Purpose codes

Which purpose code applies to an advance payment from a foreign client?

Author:: Editorial team, serviceexportguide.com
Verified by:: Editorial team
Published: 28 October 2026
Last modified: 30 October 2026
Reading time: 5 min read

Short answer

RBI's code for advances is P0103, "Advance receipts against export contracts, which will be covered later by GR/PP/SOFTEX/SDF - other than Nepal and Bhutan".¹ DGFT lets exporters generate an e-BRC on a P0103 receipt alone.²³ P0103 is the only code DGFT lets you club with another code in one e-BRC.²

Applies to	Governed by	Deadline	Penalty	Last verified
Exporters receiving an advance from a foreign client before the export¹⁴	RBI Circular No. 84 (P0103); FEMA (Export and Import of Goods and Services) Regulations, 2026, regulations 10, 13, 18 and 19; DGFT eBRC rules¹²⁴	Not applicable	Not applicable	28 October 2026

Agencies and consultants often ask for part of the fee upfront: a deposit before a branding project, a first milestone before development starts, or a retainer paid in advance. When that money arrives from abroad, the bank needs a purpose code before the work has been delivered.¹

For the RBI and FEMA side of advances in more depth, see advance payment against exports.

What is the purpose code for an advance payment against export?

The purpose code for an advance payment against export is P0103, "Advance receipts against export contracts, which will be covered later by GR/PP/SOFTEX/SDF - other than Nepal and Bhutan", in Annex I to A.P. (DIR Series) Circular No. 84 dated 29 February 2012.¹

Group: P0103 sits in group P01, "Exports (of Goods)", although its description names SOFTEX, the former software export form.¹
Older lists: an older bank list reproduced by Nordea describes P0103 as "export of goods only".⁶
SOFTEX: from 1 October 2026 the Export Declaration Form (EDF) under the 2026 Regulations covers software exports, in place of SOFTEX.⁴

We found no RBI document, as of October 2026, that says how P0103 should be read for advances on non-software services after that date.¹⁴

Who does the P0103 advance code apply to?

The P0103 advance code applies to exporters who receive money before the export, and banks differ on whether a service advance uses P0103 or the service code.¹²

Entity type	Applicable?	Why	Best for
Software exporter receiving an advance	Usually P0103	DGFT accepts P0103 in "Services > IT" and lets it be clubbed with P0807²	Developers and IT firms
Consultant, designer or marketer receiving an advance	Ask the bank	The P0103 wording names goods and software forms¹	Service exporters whose bank classifies advances by service
Exporter using the service code from the start (for example P1006 or P1007)	Depends on the bank	The advance is reported like any other service receipt¹	Banks that classify a service advance by the service it pays for
Upwork freelancer	Upwork's choice	Upwork says its India payouts are hardcoded to P0103 or P1006⁵	Freelancers paid through Upwork

The first two columns are our summary; the e-BRC behaviour is from DGFT's rules.²

Note: For an advance on a design, marketing, consulting or tutoring contract, ask your bank whether it wants P0103 or the service code. The answer depends on the bank's practice and your contract.¹²

How do you receive an export advance under the right purpose code?

You receive an export advance under the right purpose code by agreeing the code with your bank before the money arrives and keeping the advance and the final payment at the same bank.¹⁴

Agree the advance in the contract: record the advance, the work it relates to and the later invoice.
Ask the bank which code it uses: P0103 or the service code.¹
Route the advance through your export bank: regulation 10(1) says the advance and the realisation of export proceeds go through the same authorised dealer (AD), unless the change has been intimated to both ADs.⁴
Check the credit advice: confirm the purpose code shown.
Link the advance in the e-BRC: DGFT's FAQs say exporters select all the inward remittance messages (IRMs), including the advance IRM, against the shipping bill or invoice when generating the e-BRC.³

How does a P0103 advance work with e-BRCs?

A P0103 advance can be certified on its own or combined with the later receipt for the same export.²³

e-BRC use	What DGFT says	Best for
Standalone	DGFT's FAQs give the example of a $100 advance under P0103 and say an e-BRC can be generated for P0103 for standalone cases³	Advances where the final payment is still pending
Combined	Exporters select all IRMs, including the advance IRM, against the invoice³	Projects paid partly in advance and partly on delivery
IT services	P0103 is one of four codes accepted for "Services > IT", with P0802, P0803 and P0807²	Software exporters
Clubbing	P0103 is the only code that can be clubbed with another purpose code in a single e-BRC²	Exporters whose advance and final payment carry different codes

Which RBI rules apply to export advances?

