RBI purpose code · Money paid abroad (outward)

S0203: Freight on imports – shipping companies

Short answer. S0203 is the RBI purpose code for money paid abroad: freight on imports – shipping companies. It goes on Form A2 with Form 145. For income tax it is freight to a foreign carrier, outside the withholding section. Whether GST applies under reverse charge depends on the service.

Direction
Money paid abroad (outward)
RBI head
02 · Transport
Bank application
Form A2
Form 145 / 146
Part D: not chargeable in the payer's hands.
Income tax
Shipping / airline
GST
Check with your CA
Reporting
Form A2 · Form 145
In FxLayer
A service: links to service invoices.

When to use S0203

Use S0203 for money paid abroad: freight on imports – shipping companies. It sits under RBI head 02, transport.

Choose the code for what you are buying. The code decides the tax nature below, so a wrong code can mean the wrong rate of tax or a missing Form 145.

Form A1 or Form A2

Form A2: the application for every payment abroad other than for goods imported into India. With it go the invoice, the agreement or purchase order and, unless the code is on the specified list, the Form 145 acknowledgement (and Form 146 for Part C).

Income tax

Freight or fares paid to a foreign shipping company or airline sit outside the withholding section: CBDT Circular 723 of 19 September 1995, and the shipping and air transport article of the treaty where there is one. The carrier is assessed under the shipping provisions. Check that the payee is the carrier or its agent, not a freight forwarder.

Form 145 / 146: Part D: not chargeable in the payer's hands.

GST

Ocean freight on an import: after Mohit Minerals (SC 2022) and Notification 13/2023-IT(R) the specific reverse-charge entry is gone; on an FOB import where you pay the line yourself, practice is split — many pay 5% under reverse charge with credit. Confirm with your CA. Where it applies, reverse charge is at 5%.

Reporting and closure

The bank reports the payment under its code. FxLayer keeps the invoice, the Form 145 / 146 acknowledgements and the treaty papers on the payment, so the request goes to the bank complete.

Questions

Form A2: the application for every payment abroad other than for goods imported into India. With it go the invoice, the agreement or purchase order and, unless the code is on the specified list, the Form 145 acknowledgement (and Form 146 for Part C).
Freight or fares paid to a foreign shipping company or airline sit outside the withholding section: CBDT Circular 723 of 19 September 1995, and the shipping and air transport article of the treaty where there is one. The carrier is assessed under the shipping provisions. Check that the payee is the carrier or its agent, not a freight forwarder. Form 145 / 146: Part D: not chargeable in the payer's hands.
Ocean freight on an import: after Mohit Minerals (SC 2022) and Notification 13/2023-IT(R) the specific reverse-charge entry is gone; on an FOB import where you pay the line yourself, practice is split — many pay 5% under reverse charge with credit. Confirm with your CA. Where it applies, reverse charge is at 5%.

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.