What is purpose code P1003?

Purpose code P1003 covers operational leasing without crew, including charter hire, for airline companies.⁴⁵ It is one of two leasing codes in RBI's group P10; the other, P1021, is for shipping companies.⁴

P1003 is sometimes confused with P1006, the consultancy code, because the two sit close together in the list. They describe very different payments.⁴

What does the P1003 purpose code cover?

The P1003 purpose code covers operational leasing without operating crew, including charter hire, for airline companies. RBI's receipt purpose code list describes P1003 as: "Operational leasing services (other than financial leasing) without operating crew, including charter hire- Airlines companies".⁴⁵ DGFT's purpose code to SAC mapping reproduces the same wording.² P1003 sits in group P10, "Other Business Services".⁴

The list comes from A.P. (DIR Series) Circular No. 84 dated 29 February 2012, which told banks to report all foreign exchange transactions under a revised purpose code list from April 2012.¹ RBI's annex PDF showed a captcha page when this page was checked, so the wording above is quoted from the HDFC Bank and DBS Bank India reproductions, which match each other word for word.⁴⁵

When should you use the P1003 purpose code?

Use the P1003 purpose code when a foreign party pays to use an aircraft or equipment you lease out without an operating crew, where the description's reference to airline companies applies.⁴ The client pays for the use of an asset, with no people supplied to run it.⁴

• Operating lease: The lease is operational, which the description separates from financial leasing.⁴
• No crew supplied: You do not supply pilots or other operators; leasing with crew for airlines is P0211.⁴
• Airline context: The description names airline companies; shipping companies have P1021.⁴

If more than one description could fit, confirm P1003 with your bank before the payment is credited.⁴

Who uses the P1003 purpose code?

P1003 fits Indian businesses that lease aircraft or equipment to a foreign party without supplying an operating crew, including charter hire, where the description's reference to airline companies applies.⁴ DGFT's mapping links P1003 to "Rental services of aircraft" (996603) and also to leasing of transport equipment, agricultural, construction and office machinery, other machinery and other goods.²

• Airlines: Indian airline companies leasing aircraft to a foreign airline without crew.
• Aircraft and equipment owners: Owners hiring out aircraft or equipment to an overseas airline on an operating lease.
• Other lessors: Non-airline lessors, which DGFT's wider SAC mapping touches, should confirm the code with their bank.²

What transactions are covered under P1003?

Transactions covered under P1003 are lease rentals and charter hire for aircraft or equipment supplied without crew.⁴ Each example below fits the description:

• Dry lease of an aircraft: For example, an Indian company leases an aircraft to a foreign airline without crew.
• Equipment operating lease: For example, an Indian owner of equipment hires it out to an overseas airline on an operating lease.
• Charter hire without crew: For example, an Indian airline charters out an aircraft to a foreign carrier that supplies its own pilots.
• Ground equipment: For example, an Indian lessor rents transport equipment to a foreign airline for a season, with no operator supplied, where DGFT's leasing SACs apply.²

Which SAC codes does DGFT map to the P1003 purpose code?

DGFT's purpose code to SAC mapping (Version 1.0, 10 November 2023) lists these Services Accounting Codes (SAC) against P1003:²

When you generate an electronic Bank Realisation Certificate (e-BRC) on the DGFT portal, DGFT says you must choose the SAC that corresponds to the purpose code on the remittance.³ The mapping is many-to-many, so the same SAC can appear against several purpose codes.²

When should you not use the P1003 purpose code?

Do not use the P1003 purpose code for professional services, for leasing with crew, or for shipping.⁴ Each case below names the code to compare:

• Consulting work: A management consultant, strategist or PR adviser uses P1006, "Business and management consultancy and public relations services".⁴ The two are compared in P1003 vs P1006.
• Aircraft leased with crew: Operational leasing with crew for airlines is P0211.⁴
• Ships leased without crew: Shipping companies leasing without crew use P1021.⁴
• Ships leased with crew: Operational leasing with crew for shipping companies is P0205.⁴

Where a payment sits on the line between two codes, the contract and invoice usually show which service the client is paying for, so keep them ready for the bank.

What documents are required for P1003?

