amanwadhwa
Prime VIP
As promised on Friday, Farhad Irani here with more details for our customers in India on how to withdraw your funds from your PayPal account to a local bank account in India.
As I indicated in my earlier blog post, we are making changes to comply with Indian regulations for settlements for exports of goods and services. In order to facilitate this process, PayPal will be suspending new withdrawals on March 1, 2010. We expect to resume the service on March 3rd. When you select the ‘Withdraw Funds’ option on your PayPal account after March 3rd, we will ask you to fill out a new field entitled ‘Purpose Code’. This information is required under the laws of India in order to identify the nature of cross-border merchant transactions.
Why are we asking you to do this?
PayPal needs to put in place certain changes to comply with Indian regulations. This means that
The purpose code helps your bank furnish information that may be required by the Reserve Bank of India to identify the nature of the cross border transaction. Details on the different purpose codes are in the table below. Please note that this is different from the Importer Exporter Code (IEC) issued by the Ministry of Commerce and Industry.
When is a Purpose Code needed?
When you initiate a withdrawal, you will now be required to declare a purpose code when you are completing the bank withdrawal request.
Please note that according to Indian law, based on the value of withdrawal and the purpose code in your declaration, your bank may require you to provide documentary proofs such as invoices / goods receipt forms as applicable to reconcile with your withdrawal.
What do you need to do?
Step 1: If you have initiated a withdrawal prior to March 1st it will be restored to your PayPal balance. 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. This credit for fees and charges may take a few days to be reflected in your PayPal account balance, but we expect the full amount of the original withdrawals to be in all of the applicable PayPal accounts by the end of the week. Please bear with us as we complete this process.
Step 2: Once the funds are back in your PayPal balance, or if you have no pending withdrawals as of 1st March, starting on 3rd March you can request a new withdrawal to your local bank account, and you will need to select the Purpose Code relevant to your business.
Frequently Asked Questions
Q. What are the Purpose Codes I need to use?
Please use whichever purpose code below correctly identifies your business.
[FONT="]P0104[/FONT][FONT="]
Export of Goods[/FONT]
[FONT="]Value of export bills negotiated / purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.)[/FONT]
[FONT="]eBay merchants, jewelers, sellers of collectibles and other such products through eBay and your own websites / catalogues globally. [/FONT]
[FONT="]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.[/FONT]
[FONT="]If you have any questions, please check with your bank to help you with the same.[/FONT]
[FONT="]P0301[/FONT]
[FONT="]Travel , Hospitality and Tours[/FONT]
[FONT="]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).[/FONT]
[FONT="]Online Travel Agents, Airlines, Railways, Buses, Taxicab Services, Hotels, B&Bs and other travel / tourism related sales through PayPal[/FONT]
[FONT="]P0801 [/FONT]
[FONT="]P0802[/FONT]
[FONT="]P0803[/FONT]
[FONT="]Information Technology[/FONT]
[FONT="]Computer Information Services. Hardware / Software / Data Processing consultancy/implementation[/FONT]
[FONT="]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. [/FONT]
[FONT="]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[/FONT]
[FONT="]P0805 [/FONT]
[FONT="]P0806[/FONT]
[FONT="]Content and Journalism[/FONT]
[FONT="]News Agency and Subscription services[/FONT]
[FONT="]If you are a freelance journalist / blogger / news aggregator please use this purpose code for withdrawals. [/FONT]
[FONT="]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[/FONT]
[FONT="]P0902[/FONT]
[FONT="]Licensing of creative works[/FONT]
[FONT="]Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films)[/FONT]
[FONT="]Artists, designers, other creative service providers where the principal revenue mode is license fees, please use this code. [/FONT]
[FONT="]If you produce creative works which you license out for entities overseas, licensing revenues may be classified under this purpose code[/FONT]
[FONT="]P1004[/FONT]
[FONT="]Other services[/FONT]
[FONT="]Legal Services[/FONT]
[FONT="]If you are providing outsourced law related services[/FONT]
[FONT="]P1005[/FONT]
[FONT="]Accounting, auditing, book keeping and tax consulting services[/FONT]
[FONT="]For accounting consulting and accounting services[/FONT]
[FONT="]P1006[/FONT]
[FONT="]Business and management consultancy and public relations services[/FONT]
[FONT="]Management / brand consulting and management services can be exported with this purpose code[/FONT]
[FONT="]P1007[/FONT]
[FONT="]Advertising, trade fair, market research and public opinion polling services[/FONT]
[FONT="]Marketing/ brand consulting / logo design / event management services can be exported with this purpose code[/FONT]
[FONT="]P1008[/FONT]
[FONT="]Research & Development services[/FONT]
[FONT="]If you are an outsourced research and development services provider based in India, receipts can be inwarded through this purpose code[/FONT]
[FONT="]P1009[/FONT]
[FONT="]Architectural, engineering and other technical services[/FONT]
[FONT="]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[/FONT]
