What is Purpose Code P0802?
P0802 is one of the most important purpose codes for India’s IT services sector. It covers software implementation and consultancy services billed to foreign clients under service contracts — explicitly excluding SOFTEX-route software exports (which are exports of packaged or custom software under the Software Technology Parks of India scheme). P0802 applies to the vast majority of Indian IT services revenue: offshore software development, ERP implementation, application customisation, IT consulting, and technology project services billed on a time-and-material or fixed-fee basis.
The ‘other than SOFTEX’ qualifier is important — SOFTEX is a specific export declaration for packaged or custom software physical exports. P0802 covers the service-contract mode of IT delivery, which is how most Indian IT giants (TCS, Infosys, Wipro, HCL) and mid-size IT firms bill their foreign clients.
See all RBI purpose codes
When to Use P0802
Use P0802 when you receive foreign currency for software services delivered under a service contract to a foreign client. Common scenarios:
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- An Indian IT services company receiving milestone or monthly payments for an offshore software development project for a foreign client
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- An Indian SAP/Oracle consulting firm receiving implementation fees from a foreign company for ERP customisation and deployment
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- An Indian software consultancy receiving time-and-material billing from a foreign client for application development and testing services
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- An Indian IT company receiving fixed-fee payments for building a custom software application for a foreign business
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- An Indian technology consultancy receiving retainer fees from a foreign client for ongoing software development and support services
Quick check: Are you receiving payment for IT services delivered offshore under a service contract? Use P0802. For off-site software exports or freelancer tech receipts (including SaaS, product-based), see P0807. For data processing and analytics, use P0803.
Wrong Code? Use These Instead
| If your money is from… | Correct code to use |
|---|---|
| Off-site software exports / SaaS / freelance tech receipts | P0807 |
| Database and data processing / analytics | P0803 |
| Hardware consultancy / implementation | P0801 |
| Repair and maintenance of software | P0804 |
| Franchise services / IP licensing | P0901 or P0902 |
Documents to Keep Ready
| Document | Why you need it |
|---|---|
| Software services agreement / MSA | Master Service Agreement or project contract confirming the scope, timeline, and pricing |
| Invoice / timesheet billing | Records the services rendered — hours, milestones, or deliverables — and the amount billed |
| Project completion / acceptance certificate | Foreign client’s sign-off on the work delivered |
| SWIFT / wire transfer confirmation | Confirms the inward remittance from the foreign client |
| e-FIRA | Official proof of inward remittance tagged P0802 — essential for STPI / SEZ export records |
| STPI / SEZ registration (if applicable) | For entities operating in IT export zones — confirms export entity status |
What is an e-FIRA — and Why Does It Matter?
An e-FIRA (Electronic Foreign Inward Remittance Advice) is the official proof that foreign money entered India. It confirms the nature and purpose of the inflow, which matters for tax treatment, FEMA compliance, and audit trails.
Your bank generates it automatically once the funds land. You can usually download it from your internet banking portal or request it at your Forex desk. The e-FIRA will reflect the correct purpose code, which your CA or accounts team will reference during filings.
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Frequently Asked Questions
Q: What is RBI purpose code P0802?
P0802 is used when an Indian IT company or software consultant receives payment from a foreign client for software implementation, customisation, or IT consultancy services delivered under a service contract. It covers the dominant mode of India’s IT exports — offshore service delivery — and is one of the highest-volume inward remittance codes in the Indian banking system.
Q: What is the difference between P0802 and P0807?
P0802 is for software services delivered under a service contract — time-and-material billing, fixed-fee project work, ERP implementation, and consulting. P0807 is for off-site software exports and freelancer digital tech receipts — including SaaS subscription revenue, software product exports, and payments to individual Indian tech freelancers from foreign platforms like Upwork or Toptal. P0802 is primarily for IT services companies; P0807 captures product exports and gig economy tech work.
Q: Do Indian IT companies in STPs (Software Technology Parks) or SEZs use P0802?
Yes. Companies registered with STPI (Software Technology Parks of India) or operating in IT SEZs export their services primarily under P0802. The STPI framework requires proper foreign exchange reporting, and P0802 is the standard code for IT service export receipts. The e-FIRA tagged P0802 is an important document for STPI annual performance and export obligation compliance.
Q: What is the difference between P0802 and SOFTEX?
SOFTEX is an export declaration form (similar to a shipping bill for goods) used when Indian companies physically export packaged or custom software on media (CD, USB) or via electronic transmission under the Software Export Declaration route. P0802 is the purpose code for the payment received for software services delivered under a service contract — no SOFTEX is filed for P0802 transactions. Most Indian IT services exports today use P0802, not SOFTEX.
Q: Can an Indian company billing a foreign client on a time-and-material basis for application development use P0802?
Yes. Time-and-material billing — where the Indian developer tracks hours and bills at an agreed hourly or daily rate — is the most common billing model for offshore IT development. Each invoice payment from the foreign client is an inward remittance tagged P0802. The service contract or Master Services Agreement (MSA) is the key supporting document.
Q: Is P0802 income zero-rated for GST as an export of services?
Yes, in most cases. IT services provided to foreign clients where the recipient is outside India and payment is received in foreign currency qualify as export of services under GST — making them zero-rated (0% GST). Indian IT companies can claim refund of input GST on zero-rated exports. The place of supply for IT services to foreign entities is generally outside India, supporting the zero-rating. Your CA should confirm for any cases where the foreign client has a presence in India.
