S1007 Purpose Code: Advertising, trade fair service

Purpose code S1007 is used when an Indian business pays a foreign vendor for advertising or trade fair related services.

What is the S1007 purpose code?

Purpose code S1007 is used when an Indian business sends money abroad to pay for advertising or trade fair related services. This covers services like overseas ad campaigns, media buying handled by a foreign agency, stall or booth charges at an international trade fair, and related promotion or exhibition support purchased from outside India. It applies to the services only and does not cover import of physical marketing materials or goods supplied as part of the event, which fall under the relevant goods import codes. Under RBI FEMA guidelines, this outward payment is classified under other business services and reported accordingly.

When to use S1007 purpose code?

Use S1007 when you are paying an overseas vendor for advertising, promotion or trade fair services delivered to your business in India or for your brand abroad. It is the correct RBI purpose code for international ad campaigns, sponsorships, exhibition participation and similar marketing services bought from a foreign partner, regardless of your business structure. S1007 covers the advertising or trade fair service component, not the import of physical goods.

When to use a different code:

• Use the code for market research or public opinion polling services when the primary service is research rather than advertising
• Use the code for management or consulting services when the primary service is business or strategy consulting rather than promotion
• Use the matching P code when you are receiving money rather than paying

Who typically uses S1007 purpose code?

Indian exporters, manufacturers, startups and SMBs that pay foreign advertising agencies, online platforms, event organisers or trade fair operators for international promotion or exhibition participation. It applies whether you pay as a private limited company, LLP, partnership or proprietorship, as long as the marketing or trade fair service is provided from outside India.

Examples of transactions covered

• Payment to an overseas exhibition organiser for stall rental and services at an international trade fair
• Fees to a foreign advertising agency for running a digital marketing campaign for your products in another country
• Sponsorship payment to an international industry event organiser for branding and promotional rights
• Service charges to a foreign company that manages your participation in multiple trade fairs abroad, including registration and on-ground support

When NOT to use S1007 purpose code

• The payment is mainly for importing physical promotional materials or merchandise rather than a service (use the relevant goods import code)
• The payment is for general business or management consulting services unrelated to advertising or trade fairs (use the appropriate consulting services code)
• The payment is for software, digital tools or platforms licensed from abroad rather than a marketing or trade fair service (use the relevant software or licence service code)
• You are receiving money rather than paying (use the matching P code)

Documents required for S1007

To send a payment under S1007, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S1007 Purpose Code declared?

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

1. Receive the vendor invoice: Your overseas advertising agency or trade fair organiser bills you, clearly describing the campaign or event services.
2. Determine taxability: Establish whether the payment is chargeable to tax in India, since that decides which part of Form 145 you file.
3. File Form 145: Submit the declaration before remitting, with Form 146 from your CA where the taxable amount exceeds ₹5 lakh in the Tax Year.
4. Complete Form A2: State the purpose of the outward remittance as S1007 and submit the supporting documents to your bank.
5. Get your MT103: Once the payment is sent, request the SWIFT MT103 as proof and retain your Form A2 record.
6. With a traditional bank you handle each step of the payment journey. But with a platform built for cross-border payments, you can preselect a default purpose code so the payments go out smooth.

Common mistakes to avoid

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

1. Confusing service with goods: Tagging payments that mainly cover imported promotional items or booth materials under S1007 instead of the correct goods import code.
2. Code and invoice mismatch: The code not matching what your vendor invoice describes, which flags the payment.
3. Assuming a Rule 220(3) exemption: Skipping Form 145 on a payment that is not on the specified list, which carries a ₹1,00,000 penalty per instance.
4. Incomplete documents: Missing invoice, contract or Form A2, so the bank holds the remittance until provided.
5. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
6. Using an outward code for an inward receipt: Applying a payment code to money coming in instead of the matching P code.

How Skydo helps with payments under S1007 Purpose Code

With a bank, you fill a fresh Form A2 and chase documents for every single vendor payment. With Skydo, your outward payments run on the same account you already collect into.

1. One account, both directions: Receive from international clients and pay overseas vendors from a single onboarded account, with one KYC.
2. Purpose code applied consistently: Set S1007 as your default for these payments so every remittance is tagged the same way.
3. Documentation in one place: Your invoices, Form A2 records and payment proofs stay together, ready for your CA and your AD bank.
4. A rate you can see: You get the live mid-market rate with a transparent fee, instead of a markup hidden inside the bank's rate.
5. Payments that go out on schedule: Your vendor gets paid without a branch visit or a week of back and forth.