What Is the P1003 Purpose Code?

The P1003 purpose code covers money received from abroad for operational leasing of aircraft to airline companies, without operating crew, including charter hire. RBI lists P1003 in group 10, Other Business Services. Financial leasing is excluded by the wording of the description itself. Leasing with crew sits in a different group, as P0211, and shipping companies have their own code, P1021. AD banks report the chosen code under FETERS, as set out in A.P. (DIR Series) Circular No. 84 of February 29, 2012. Regulation 18(2) of the 2026 Export and Import Regulations keeps this FETERS reporting in place.

P1003 vs P0211: P0211 is "Receipt on account of operational leasing (with crew) – Airlines companies" in the Transport group. The two codes differ on one point: crew. If the aircraft is leased without operating crew, P1003 is the closer match. If the lease includes the operating crew, P0211 is the closer match.

Use the P1003 purpose code when an Indian lessor receives payment from a foreign airline company for operational leasing of aircraft without operating crew, including charter hire. The deciding questions are who supplies the crew and whether the lease is operational or financial. The RBI purpose code list has separate codes for leasing with crew and for shipping companies, so check the alternatives below before you choose P1003.

• Use P0211 instead: Use P0211 (Receipt on account of operational leasing (with crew) – Airlines companies) when the lease includes the operating crew.
• Use P1021 instead: Use P1021 (Operational leasing services (other than financial leasing) without operating crew, including charter hire- Shipping companies) when the lessee is a shipping company.
• Use P1099 instead: Use P1099 (Other services not included elsewhere) only when no more specific code describes the service, and confirm with your AD bank first.

The P1003 purpose code is used by Indian residents or companies that lease aircraft to foreign airline companies without operating crew, and by Indian charter operators that receive charter hire on that basis. Few freelancers or small exporters use P1003. The Indian recipient of the payment declares P1003 to the AD bank that credits the foreign currency.

• For example, an Indian aircraft leasing company leases a passenger aircraft to an airline in Africa on a dry lease and receives the monthly lease rent under P1003.
• For example, an Indian owner of a cargo aircraft gives it on charter hire to a foreign airline company without crew and receives the hire charges under P1003.
• For example, an Indian company leases spare aircraft to a Middle East airline for a fixed season without supplying pilots and declares the rent under P1003.
• For example, an Indian lessor receives the monthly operating lease rental on an aircraft leased to a foreign carrier, with the lessee supplying its own crew, and declares P1003.

• The lease includes the operating crew. Use P0211 (Receipt on account of operational leasing (with crew) – Airlines companies).
• The lessee is a shipping company. Use P1021 (Operational leasing services (other than financial leasing) without operating crew, including charter hire- Shipping companies).
• The Indian airline receives freight fare for carrying cargo abroad. Use P0219 (Receipts of freight fare by Indian Airlines companies operating abroad).
• The arrangement is financial leasing, such as a loan-like finance lease. Use Not P1003, since RBI excludes financial leasing. Ask your AD bank which code applies..

For the P1003 purpose code, the core documents are the invoice, the contract or engagement letter, and an Export Declaration Form (EDF). Under Regulation 3(2) of the 2026 Export and Import Regulations, in force from October 01, 2026, an exporter of services must furnish an EDF with the full export value. For services other than software, the EDF may be submitted on or before the date of receipt of payment. This changes paragraph B.7 of the Master Direction, superseded by A.P. (DIR Series) Circular No. 20, which let such services be exported without a declaration.

• Invoice: Raise an invoice or lease rental note naming the foreign airline company and describing the lease or charter, the period covered, the amount and the currency.
• Contract: Keep the aircraft lease or charter agreement showing that the lease is operational, that it is without operating crew and who the lessee is.
• EDF: Submit the Export Declaration Form to an Authorised Dealer in the DTA, or to the SEZ Development Commissioner in an SEZ. One EDF can cover all services exported to one or more recipients in a month. SOFTEX did not apply to this type of service.
• Work evidence: Keep delivery and redelivery records, rent statements and any correspondence with the lessee, in case the bank or a tax officer asks what was supplied.
• Bank requests: Your AD bank may ask for KYC details or the remitter's details. Under Regulation 4(2), invoices up to ₹10 lakh can be closed in EDPMS on your declaration that the payment has been realised.

