What Is the Purpose Code for Advance Payment Against Exports?
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
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Short answer
The RBI purpose code for advance payment against exports is P0103. Its description reads: Advance receipts against export contracts, which will be covered later by GR/PP/SOFTEX/SDF, other than Nepal and Bhutan. Use it when a foreign buyer pays before goods ship. For a services advance, confirm the code with your AD bank.
| Applies to | Governed by | Deadline | Penalty | Last verified |
|---|---|---|---|---|
| Exporters who receive money from a foreign buyer before shipment or invoice | RBI FETERS purpose code list (Circular No. 84, 2012) and Regulation 10 of the FEMA export regulations, 2026 | No fixed shipment period in the 2026 regulations; AD bank policy applies | FEMA contraventions can attract penalty | 9 Oct 2026 |
Which purpose code applies to an advance payment against exports?
P0103 is the Group 01 code for advance receipts against export contracts. The 2012 list has no separate advance code for services, so the AD bank decides how an advance for a service export is coded.
- Official wording: "Advance receipts against export contracts, which will be covered later by GR/PP/SOFTEX/SDF – other than Nepal and Bhutan" (FETERS list).
- Group: P0103 sits in Group 01, Exports (of Goods).
- Routing: The advance and later proceeds must go through the same AD bank unless both banks are told of a change (Regulation 10(1)).
- Interest: Interest on the advance must not exceed the trade credit ceiling referred to in Regulation 10(4).
- Unverified area: The list does not say whether a services advance uses P0103 or the service code. Ask your AD bank.
For the rule itself, see advance payment against exports under RBI rules. For the single code, see P0103.
Who uses the purpose code for advance payment against exports?
Exporters who are paid before they ship or deliver use the advance code. The table lists common cases and what to check with the AD bank.
| Case | Code to consider | Why | Best for |
|---|---|---|---|
| Goods exporter with a part payment before shipment | P0103 | Advance receipt against an export contract | Manufacturers and traders |
| Full payment received before shipment | P0103 | Same description applies to the advance | Exporters of made-to-order goods |
| Freelancer with a deposit before invoice | Ask AD bank | The list has no separate services advance code | Freelancers and consultants |
| Balance paid after shipment | P0102 or P0101 | Describes realisation of export bills | Exporters with staged payments |
How do you select the purpose code for an advance export payment on a bank or dashboard?
Select the advance code in the purpose field when the money is credited before the export is complete, and state the export contract in any remarks. Then match the advance to the shipment or invoice once the export happens.
- Keep the contract or proforma invoice that shows the advance.
- Tell the buyer to quote the contract number in the remittance.
- Enter P0103 in the purpose field, or the code your AD bank advises.
- Download the inward remittance advice and keep it with the contract.
- Ship the goods or deliver the services and issue the invoice.
- Check that the AD bank has matched the advance in EDPMS. See EDPMS closure.
How does GST apply to an advance payment against exports?
A supply of goods or services is an export only when the export conditions in the IGST Act are met. The purpose code does not decide GST. Section 16 treats export of goods or services as a zero rated supply.
- Export of services must meet all five conditions in section 2(6) of the IGST Act.
- A registered person can export without paying IGST under a Letter of Undertaking (FORM GST RFD-11).
- Ask a tax professional whether tax applies to an advance for services or goods you have not yet supplied.
How does the advance purpose code appear on the FIRA and eBRC?
The inward remittance advice or certificate your AD bank issues normally records the purpose of the payment. Keep it with the invoice and contract. Check with your AD bank on the exact format it issues. Under the DGFT eBRC guidelines, an eBRC for P0103 cannot be generated before the shipping bill or invoice date for the advance.
Which purpose codes are often confused with the advance payment code?
P0103 is confused with P0101, P0102 and P0105, which deal with export bills after shipment. The advance code applies before shipment.
| Code | RBI description | Distinction | Best for |
|---|---|---|---|
| P0103 | Advance receipts against export contracts, which will be covered later by GR/PP/SOFTEX/SDF – other than Nepal and Bhutan | Money arrives before shipment | Exporters taking advances |
| P0102 | Realisation of export bills (in respect of goods) sent on collection (full invoice value) – Other than Nepal and Bhutan | Money arrives after shipment on collection | Exporters on collection terms |
| P0101 | Value of export bills negotiated / purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.) – Other than Nepal and Bhutan | Bank negotiates or discounts the bill | Exporters needing early funds |
| P0109 | Export realisation on account of exports to Nepal and Bhutan, if any | Exports to Nepal or Bhutan | Exporters to those countries |
What happens if the wrong purpose code is used for an advance against exports?
