What Is the P0901 Purpose Code?

The P0901 purpose code covers money received from abroad for franchises services. RBI lists P0901 in group 09 of the FETERS purpose code list. Typical receipts are fees paid by a foreign franchisee to an Indian franchisor for the right to operate under its brand and system. RBI does not publish a longer definition, so confirm borderline cases with your AD bank.

P0901 vs P0902: P0902 is "Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films), patents, copyrights, trademarks, industrial processes, franchises etc." in the RBI purpose code list. Both mention franchises. P0901 is the dedicated franchise services code, so ask your AD bank which one it prefers for your fee structure.

Use the P0901 purpose code when a foreign franchisee pays an Indian franchisor under a franchise agreement. Typical cases are an upfront franchise fee, a recurring franchise fee and ongoing franchise support charges. Keep the invoice wording close to the franchise agreement. Confirm the code with your AD bank before the first receipt.

• Use P0902 instead: Use P0902 (Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films), patents, copyrights, trademarks, industrial processes, franchises etc.) when the fee is mainly a licence for a trademark, patent or copyright. See the guide on P0902.
• Use P1006 instead: Use P1006 (Business and management consultancy and public relations services) when the payment is a separate consulting fee. See the guide on P1006.
• Use P1099 instead: Ask your AD bank about P1099 (Other services not included elsewhere) when the service fits no listed code and the bank agrees.

The P0901 purpose code is used by Indian franchisors, such as restaurant, education, retail and fitness brands, that grant franchises to partners abroad. The franchisor selects P0901 with the AD bank that receives the foreign currency, and the bank reports it under FETERS in line with A.P. (DIR Series) Circular No. 84 of February 29, 2012.

• For example, an Indian restaurant chain signs a franchise agreement with a partner in Dubai and declares the upfront franchise fee under P0901.
• For example, a Bengaluru coaching brand receives a monthly franchise fee from its centre run by a partner in Sri Lanka and reports it under P0901.
• For example, a Mumbai salon brand charges a foreign master franchisee an annual fee for the right to use its system and receives it under P0901.
• For example, a Delhi fitness brand receives a franchise fee from a franchisee in Singapore and uses P0901 for the receipt.

• The foreign party pays only a licence fee for a trademark, patent or copyright. Use P0902 (Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films), patents, copyrights, trademarks, industrial processes, franchises etc.).
• The foreign party pays a separate fee for management consulting. Use P1006 (Business and management consultancy and public relations services).
• The foreign party pays for advertising or a trade fair service. Use P1007 (Advertising, trade fair service).
• The foreign party pays for software developed in India and exported. Use P0807 (Off-site Software Exports).

For the P0901 purpose code, the core documents are the franchise agreement, the invoice, and a record of the support provided. From October 01, 2026, the 2026 Export and Import Regulations also apply to exports of services. Keep these papers together so the bank can match each receipt to a fee in the agreement.

• Agreement: Keep the signed franchise agreement that shows the franchisee, the territory, the fee structure and the term.
• Invoice: Raise invoices that name the franchisee, state the franchise fee type, and show the currency, amount and period covered.
• EDF: Under Regulation 3(2) of the 2026 Regulations, in force from October 01, 2026, an exporter of services submits an Export Declaration Form within 30 days from the end of the month in which the invoice was raised. Check with your AD bank on how this applies to your invoices.
• Support records: Keep training, onboarding or support records that show the franchisor services provided for the fee.
• Bank requests: Your AD bank may ask for invoice numbers to close the EDPMS entry. Under Regulation 4(2), invoices up to ₹10 lakh can be closed on your declaration that the payment has been realised.

1. Confirm what the foreign client is paying for and check that the description of P0901 (Franchises services) fits that service.
2. Open the inward payment in your bank or payment provider's portal, app or branch form when the foreign currency arrives.
3. Select P0901 from the purpose code list, or write the code and its description if the form asks for text.
4. Add the invoice number and a short note on the service in the remarks or supporting document fields, and attach documents when asked.
5. Check that the credit advice or inward remittance certificate shows P0901, and ask your bank or payment provider to correct it if it does not.