Q. What if none of the above are applicable?
The purpose codes above should cover your business. If you are unclear on what purpose code you should choose, please contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.
Q. I run a charity, and I am based in India. I don’t see the purpose code for donations and charities
A. PayPal can currently be used only as a gateway for payments of goods and services into India. We cannot process payments for charitable donations at this time.
Q. My account says I am not allowed to withdraw. I see my balances are restored but I am unable to provide a withdrawal instruction
A: We may have suspended withdrawals from your account as we work to incorporate changes in the withdrawal process. We will be requiring additional verification regarding the nature of the transactions you are performing.
Q. I used to use PayPal for Personal Inward Remittance to India. Now, my balances are stuck in PayPal
A. We are no longer able to complete these withdrawals to your bank account in India. You do have the option to complete your withdrawals by check. If you have any questions, we urge you to contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.
As I indicated in my earlier blog post, we are making changes to comply with Indian regulations for settlements for exports of goods and services. In order to facilitate this process, PayPal will be suspending new withdrawals on March 1, 2010. We expect to resume the service on March 3rd. When you select the ‘Withdraw Funds’ option on your PayPal account after March 3rd, we will ask you to fill out a new field entitled ‘Purpose Code’. This information is required under the laws of India in order to identify the nature of cross-border merchant transactions.
Why are we asking you to do this?
PayPal needs to put in place certain changes to comply with Indian regulations. This means that
- Indian PayPal users (Business, Premier and Personal Account Holders) are no longer able to receive personal payments. Your customers now have three options to pay you by
- Using the Pay for Purchases (Goods or Services) tab
- Completing PayPal checkout at your website
- Responding to PayPal “Request Money” instructions (invoices)
- When you instruct PayPal to withdraw your PayPal balance to your bank account in India, you will be required to provide a purpose code for the transaction.
The purpose code helps your bank furnish information that may be required by the Reserve Bank of India to identify the nature of the cross border transaction. Details on the different purpose codes are in the table below. Please note that this is different from the Importer Exporter Code (IEC) issued by the Ministry of Commerce and Industry.
When is a Purpose Code needed?
When you initiate a withdrawal, you will now be required to declare a purpose code when you are completing the bank withdrawal request.
Please note that according to Indian law, based on the value of withdrawal and the purpose code in your declaration, your bank may require you to provide documentary proofs such as invoices / goods receipt forms as applicable to reconcile with your withdrawal.
What do you need to do?
Step 1: If you have initiated a withdrawal prior to March 1st it will be restored to your PayPal balance. 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. This credit for fees and charges may take a few days to be reflected in your PayPal account balance, but we expect the full amount of the original withdrawals to be in all of the applicable PayPal accounts by the end of the week. Please bear with us as we complete this process.
Step 2: Once the funds are back in your PayPal balance, or if you have no pending withdrawals as of 1st March, starting on 3rd March you can request a new withdrawal to your local bank account, and you will need to select the Purpose Code relevant to your business.
