What Is the Difference Between the P0802 and P0807 Purpose Codes?
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
- Published:
- Last modified:
Short answer
P0802 is "Software consultancy/implementation (other than those covered in SOFTEX form)" and P0807 is "Off-site Software Exports". Both sit in the same RBI group for computer services. A practical test is the work delivered: consulting or implementation fits P0802, and software developed in India and exported fits P0807. Confirm the mapping with your AD bank.
| Applies to | Governed by | Deadline | Penalty | Last verified |
|---|---|---|---|---|
| Indian software developers, IT firms and freelancers who receive foreign currency for software work | A.P. (DIR Series) Circular No. 84 (purpose codes); FEMA (Export and Import of Goods and Services) Regulations, 2026, Regulation 18(2); Circular No. 20 on SOFTEX | Declare the code when the payment is received; the Export Declaration Form for services is due within 30 days of the end of the invoice month | Not applicable: no penalty specific to a wrong purpose code is published; the practical risk is mismatched records | 9 Oct 2026 |
What is the difference between the P0802 and P0807 purpose codes?
P0802 covers software consultancy and implementation other than amounts covered in a SOFTEX form. P0807 covers off-site software exports. Both are in group 08 of the current FETERS purpose code list. The dividing line in the RBI wording is the SOFTEX form, which was replaced from 1 October 2026.
- P0802: RBI description: "Software consultancy/implementation (other than those covered in SOFTEX form)". See P0802.
- P0807: RBI description: "Off-site Software Exports". See P0807.
- SOFTEX: Circular No. 20 superseded the SOFTEX circulars from 1 October 2026, and software exports are now declared on the Export Declaration Form (Regulation 3(2)).
- Wording unchanged: RBI has not changed the descriptions of either code, so the old SOFTEX wording still appears in P0802.
In practice, the nature of the work is the test. Consulting and implementation lean to P0802, and software built in India and delivered to the client leans to P0807.
Who should use P0802 and who should use P0807?
Software service providers choose between the two codes by the type of work they bill. The table shows common situations and the closer code. Confirm the final choice with your AD bank.
| Situation | Closer code | Why | Best for |
|---|---|---|---|
| Advice on software architecture or tooling | P0802 | The description names software consultancy | IT consultants |
| Configuring or implementing a platform for a client | P0802 | The description names implementation | Implementation partners |
| Building an application in India and delivering it to a foreign client | P0807 | The description names off-site software exports | Software development studios |
| Ongoing development from India for a foreign product team | P0807 | Work is done off-site and delivered from India | Offshore developers and agencies |
| Hardware advice for a foreign client | P0801 | Hardware has its own code | Infrastructure consultants |
How do you choose between P0802 and P0807?
You choose by the type of work on the invoice, then confirm with your AD bank. If the invoice bills advice or implementation, P0802 is the closer match. If it bills software built in India and exported, P0807 is the closer match.
- Read the invoice and note whether it bills advice, implementation or developed software.
- Compare the wording with the two descriptions in the current FETERS purpose code list.
- Choose the closer code. Split mixed engagements into separate invoices where the bank accepts that.
- Use the same code on the bank or payment dashboard and keep the invoice with the remittance advice.
- File the Export Declaration Form for services within the deadline.
What happened to SOFTEX for P0802 and P0807?
Circular No. 20 superseded the SOFTEX circulars from 1 October 2026. Software exports are now declared on the Export Declaration Form under Regulation 3(2). The RBI purpose code wording was not changed, so the SOFTEX reference remains in the P0802 description.
Does the choice between P0802 and P0807 change the tax treatment?
The purpose code does not change how income is taxed. GST status depends on the conditions in section 2(6) of the IGST Act. Both kinds of software work can qualify as export of services if those conditions are met. See purpose code for software export.
Which documents and deadlines matter when declaring a purpose code for P0802 and P0807?
The invoice, the engagement terms and the bank's remittance advice matter most. Two deadlines run on the same receipt: the Export Declaration Form for services is due within 30 days of the end of the invoice month (Regulation 3(2)), and realisation is due within nine months of the invoice date (Regulation 5). Your AD bank may extend the period.
| Item | What to check | Deadline or rule | Best for |
|---|---|---|---|
| Invoice | States whether the work is advice, implementation or developed software | Keep with the bank advice; RBI sets no invoice format here | Every receipt |
| Engagement terms or email | Shows the client is abroad and what you deliver | Supports the bank's check of the purpose | Banks that ask for proof of the service |
| Purpose code on the bank advice | Code matches the service on the invoice | Declared when the payment is received | Receipts used for GST or eBRC records |
| Export Declaration Form for services | Invoice value declared to the AD bank | Within 30 days of the end of the invoice month (Regulation 3(2)); AD bank may extend | Exporters of services |
| Realisation | Foreign exchange credited against the invoice | Nine months from invoice date, or twelve months if invoiced or settled in INR (Regulation 5) | Exporters tracking open invoices |
What happens if the wrong purpose code is used for software services?
A wrong purpose code means the bank, RBI and your GST records describe the same payment differently. RBI publishes no penalty specific to a wrong purpose code. The practical effects are mismatched records and extra work to correct them. See what happens if you use the wrong purpose code.
- Record mismatch: AD banks report every foreign exchange transaction with a purpose code in FETERS (Circular No. 84), so the code you declare becomes part of the reported data.
