New Paypal withdrawal Instructions – Using Purpose Code

Here’s the latest update over the Paypal India Issue Resolution. Couple of days back, it was told that Paypal has cleared everything with RBI and will now be implementing new withdrawal policies to mean Indian Regulations.

Though I did provide some Paypal alternatives, who wouldn’t like all Paypal issues to be resolved and start using the account as usual. Currently, all withdrawals from Paypal for Indians have been suspended. Paypal is in the process of implementing withdrawal policy changes, and this service will be available again from March 3rd.

In a latest post on the Paypal Blog, it has been put how Indians can withdraw money from their accounts. The details are mentioned here:

What is the new Paypal Withdrawal policy for Indians?

Under the new policy, users will be asked to enter a new field, “Purpose Code”. This information is required under the laws of India in order to identify the nature of cross-border merchant transactions.

How can customers pay?

Now personal payments and transfers have been barred for Indians. So payments can be accepted only via the following methods:

  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)
  4. When you instruct PayPal to withdraw your PayPal balance to your bank account in India, you will be required to provide a purpose code for the transaction.

What is a purpose code?

So, a purpose code defines your purpose behind enabling the cross-border transaction. The code will depend on the nature of your business or services provided. Note: This code is different from Importer Exporter Code (IEC) issued by the Ministry of Commerce and Industry. You can find out which Purpose Code is for you via the following table:

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
P0801P0802

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
P0805P0806 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

If you are not sure about your code from the table above, you can contact the Paypal customer care, by logging in to the site.

Also, Paypal cannot be used for Charity and Donations. It has to be used for Goods and Services.

Hope, this will resolve most of the issues and everyone will be able to withdraw money. Based on the purpose code, banks may tend to ask for Invoice details. Withdrawal resumes from 3rd March’10.

People who were using Paypal for personal remittances, cannot use it so further. They can get back their money deposited via Cheque withdrawal. Hope you found this information useful, do leave your queries below.

Written by Piyush Agarwal

Piyush Agarwal is a part-time freelance webdesigner who loves to play with design and the web around. You can check out his designs on Technix Designs. He is also into Theatre and Photography.

2 Responses to New Paypal withdrawal Instructions – Using Purpose Code

  1. [email protected] Audit Software says:

    Thanks for sharing this info man! Very informative. i was recently looking for such topic in google. Great that I found it here.

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