P0202 Purpose Code: Purchases on account of operating expenses of Foreign shipping companies operating in India

Purpose code P0202 is used when a foreign shipping company's Indian operation receives money from abroad to meet its operating costs in India.

What is the P0202 purpose code?

Purpose code P0202 covers money coming into India to fund the local running costs of a foreign shipping line operating here. A shipping company based overseas that calls at Indian ports incurs expenses in India, including agency fees, port and terminal charges, crew costs and local administration, and this code records the foreign exchange brought in to meet them. The description opens with the word Purchases because FETERS records inward flows from the bank's side, as the bank purchasing foreign exchange from the customer, and the same convention appears on several other receipt codes. Under RBI FEMA guidelines, this inward payment is classified under Transportation and reported accordingly.

When to use P0202 purpose code?

Use P0202 when a foreign shipping company's Indian branch, office, or agent receives money from abroad to cover expenses incurred in India. It is the correct RBI receipt code where the operator is foreign and the costs are Indian, which is the reverse of the arrangement P0201 describes. Both the nationality of the operator and the mode of transport have to be right, since a foreign airline in the same position uses a different code.

When to use a different code:

• Use P0208 when the operator is a foreign airline company rather than a foreign shipping company
• Use P0201 when an Indian shipping company is repatriating surplus from its own operations abroad
• Use the matching S-code when you are sending money abroad rather than receiving money

Who typically uses P0202 purpose code

Indian branches, offices and appointed agents of foreign shipping lines, receiving funds from their overseas principal to meet costs incurred at Indian ports. The recipient here is the local arm of a foreign business rather than an Indian company earning from abroad, which is what distinguishes this code from most of the transport family.

Examples of transactions covered under P0202 purpose code

• Funds remitted by a foreign shipping line to its Indian office to settle port and terminal charges
• Money received from an overseas principal to cover agency fees payable in India
• Remittance to meet crew-related costs incurred while vessels are calling at Indian ports
• Periodic transfer from head office to fund the Indian operation's running expenses

When NOT to use P0202 purpose code

• The operator is a foreign airline company rather than a foreign shipping company (use P0208)
• An Indian shipping company is bringing back surplus from its own overseas operations (use P0201)
• The money is for operational leasing of a vessel with crew rather than operating expenses (use P0205)
• You are sending money abroad rather than receiving (use the matching S-code)

Documents required for P0202 purpose code

To receive a payment under P0202, keep the following documents ready so your bank can verify the transaction and report it correctly under FEMA.

How is a P0202 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Establish the local costs: The Indian operation accounts for the port, agency and crew expenses it needs to meet.
2. Receive the funds: The overseas principal remits the money to the Indian bank account.
3. Declare the purpose: State the purpose of the inward remittance, on your bank's form or through your platform.
4. Submit supporting documents: Provide the remittance advice and expense statement so the bank can verify the transaction.
5. Get your FIRA: Once processed, your FIRA is issued as proof and the payment is reported under FEMA.
6. With a traditional bank you handle each step of your payment journey. But with a platform built for cross-border payments, you can preselect a default purpose code so that the payments land smooth.

Common mistakes to avoid while using P0202 purpose code

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Using the shipping code for an airline: Applying P0202 to a foreign airline's Indian operating costs, which belongs under P0208. The descriptions differ only by mode of transport.
2. Reversing the direction of the arrangement: Using P0202 when an Indian shipping company is repatriating its own overseas surplus, which is P0201 and describes the opposite situation.
3. Code and document mismatch: The code not matching what your expense statement describes, which flags the payment.
4. Incomplete documents: Missing the remittance advice or the expense statement, so the bank cannot establish what the money is funding and holds it until provided.
5. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
6. Using an inward code for an outward payment: Applying a receipt code to money you're sending out instead of the matching outward code.

How Skydo simplifies inward remittance under P0202 Purpose Code

With a bank, you declare the purpose code on your own for every single payment. With Skydo, you can preselect your code once and every payment gets tagged automatically.

1. Preselect the code once: Set P0202 as your default and Skydo tags every incoming payment for you, so there's no form to fill on each one.
2. No repeat declarations: A bank makes you restate the purpose for every remittance. Skydo does it in the background, the same way each time.
3. Instant, free FIRA: Your remittance proof is generated and stored on every payment, ready for your CA, GST, and audits, with no request and no fee.
4. Zero FX markup: You get the live mid-market rate with a flat, visible fee, instead of a markup hidden inside the bank's rate.
5. Settled in 24 hours: Your payment reaches your Indian bank within a day, fully reported and compliant.