A wrong code can leave the advance unmatched to the later export. The advance then stays open in EDPMS and the AD bank may follow up.
- Open entry: An advance never matched to an export stays open and the bank must follow up (Regulation 18(1)(f)).
- eBRC: The DGFT guidelines treat advances separately from shipment dates, so a wrong code can block eBRC generation.
- Penalty: Contravening a FEMA regulation can attract penalty, for example routing through different banks without informing both.
Write to the AD bank with the contract and remittance advice and ask for the purpose to be corrected. If the export will not happen, ask about refund or closure. See refund of an advance when the export is not completed.
Which RBI rules govern the purpose code and routing of advance export payments?
The FETERS list gives the code. Regulation 10 of the 2026 FEMA export regulations governs routing and interest on the advance.
| Circular or regulation | Clause | Date | Plain meaning | Best for |
|---|---|---|---|---|
| A.P. (DIR Series) Circular No. 84 | Annex I | 29 February 2012 | P0103 for advance receipts against export contracts | Choosing the code |
| FEMA 23(R)/2026-RB | Regulation 10(1) | In force 1 October 2026 | Advance and later proceeds through the same AD bank, or inform both banks | All exporters taking an advance |
| FEMA 23(R)/2026-RB | Regulation 10(4) | In force 1 October 2026 | Interest on advance capped at the trade credit ceiling | Contracts paying interest to the buyer |
| A.P. (DIR Series) Circular No. 20 | Supersession | 16 January 2026 | Earlier Master Directions superseded from 1 October 2026 | All exporters |
What mistakes do exporters make with the purpose code for advance payments?
- Wrong group: Using a bill realisation code for money received before shipment.
- Split banks: Taking the balance through another AD bank without informing both banks, against Regulation 10(1).
- No contract: Taking a deposit with no contract or proforma invoice.
- Unmatched advance: Leaving the advance open after the order is cancelled.
- Services assumption: Assuming P0103 fits a services advance without asking the AD bank.
- Late eBRC: Trying to generate an eBRC before the shipping bill or invoice date.
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: Guidelines for Submission of Data, FETERS, purpose code list for receipts (A.P. (DIR Series) Circular No. 84, 29 February 2012), Annex I, receipt purposes (checked 9 Oct 2026)
- Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, FEMA 23(R)/2026-RB, amended up to 22 September 2026 (checked 9 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20 dated 16 January 2026: Export and Import of Goods and Services, Supersession of the earlier Master Directions and SOFTEX circulars from 1 October 2026 (checked 9 Oct 2026)
- IGST Act, 2017, Section 2: Definitions (CBIC tax information portal), Section 2(5) export of goods, section 2(6) export of services (checked 9 Oct 2026)
- IGST Act, 2017, Section 16: Zero rated supply (CBIC tax information portal), Section 16(1) to (3) (checked 9 Oct 2026)
- GST Portal user manual: Furnishing of Letter of Undertaking (FORM GST RFD-11) (checked 9 Oct 2026)
- DGFT: Self-Certified eBRC Generation Guidelines, Version 1.0 (10 November 2023), P0103 and shipping bill or invoice date (checked 9 Oct 2026)
Frequently asked questions
Is P0103 the purpose code for advance payment against exports?
Yes. P0103 reads: Advance receipts against export contracts, which will be covered later by GR/PP/SOFTEX/SDF, other than Nepal and Bhutan. It sits in Group 01, Exports (of Goods). Use it when money arrives before the goods ship.
Can a freelancer use P0103 for an upfront deposit?
The 2012 list places P0103 in the goods group and has no separate services advance code. A freelancer should ask the AD bank which code it accepts for a services deposit, and keep the contract and invoice.
What purpose code applies to the balance paid after shipment?
The balance after shipment is normally coded as realisation of export bills. P0102 covers bills sent on collection, and P0101 covers bills negotiated or discounted. Match the code to how your bank handled the bill.
Is there a deadline to ship goods after an advance under the 2026 regulations?
The 2026 regulations do not set a fixed shipment period for an advance. Regulation 19 leaves advance receipts to each AD bank's internal policy. Ask your AD bank for its policy and keep a record of the answer.
Does P0103 affect GST on the later export?
No. GST status depends on the IGST Act conditions for export of goods or services, not on the purpose code. Export is a zero rated supply under section 16, and a registered exporter can file an LUT to export without paying IGST.
What happens to the advance if the export is cancelled?
The exporter can refund the buyer or write to the AD bank with reasons and ask for closure under Regulation 18(1)(i). Do not leave the advance open in EDPMS. See the linked guide on refunds.