P0107 Purpose Code: Realisation of NPD export bills (full value of bill to be reported)

Purpose code P0107 is used when an Indian exporter realises an overdue export bill that has been converted to collection mode, and the full invoice value must be reported.

What is the P0107 purpose code?

What is the P0107 purpose code?

Purpose code P0107 is used when an Indian exporter receives payment for an overdue export bill that was earlier converted to collection mode, and the full value of the original invoice is reported at realisation. This applies specifically to goods export bills once collection is complete, not to the earlier conversion step. It differs from P0106, which covers converting the bill to collection mode rather than realising it. Under RBI FEMA guidelines, this inward payment is classified under Export of Goods and reported accordingly.

When to use P0107 purpose code?

When to use P0107 purpose code?

When to use a different code:

• Use P0107 when you are realising an overdue export bill that has already been converted to collection mode, and you need to report the full invoice value. It is the correct code for that final realisation step.
• Use P0106 when you are converting the overdue bill to collection mode rather than realising it
• Use P0102 when you are realising an export bill sent on collection that was never overdue
• Use the matching S-code when you are paying a foreign vendor rather than receiving money

Who typically uses P0107 purpose code

Who typically uses P0107 purpose code

Goods exporters in India who are realising payment on an export bill that had gone overdue and moved to collection mode. It applies whether the exporter invoices as a proprietorship, partnership, or registered company.

Examples of transactions covered

• Examples of transactions covered under P0107 purpose code
• Final payment received on an overdue export bill that was moved to collection mode
• Full invoice value realised after a foreign buyer clears a delayed shipment payment
• Bank-reported realisation of a previously overdue trade bill
• Closure of a collection-mode export bill once the foreign buyer pays in full

When NOT to use P0107 purpose code

• When NOT to use P0107 purpose code
• The bill is being converted to collection mode rather than realised (use P0106)
• The bill was never overdue and is a normal collection realisation (use P0102)
• The payment is for a service export rather than goods (use the matching service code)
• You are paying a foreign vendor rather than receiving (use the matching S-code)

Documents required

Documents required for P0107 purpose code

To receive a payment under P0107, keep the following documents ready so your bank can verify the transaction and report it correctly under FEMA.

How is a P0107 Purpose Code declared?

How is a P0107 Purpose Code declared?

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

1. Confirm collection mode: Verify the bill was already converted to collection mode under P0106.
2. Receive the payment: The foreign buyer clears the full invoice value through the bank.
3. Declare the purpose: State the purpose of the inward remittance using P0107 on your bank's form.
4. Submit supporting documents: Provide the shipping bill, invoice, and KYC 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

Common mistakes to avoid while using P0107 purpose code

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

1. Confusing realisation with conversion: Tagging the bill with P0107 when it should be P0106 for the conversion step.
2. Code and invoice mismatch: The code not matching what your shipping bill and invoice describe, which flags the payment.
3. Incomplete documents: Missing shipping bill, invoice, or KYC, so the bank holds funds until provided.
4. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
5. Ignoring small payments: Assuming low-value receipts don't need the correct code, which invites scrutiny.
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 helps Indian businesses with cross-border payments

How Skydo simplifies inward remittance under P0107 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 P0107 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.