Frequently Asked Questions
Q. What are the Purpose Codes I need to use?
Please use whichever purpose code below correctly identifies your business.
[FONT="]P0104[/FONT][FONT="]
Export of Goods[/FONT]
[FONT="]Value of export bills negotiated / purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.)[/FONT]
[FONT="]eBay merchants, jewelers, sellers of collectibles and other such products through eBay and your own websites / catalogues globally. [/FONT]
[FONT="]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.[/FONT]
[FONT="]If you have any questions, please check with your bank to help you with the same.[/FONT]
[FONT="]P0301[/FONT]
[FONT="]Travel , Hospitality and Tours[/FONT]
[FONT="]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).[/FONT]
[FONT="]Online Travel Agents, Airlines, Railways, Buses, Taxicab Services, Hotels, B&Bs and other travel / tourism related sales through PayPal[/FONT]
[FONT="]P0801 [/FONT]
[FONT="]P0802[/FONT]
[FONT="]P0803[/FONT]
[FONT="]Information Technology[/FONT]
[FONT="]Computer Information Services. Hardware / Software / Data Processing consultancy/implementation[/FONT]
[FONT="]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. [/FONT]
[FONT="]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[/FONT]
[FONT="]P0805 [/FONT]
[FONT="]P0806[/FONT]
[FONT="]Content and Journalism[/FONT]
[FONT="]News Agency and Subscription services[/FONT]
[FONT="]If you are a freelance journalist / blogger / news aggregator please use this purpose code for withdrawals. [/FONT]
[FONT="]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[/FONT]
[FONT="]P0902[/FONT]
[FONT="]Licensing of creative works[/FONT]
[FONT="]Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films)[/FONT]
[FONT="]Artists, designers, other creative service providers where the principal revenue mode is license fees, please use this code. [/FONT]
[FONT="]If you produce creative works which you license out for entities overseas, licensing revenues may be classified under this purpose code[/FONT]
[FONT="]P1004[/FONT]
[FONT="]Other services[/FONT]
[FONT="]Legal Services[/FONT]
[FONT="]If you are providing outsourced law related services[/FONT]
[FONT="]P1005[/FONT]
[FONT="]Accounting, auditing, book keeping and tax consulting services[/FONT]
[FONT="]For accounting consulting and accounting services[/FONT]
[FONT="]P1006[/FONT]
[FONT="]Business and management consultancy and public relations services[/FONT]
[FONT="]Management / brand consulting and management services can be exported with this purpose code[/FONT]
[FONT="]P1007[/FONT]
[FONT="]Advertising, trade fair, market research and public opinion polling services[/FONT]
[FONT="]Marketing/ brand consulting / logo design / event management services can be exported with this purpose code[/FONT]
[FONT="]P1008[/FONT]
[FONT="]Research & Development services[/FONT]
[FONT="]If you are an outsourced research and development services provider based in India, receipts can be inwarded through this purpose code[/FONT]
[FONT="]P1009[/FONT]
[FONT="]Architectural, engineering and other technical services[/FONT]
[FONT="]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[/FONT]
Q. What if none of the above are applicable?
The purpose codes above should cover your business. If you are unclear on what purpose code you should choose, please contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.
Q. I run a charity, and I am based in India. I don’t see the purpose code for donations and charities
A. PayPal can currently be used only as a gateway for payments of goods and services into India. We cannot process payments for charitable donations at this time.
Q. My account says I am not allowed to withdraw. I see my balances are restored but I am unable to provide a withdrawal instruction
A: We may have suspended withdrawals from your account as we work to incorporate changes in the withdrawal process. We will be requiring additional verification regarding the nature of the transactions you are performing.
Q. I used to use PayPal for Personal Inward Remittance to India. Now, my balances are stuck in PayPal
A. We are no longer able to complete these withdrawals to your bank account in India. You do have the option to complete your withdrawals by check. If you have any questions, we urge you to contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.
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