GR or EC documentation, the foreign payment is reported under P0104.

• Export of Pet Accessories by a Hobby Seller:-
  A pet lover in Ahmedabad runs a small business making custom pet collars and toys. They receive a request from a pet store in New Zealand and send a trial batch via speed post without registering the shipment as a formal export. When payment is made via bank transfer, the remittance is declared and reported under P0104, since it’s a genuine physical export without GR/EC documentation.

• Props Sent for an International Film Shoot:-
  A film production company in Mumbai sends props and costume materials to a studio in the UK for a collaborative project. Due to time constraints and the non-commercial nature of the shipment, they skipped formal customs clearance. Once the UK partner reimburses the company for these materials, the Indian bank reports the inward payment under P0104, as the goods were exported without the usual export forms.

• Export of Custom-Made Sports Equipment:-
  A small-scale sports equipment manufacturer in Meerut, UP, receives an order from a local football club located in Nigeria for handmade training cones and bibs. Due to a lack of awareness and the low order value, the shipment is sent by courier without raising a shipping bill. When the payment is credited, it is reported under P0104, as it relates to an export of physical goods that was not documented in the usual RBI-prescribed manner.

Rohan Nautiyal

A content writer, editor, and proofreader with over three years of experience in producing well-researched, user-friendly content that simplifies complex information for readers, helping brands to enhance their online presence.