S1108 Purpose Code: Health Service (payment towards services received from hospitals, doctors, nurses, paramedical and similar services etc. rendered remotely or on-site)

Purpose code S1108 is used when an Indian business pays a foreign hospital or medical professional for health services rendered remotely or on-site.

What is the S1108 purpose code?

Purpose code S1108 is used when an Indian business sends money abroad to pay for health services received from foreign hospitals, doctors, nurses, paramedical staff or similar medical providers. This covers payments for inpatient or outpatient treatment at an overseas facility, specialist consultations, remote telemedicine sessions and other clinical services delivered from outside India. It is meant for medical services, not for importing medicines, equipment or other health related goods, which fall under import of goods codes. Under RBI FEMA guidelines, this outward payment is classified under personal, cultural and recreational services and reported accordingly.

When to use S1108 purpose code?

Use S1108 when you are paying an overseas hospital, clinic or medical professional for health services delivered to your employees, clients or insured persons. It is the correct RBI purpose code for medical treatment, consultations and paramedical services bought from a foreign provider, whatever your business structure. S1108 covers the medical service itself, not the import of medicines or equipment.

When to use a different code:

• Use the relevant import of goods code when the payment is for medicines, medical devices or equipment supplied as goods
• Use the appropriate insurance related code when the payment is for an overseas health insurance premium or claim settlement
• Use the matching P code when you are receiving money rather than paying

Who typically uses S1108 purpose code?

Indian companies, insurers and organisations that pay foreign hospitals, clinics or medical practitioners for treatment or clinical services. It applies whether you pay as a private limited company, an LLP, a proprietorship or another entity, as long as the health service comes from outside India.

Examples of transactions covered

• Payment to an overseas hospital for surgery and inpatient care provided to an employee while abroad
• Fees to a foreign specialist for a series of online teleconsultations for a complex medical case
• Payment to an international clinic for diagnostic tests and reports arranged for your insured customer
• Charges from an overseas nursing agency for on-site nursing and paramedical support provided at a foreign location

When NOT to use S1108 purpose code

• The payment is for medicines, devices or medical equipment imported as goods rather than a service (use an import of goods code)
• The payment is for overseas health insurance premiums or claim settlements (use the appropriate insurance remittance code)
• The payment is for non-medical training, conferences or seminars abroad (use the relevant travel or training service code)
• You are receiving money rather than paying (use the matching P code)

Documents required

To send a payment under S1108, keep the following documents ready so your authorised dealer bank can verify the transaction and report it correctly under FEMA.

How is a S1108 Purpose Code declared?

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

1. Receive the medical invoice: Your overseas hospital, clinic or doctor bills you, clearly describing the health services provided and the patient details.
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 S1108 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 medical services with import of goods: Tagging payment for medicines or equipment as S1108 instead of the correct import of goods code.
2. Code and invoice mismatch: The code not matching what your medical 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, treatment estimate, 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 an S code to money coming in instead of the matching P code.

How Skydo helps with payments under S1108 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 S1108 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 medical provider gets paid without a branch visit or a week of back and forth.