Farhad Irani from Paypal team has come up again with a wonderful news for Indian PayPal users. He confirmed that there is no need to get an Import Export code [IEC] for withdrawing funds from their PayPal account to Indian Bank account. The only thing required now is a Purpose code which is way different from an IEC code.
What is PayPal Purpose code?
Purpose code is a five digit alphanumeric code which is to be entered while withdrawing funds from PayPal to your local bank account. This code helps your bank provide information required by the Reserve Bank of India [RBI] to identify the nature of transaction. Well yes, this is the new Law by Indian Regulators.
How to get Purpose Code for PayPal Account?
Well, Purpose Code is not same as IEC (Import Export Code). PayPal requires a small five digit alphanumeric code which gives information about the transactions you have made in bank account to Paypal, Banks & Indian Regulatory. There is no need to make any real efforts to get the Purpose Code.
Just wait upto 3rd March 2010 for requesting withdrawal to your bank account along with a paypal purpose code relevant to your business. You can find the list of the purpose code required by paypal here.
| 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 |
| P0801 P0802 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 |
| P0805 P0806 | 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 |
At a quick look, it seems like Code P0805 suits me.
If you are not sure about your code from the table above,, please contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.
If you’ve already withdrawn your money from your Paypal account prior to March 1st, then you’ll have to wait for few days to get the full amount credited back. [No transaction charges or fees will be deducted]. The initial amount you receive back in your PayPal balance will be less than the amount you withdrew; all applicable fees and charges will be credited to your PayPal account separately. Once it’s fully credited back you can initiate a withdrawal request again to your local bank account providing the Purpose Code relevant to your business.
Note : Also, with this new changes in Paypal now Paypal cannot be used for Charity and Donations in India, as there is no Code for Charities.
Related : Register or Buy Domain in ANY LANGUAGE (NON LATIN, NON ENGLISH)
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