Taxation & Compliance
Posted on Mar 24, 2025
You’re running ad campaigns for a US-based client, conducting market research for a UK company, or organising an expo in Dubai. The invoice is sent, the payment is on its way, and then—your bank asks for a purpose code.
What does it mean? Why does it matter?
If you’ve ever felt lost in banking formalities, you’re not alone. This guide will explain what Purpose Code P1007 is, when to use it, and how to get paid without compliance issues.
What is Purpose Code P1007? (Full Form and RBI Classification)
Purpose Code P1007 is an RBI classification used to track foreign exchange transactions related to:
Advertising services (digital campaigns, traditional media ads, branding)
Market research (studies, consumer insights, trend analysis)
Public opinion polling (surveying and polling for international clients)
Trade fair services (exhibitions, event management, B2B showcases)
Whenever you receive international payments for any of these services, you must report it under P1007. This way, the RBI accurately records the inflow and avoids compliance issues.
For reference, you can always refer to the RBI Official Notification – Purpose Code P1007
Who Needs to Use Purpose Code P1007
If you're dealing with global clients and providing advertising, market research, or trade fair services, Purpose Code P1007 is a non-bargain when taking payments. Here's whom it covers:
Ad Agencies Conducting Global Campaigns
If your ad agency produces ad campaigns for US, UK, or EU clients, the amount you earn comes under P1007. Whether it's online marketing, social media marketing, or brand promotion—this is the correct classification.
Companies Attending Trade Fairs
Are you organising an expo stall, exhibiting products at an international B2B show, or acting as a representative of Indian companies overseas? Fees for these services must be reported under P1007.
Startups Conducting Market Research
If your company is conducting surveys, studying consumer behaviour, or offering market insights for foreign companies, this is the code that facilitates easy transactions.
Polling Firms Managing International Projects
If you're receiving and processing public opinion data for international clients, P1007 is the proper classification for your payments.
Bottom line: Your hard-earned cash is on the line. File your purpose code incorrectly, and you may experience payment delays or compliance issues. Stay on top of it to keep everything running smoothly.
How to File Purpose Code P1007 for Foreign Payments
Entering the proper purpose code is easy but important. Here's how:
Step 1: Get Paid Through SWIFT or Foreign Wire Transfer
Ensure your foreign client pays you through an accepted international payment channel like SWIFT or a foreign wire transfer.
Step 2: Report Purpose Code P1007
When your bank requests a purpose code, tell them that the payment is under P1007. Some banks let you input this online, but others will ask you to confirm via email.
Step 3: Get FIRA/e-BRC for Compliance
After making the payment, ask your bank to issue a Foreign Inward Remittance Advice (FIRA) or an Electronic Bank Realization Certificate (e-BRC). These are evidence of international transactions and are required for tax as well as compliance purposes.
For more information on e-BRC, see our article on Everything You Want to Know About e-BRC and DGFT.
Common Filing Mistakes of P1007 and How to Avoid Them
Most companies experience delays and non-compliance because of improper purpose code filing. Below are some of the common errors and how to do it correctly:
Incorrect purpose code usage:
P1006 (consulting services) or P1008 (R&D) are not equal to P1007.
P0802 (software services) does not include advertising or market research.
Solution: Always double-check the proper code before filing.
Failure to declare a purpose code at all:
Omission of the declaration may cause payment delays or inquiries from banks.
Solution: Be sure to use P1007 when your client makes the transfer.
Avoidance of delay in compliance documentation:
Delayed submission will result in penalty or deducted payment.
Solution: Ask your bank for FIRA or e-BRC at once upon receiving payment.
To know more, refer to our blog on Avoid Compliance Errors in Cross-Border Payments to India
How Infinity Helps with Receipt of International Currency
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Desire a smooth payment experience? Read how Infinity facilitates Indian companies to receive international payments easily.
Final Thoughts
As an Indian business or freelancer serving international clients in advertising, research, or trade fairs, using Purpose Code P1007 to file your payments is crucial for compliance and smooth transactions.
State the right purpose code.
Prevent typical filing errors.
Utilise a trusted payment solution such as Infinity for quick, low-cost and hassle-free transactions.
Enjoy smooth payment, stay compliant, and grow your business. Find out how Infinity can make international payments easy today.
FAQs
What services fall under Purpose Code P1007?
Ad services, market research, public opinion surveys, and trade fair services for foreign clients.
Can freelancers use P1007 for ad services abroad?
Yes. If you're a freelancer managing Google Ads, Facebook Ads, or any online marketing campaign for a foreign client, you must report payments under P1007.
What is Purpose Code P1007?
Purpose Code P1007 is a classification used by the Reserve Bank of India (RBI) for outward remittances related to advertising, market research, trade fair.