1. Check the invoice and contract to confirm the payment is for operational leasing of aircraft without operating crew, including charter hire, to a foreign airline company.
2. Open the inward payment in your bank or payment provider's portal, app or branch form when the foreign currency arrives or when you are asked for the purpose.
3. Select P1003 from the purpose code list, or write the code and its description if the form asks for text.
4. Attach or keep ready the invoice, contract and Export Declaration Form, and add the invoice number in any remarks field so the payment can be matched.
5. Confirm the code shown on the credit advice or inward remittance certificate is P1003, and ask your bank or payment provider to correct it if it is wrong.

• FIRA/FIRC: The inward remittance advice or certificate your bank or payment provider issues normally records the purpose of the payment. Keep it with the matching invoice. Check with your AD bank on the exact format it issues.
• GST status: Leasing to a foreign airline company is an export of services only if all five conditions in section 2(6) of the IGST Act are met. Place of supply rules for hiring of means of transport can differ from other services, so confirm the treatment with a tax professional before treating the lease as a zero rated supply under section 16(1)(a) of the IGST Act.
• 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: Section 16(3) allows a registered person to make zero rated supplies without payment of integrated tax under bond or Letter of Undertaking. The LUT is filed as FORM GST RFD-11 on the GST portal.
• Income tax: The purpose code does not change how the income is taxed. Receipts for this service are part of your income and are reported in your return. The Income-tax Act, 2025 replaced the 1961 Act from 01.04.2026. Take advice from a tax professional on the correct head and 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 September 22, 2026 amendment cut these from fifteen and eighteen months. Your AD bank may extend the period on request.

• Crew included: Using P1003 when the lease includes operating crew. RBI lists leasing with crew under P0211 (Receipt on account of operational leasing (with crew) – Airlines companies).
• Wrong lessee: Using P1003 for a lease to a shipping company, which RBI lists under P1021.
• Financial lease: Declaring P1003 for a financial lease. RBI's description says other than financial leasing.
• Catch-all code: Using P1099 (Other services not included elsewhere) when P1003 describes the lease.
• Freight fare: Treating freight fare received by an Indian airline as P1003. RBI lists those receipts under separate transport codes such as P0219.
• No EDF: Assuming lease income needs no declaration. From October 01, 2026, Regulation 3(2) requires an EDF for services, filed on or before the date of receipt of payment for services other than software.

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 10 Other Business Services: P1002, P1003, P1004, P1006, P1021, P1022, P1099; Group 02 Transport: P0211, P0219 (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); 2(1)(f) (specified authority for services other than software); 3(2) and 3(2)(b) (EDF for services, on or before receipt of payment for non-software services); 4(2) (EDPMS closure up to ₹10 lakh); 5(1)(a) (nine months from invoice date, as amended on September 22, 2026); 18(2) (FETERS reporting) (checked 9 Oct 2026)
4. RBI A.P. (DIR Series) Circular No. 20 dated January 16, 2026: Export and Import of Goods and Services, Paragraphs 4 and 7 and Annex A: Master Direction on Export of Goods and Services and listed circulars, including the SOFTEX circulars, superseded from October 01, 2026 (checked 9 Oct 2026)
5. RBI: Export Declaration Form, Annex to the 2026 Regulations, Part 2B (details of services provided to multiple recipients) and Part 5 (certification by Custom, SEZ, Authorised Dealer or STPI) (checked 9 Oct 2026)
6. RBI Master Direction: Export of Goods and Services (updated as on July 17, 2026; superseded from October 01, 2026), Superseded from October 01, 2026; cited only to explain the earlier rule in paragraph B.7 (export of services without a specified form) (checked 9 Oct 2026)
7. IGST Act, 2017, Section 2: Definitions (CBIC tax information portal), Section 2(6): definition of export of services (checked 9 Oct 2026)
8. IGST Act, 2017, Section 16: Zero rated supply (CBIC tax information portal), Section 16(1)(a), 16(2) and 16(3): zero rated supply, input tax credit, supply under bond or Letter of Undertaking (checked 9 Oct 2026)
9. 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)
10. 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)