• FIRA/FIRC: The inward remittance advice or certificate from your bank or payment provider normally records the purpose of the payment. Keep it with the invoice and contract for each receipt. Check with your AD bank on the format it issues. See the guide on FIRA.
• GST status: A supply to a foreign client is an export of services only when all five conditions in section 2(6) of the IGST Act are met, including payment in convertible foreign exchange or in rupees where RBI permits. Franchise services supplied to a foreign franchisee can meet those conditions, but the place of supply for intellectual property related services needs care, so confirm your facts with a tax professional.
• Zero rating: Export of services is a zero rated supply under section 16(1)(a) of the IGST Act, and input tax credit may be availed for it under section 16(2).
• LUT: Under section 16(3), a registered person can make zero rated supplies without paying integrated tax under bond or Letter of Undertaking. The LUT is filed as FORM GST RFD-11 on the GST portal. See the guide on LUT.
• Income tax: The purpose code does not change how the income is taxed. The income is part of your total income and is reported in your return. The Income-tax Act, 2025 replaced the 1961 Act from 01.04.2026. Take advice from a tax professional on deductions and the correct return form.
• Realisation: Under Regulation 5(1)(a) of the 2026 Regulations, the export value of services must be realised and repatriated within nine months from the date of invoice, or twelve months where the export is invoiced or settled in Indian rupees. The AD bank may extend the period.

• Code mix-up: Declaring P0901 for a pure trademark or patent licence, where P0902 may be asked for by the bank.
• Mixed fees: Combining franchise fees and separate consulting fees in one invoice with no split, which makes the code unclear.
• Vague wording: Writing only "fee" on the invoice, so the bank cannot match the receipt to the franchise agreement.
• Catch-all code: Using P1099 (Other services not included elsewhere) when P0901 describes the service.
• Late declaration: Filing the Export Declaration Form more than 30 days after the end of the invoice month without asking the AD bank for an extension.
• Amount gaps: Leaving differences between the invoice and the amount received unexplained, which delays closure with the AD bank.

The code, its official description and every rule on this page are linked to RBI and other official sources, checked on the dates below.

1. RBI: Guidelines for Submission of Data, Foreign Exchange Transactions Electronic Reporting System (FETERS), purpose code list for receipts, Annex purpose codes, receipts, Group 09 Charges for the use of intellectual property n.i.e: P0901, P0902; Group 08 P0807; Group 10 P1099 (checked 9 Oct 2026)
2. RBI A.P. (DIR Series) Circular No. 84 dated February 29, 2012: Compilation of R-Returns, Reporting under FETERS, Paragraph 3: AD banks to report all foreign exchange transactions as per the revised purpose code list from April 2012 (checked 9 Oct 2026)
3. RBI Notification No. FEMA 23(R)/2026-RB: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (amended up to September 22, 2026), Regulation 1(2) (in force from October 01, 2026); 3(2) (EDF for services); 4(2) (EDPMS closure up to ₹10 lakh); 5(1)(a) (nine months from invoice date, as amended on September 22, 2026) (checked 9 Oct 2026)
4. IGST Act, 2017, Section 2: Definitions (CBIC tax information portal), Section 2(6): definition of export of services (checked 9 Oct 2026)
5. IGST Act, 2017, Section 16: Zero rated supply (CBIC tax information portal), Section 16(1)(a), 16(2) and 16(3) (checked 9 Oct 2026)
6. GST Portal user manual: Furnishing of Letter of Undertaking (FORM GST RFD-11), Filing path Services > User Services > Furnish Letter of Undertaking (LUT) (checked 9 Oct 2026)
7. Income Tax Department e-filing portal: Objective and scope of the New Act, Repeal of the 1961 Act on 01.04.2026 and the tax year concept (checked 9 Oct 2026)