A payment under P1003 needs the documents any export of services needs: an invoice, the Export Declaration Form (EDF), and the bank's inward remittance record that the e-BRC is generated from.⁶³ Under regulation 3(2) of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations), an exporter of services files the EDF with the specified authority within 30 days from the end of the month in which the invoice was raised.⁶

For software, the specified authority can also be Software Technology Parks of India (STPI), and in a Special Economic Zone it is the Development Commissioner.⁶ Exporters of services other than software may file the EDF on or before the date payment is received instead.⁶

How do you declare the P1003 purpose code?

You declare the P1003 purpose code by telling your bank the purpose of the inward remittance, then making sure the same code carries through to the EDF and the e-BRC.³⁶ The steps below follow that order.

1. Match the work to the P1003 description: Compare what the foreign client pays for with the RBI description of P1003 and the neighbouring codes.⁴
2. Describe the service on the invoice: Describe the service on the export invoice in words that match the P1003 description, so the bank can see why the code fits.⁴
3. Give the bank the P1003 purpose code: Tell your bank that the purpose of the inward remittance is P1003 when the payment arrives, using the bank's own inward remittance process.³
4. File the Export Declaration Form: File the EDF with the specified authority within 30 days from the end of the month in which the invoice was raised, or for non-software services on or before the date payment is received.⁶
5. Check the IRM and generate the e-BRC: Check that the bank's inward remittance message shows P1003, then generate the e-BRC on the DGFT portal and choose the SAC that corresponds to P1003.³

DGFT's eBRC FAQs place e-BRC generation under Services, then eBRC, then Generating eBRC, after you register on the DGFT website and link your Importer Exporter Code (IEC).³

How does P1003 affect FIRA, GST and income tax?

The P1003 purpose code states the purpose of the payment on the bank's record; GST, realisation and income tax follow their own rules.³ The code matters most where the e-BRC and the SAC you choose must line up with it.³

• FIRA: Ask your bank for its inward remittance advice, often called a Foreign Inward Remittance Advice (FIRA), and check that it shows the same purpose code before you rely on it for GST or bank records.
• e-BRC: DGFT describes the e-BRC as its confirmation that the exporter has received payment for the export of goods or services, and says the SAC you choose must correspond to the purpose code.³
• GST: A supply is an export of services under section 2(6) of the IGST Act, 2017 when the supplier is in India, the recipient is outside India, the place of supply is outside India, payment is received in convertible foreign exchange (or in Indian rupees where RBI permits), and the two are not merely establishments of a distinct person.⁷ Export of services is a zero rated supply, and a registered person can supply under bond or Letter of Undertaking without paying integrated tax.⁸
• Realisation: Regulation 5(1) of the 2026 Regulations requires the value of exported services to be realised within nine months from the date of invoice, or twelve months where the export is invoiced or settled in Indian rupees.⁶
• Income tax: The sources on this page do not cover income tax, and how a receipt is taxed depends on your facts, so confirm it with a chartered accountant.

For the GST side in more depth, see purpose codes and GST on export of services.

What are the common mistakes with the P1003 purpose code?

The common mistakes with the P1003 purpose code are choosing it for work another code describes, and leaving a wrong code uncorrected after the bank has reported it.⁴³

• Typing P1003 for P1006: A consultant whose fee is reported as P1003 has it recorded as an airline lease; P1003 does not describe professional services.⁴
• Leaving a wrong code in place: DGFT's eBRC FAQs say exporters must contact the bank to request a purpose code change, and that banks can amend the inward remittance message (IRM) they report to DGFT.³ Send the bank the remittance reference, the code used, the code you need and your invoice.
• Choosing a SAC that does not match: DGFT says exporters must choose the SAC that corresponds to the purpose code when generating an e-BRC.³

The full steps are in how to correct a purpose code after payment, and the effects are covered in what happens if you use the wrong purpose code.

Which purpose codes are related to P1003?

The purpose codes related to P1003 are the other leasing codes and the consultancy code it is often confused with, listed below from RBI's list.⁴⁵

To compare every receipt code, see the RBI purpose codes list for exporters, or shortlist codes for your work with the purpose code finder. Where a payment could fit more than one description, confirm the code with your bank or a chartered accountant before the money is credited.