RBI purpose code · Money paid abroad (outward)

S0108: Goods acquired under merchanting / payment against the import leg of merchanting trade

Short answer. S0108 is the RBI purpose code for money paid abroad: goods acquired under merchanting / payment against the import leg of merchanting trade. Both legs of a merchanting trade go through the same AD bank, and from 1 October 2026 at most six months apart.

Direction
Money paid abroad (outward)
RBI head
01 · Goods – exports and imports
Bank application
Form A2
Form 145 / 146
Usually Part D: not chargeable to tax.
Income tax
Goods (merchanting)
GST
Outside GST
Reporting
MTT · same AD bank
In FxLayer
Merchanting trade: links to the merchant trade and its proformas.

When to use S0108

Use S0108 for money paid abroad: goods acquired under merchanting / payment against the import leg of merchanting trade. It sits under RBI head 01, goods – exports and imports.

The same purpose in the other direction is P0108: Goods sold under merchanting / export leg receipt (money received).

Form A1 or Form A2

Form A2, with the request letter and the documents for both legs of the trade. Form A1 is only for goods imported into India.

Income tax

The payment to the supplier buys goods that never enter India: it is not income of the supplier that arises here. Form 145 is generally filed, usually under Part D where the supplier has no permanent establishment in India. Your margin on the trade is your own business income.

Form 145 / 146: Usually Part D: not chargeable to tax.

GST

Goods shipped from one country to another without entering India are neither a supply of goods nor of services (Schedule III of the CGST Act, paragraph 7), so neither leg carries GST.

Reporting and closure

The payment to the supplier goes under S0108 and the receipt from the buyer under P0108, through the same AD bank, so the bank can pair the two legs. For trades from 1 October 2026 the two legs must be at most six months apart; trades begun earlier keep the older four-month outlay and nine-month completion.

Questions

Form A2, with the request letter and the documents for both legs of the trade. Form A1 is only for goods imported into India.
The payment to the supplier buys goods that never enter India: it is not income of the supplier that arises here. Form 145 is generally filed, usually under Part D where the supplier has no permanent establishment in India. Your margin on the trade is your own business income. Form 145 / 146: Usually Part D: not chargeable to tax.
Goods shipped from one country to another without entering India are neither a supply of goods nor of services (Schedule III of the CGST Act, paragraph 7), so neither leg carries GST.

Guides

General information on RBI purpose codes and the FEMA, income-tax and GST rules as they stood on 14 October 2026. It is not legal or tax advice: confirm the position for your payment with your AD bank or your chartered accountant before acting.