- GST evidence: Export of services depends on all conditions in section 2(6) of the IGST Act being met. A FIRA that describes a different service from your invoice weakens the evidence file. See GST on export of services.
- Correction effort: Changing a code after credit needs a written request to the AD bank. See how to correct a wrong purpose code.
- Open items: If the bank cannot match the receipt to an invoice, closing the related export record may take longer. Check with your AD bank.
If the code is already wrong, write to the AD bank that credited the money, attach the invoice and ask for the correction in writing.
Which RBI rule gives the wording for P0802 and P0807?
RBI gives the wording in the annex to Circular No. 84, and AD banks report the codes under FETERS. The table gives the verbatim description for both codes and for neighbouring codes in the same group.
| Circular or regulation | Clause | Date | Plain meaning | Best for |
|---|---|---|---|---|
| A.P. (DIR Series) Circular No. 84 annex | P0802 | 29 February 2012 | RBI description: "Software consultancy/implementation (other than those covered in SOFTEX form)" | Software consultancy and implementation |
| A.P. (DIR Series) Circular No. 84 annex | P0807 | 29 February 2012 | RBI description: "Off-site Software Exports" | Software built in India and exported |
| A.P. (DIR Series) Circular No. 84 annex | P0801 | 29 February 2012 | RBI description: "Hardware consultancy/implementation" | Hardware consultancy |
| A.P. (DIR Series) Circular No. 84 annex | P0803 | 29 February 2012 | RBI description: "Data base, data processing charges" | Database and data processing fees |
| FEMA (Export and Import of Goods and Services) Regulations, 2026 | Regulation 18(2) | In force 1 October 2026 | AD banks continue to report foreign trade transactions in FETERS | Understanding who reports the code |
| A.P. (DIR Series) Circular No. 84 | Paragraph 3 | 29 February 2012 | AD banks report all foreign exchange transactions with the revised purpose codes | Finding the source of the code list |
What are common mistakes when choosing between P0802 and P0807?
- Reading SOFTEX literally: Assuming P0802 is closed because SOFTEX ended. RBI has not withdrawn the code.
- Using one code for everything: Declaring P0807 for advisory fees, or P0802 for delivered software, on the same logic every time.
- Mixed invoices: Billing consulting and development in one line item under one code.
- Invoice mismatch: Declaring a code that does not match the service written on the invoice.
- Skipping the bank: Not asking the AD bank when it limits the codes shown on its dashboard.
- Ignoring GST: Treating the code as proof of export status. Export of services under GST depends on the conditions in section 2(6) of the IGST Act.
How did we verify this?
Every rule, deadline and form on this page is linked to its official source, checked on the dates below.
- RBI, A.P. (DIR Series) Circular No. 84 dated 29 February 2012, annex: FETERS purpose code list, Purpose code descriptions and groups (checked 9 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 84 dated 29 February 2012: Compilation of R-Returns, Reporting under FETERS, Paragraph 3: purpose codes for all foreign exchange transactions reported in FETERS (checked 9 Oct 2026)
- Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification FEMA 23(R)/2026-RB, as amended by FEMA 23(R)/(1)/2026-RB dated 22 September 2026, Regulations 3(2), 5 and 18(2) (checked 9 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20, RBI/2025-26/194: Export and Import of Goods and Services (16 January 2026), Supersession of earlier Master Directions and SOFTEX circulars from 1 October 2026 (checked 9 Oct 2026)
- IGST Act, 2017, section 2: definitions, Section 2(6): export of services (checked 9 Oct 2026)
- IGST Act, 2017, section 16: zero rated supply, Section 16(1)(a), 16(2), 16(3) (checked 9 Oct 2026)
- GST portal, user guide: Furnishing of Letter of Undertaking, LUT filing as FORM GST RFD-11 (checked 9 Oct 2026)
Frequently asked questions
Which purpose code is used for software development services, P0802 or P0807?
Software developed in India and delivered to a foreign client fits P0807, "Off-site Software Exports". Consulting and implementation fit P0802. Confirm with your AD bank. See the page on the purpose code for software export. Keep the invoice wording clear about the type of work.
Is P0802 still valid after SOFTEX was replaced?
Yes. RBI has not withdrawn P0802 or changed its wording, which still reads "Software consultancy/implementation (other than those covered in SOFTEX form)". The SOFTEX circulars were superseded from 1 October 2026 by Circular No. 20, and software exports are declared on the Export Declaration Form.
Do P0802 and P0807 qualify as export of services for GST?
Software work can be an export of services when all five conditions in section 2(6) of the IGST Act are met. The code alone does not decide it. A zero rated supply under section 16 of the IGST Act also needs a LUT or tax payment.
Can the same freelancer use both P0802 and P0807?
Yes. A freelancer who bills consulting in one invoice and delivered software in another can declare P0802 for the first and P0807 for the second. Keep each invoice clear about the work so the code matches. The AD bank decides what it will report.
How long is allowed to receive payment for software exports?
The export value of services must be realised within nine months of the invoice date, or twelve months if invoiced or settled in Indian rupees (Regulation 5). The AD bank may extend the period on request. Keep track of open invoices so the deadline is not missed.
What if the wrong software code was declared on a receipt?
Write to the AD bank that credited the payment, attach the invoice and ask for a correction in writing. See how to correct a wrong purpose code. The bank can then amend its records and reissue the advice if needed. Ask for written confirmation that the correction is complete, and keep it with the invoice.