The FEMA (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations), in force from 1 October 2026, contain the RBI rules for export advances.⁴

Regulation	Plain meaning	Best for
Regulation 10(1)	Route the advance and the export proceeds through the same AD, unless the change is intimated to both ADs⁴	Every exporter receiving an advance
Regulation 10(4)	Interest on an export advance must not exceed the all-in-cost ceiling for trade credit⁴	Contracts that pay interest on advances
Regulation 13	Where proceeds remain unrealised more than one year after the due date, further exports only against full advance or an irrevocable letter of credit⁴	Exporters with old unpaid invoices
Regulation 18	An AD may, on request with reasons, close the EDPMS entry for an export advance where no export was made and refund is not possible⁴	Cancelled projects
Regulation 19	Each AD has an internal policy and standard operating procedure covering advance receipts for exports, among other things⁴	Checking your bank's process

What happens if an export advance is coded wrongly?

If an export advance is coded wrongly, ask the bank that credited the money to amend the code.³

Amendment: DGFT's FAQs say exporters must contact the bank to request purpose code changes.³
e-BRC: DGFT notes that where the bank sends an IRM with the advance's purpose code, the exporter can self-generate the e-BRC.³
Platform advances: Upwork says it does not control which of P0103 or P1006 is used and that you must contact your bank if you need a different code.⁵ See purpose code for Upwork payments.

See how to correct a purpose code after payment.

What are the common mistakes with purpose codes on export advances?

The common mistakes with purpose codes on export advances come from not agreeing the code and the bank before the money arrives.¹⁴

Assuming P0103 fits every service: the P0103 wording names goods and software forms, so ask the bank for non-software services.¹
Switching banks between advance and final payment: regulation 10(1) expects the same AD unless both are told.⁴
Mixing up GST and the purpose code: GST on advances for services is decided by GST law. See GST on advance received from a foreign client.
Leaving a cancelled advance open: if the project is cancelled, see refund of an advance export payment.
Not checking completed-work payouts: a freelancer paid for completed work under P0103 should check how the bank links that receipt to an invoice.⁵

How did we verify this?

We checked this page against the sources below on 30 October 2026. Read our methodology or report an error.

Frequently asked questions

Can an exporter generate an e-BRC for an advance received under P0103?+

An exporter can generate an e-BRC for an advance received under P0103. DGFT's FAQs say an e-BRC can be generated for P0103 in standalone cases, and DGFT's eBRC rules say P0103 can be used standalone or clubbed with another purpose code, which no other code allows.²³

Is purpose code P0103 only for exports of goods?+

The 2012 RBI description of P0103 refers to GR, PP, SOFTEX and SDF, which are goods and software declaration forms, and an older bank list reproduced by Nordea says "export of goods only".¹⁶ For an advance on a non-software service, ask your bank whether it reports P0103 or the service code.

Do the advance and the final payment have to go through the same bank?+

Regulation 10(1) of the FEMA (Export and Import of Goods and Services) Regulations, 2026 says an exporter routes the advance and the realisation of export proceeds through the same authorised dealer bank, unless the change has been intimated to both banks.⁴ Agree the receiving bank with the client before the advance is sent.

What happens if the work never happens and the export advance cannot be refunded?+

Under regulation 18 of the FEMA (Export and Import of Goods and Services) Regulations, 2026, an authorised dealer bank may, on request with reasons, close the EDPMS entry for an export advance where no export was made and refund of the advance is not possible.⁴ See refund of an advance export payment for the steps.

Is interest allowed on an advance received for export of services?+

Regulation 10(4) of the FEMA (Export and Import of Goods and Services) Regulations, 2026 says interest payable on an advance received for export must not exceed the all-in-cost ceiling for trade credit under the FEMA borrowing and lending regulations.⁴ Check any contract that pays interest on an advance against that ceiling.

How does an exporter combine an advance and the later payment in one e-BRC?+

DGFT's FAQs say exporters select all the inward remittance messages, including the advance IRM, against the shipping bill or invoice when generating the e-BRC.³ DGFT's eBRC rules allow P0103 to be clubbed with P0807 for "Services > IT", and P0103 is the only code that can be clubbed with another.²

This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.

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RBI and FEMA