When to use S0803
Use S0803 for money paid abroad: database and data processing charges (cloud hosting). It sits under RBI head 08, software, IT, telecom and information.
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.
The same purpose in the other direction is P0803: Database and data processing charges (money received).
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
A software licence, SaaS or cloud subscription. Under the Act a licence to use software is royalty; under a tax treaty it is not, following Engineering Analysis Centre of Excellence v CIT (Supreme Court, 2021), because no copyright passes to the user. With the payee's treaty papers (TRC, Form 41 and a no-permanent-establishment declaration) nothing is withheld and Form 145 Part D is filed. Without them the Act rate applies: 20% plus surcharge and 4% cess (20.8% when there is no surcharge).
Form 145 / 146: Part D with the treaty papers; otherwise Part A or C at the Act rate.
| Payee country | Royalty | Technical fees |
|---|---|---|
| United States | 15% (Art. 12) | 15% (Art. 12) · make-available test |
| United Kingdom | 15% (Art. 13) | 15% (Art. 13) · make-available test |
| Singapore | 10% (Art. 12) | 10% (Art. 12) · make-available test |
| United Arab Emirates | 10% (Art. 12) | No article: business profits |
| Germany | 10% (Art. 12) | 10% (Art. 12) |
| Netherlands | 10% (Art. 12) | 10% (Art. 12) |
| Japan | 10% (Art. 12) | 10% (Art. 12) |
| Australia | 15% (Art. 12) | 15% (Art. 12) · make-available test |
| Canada | 15% (Art. 12) | 15% (Art. 12) · make-available test |
| France | 10% (Art. 13) | 10% (Art. 13) |
Starting figures from FxLayer's treaty table, with the TRC and Form 41 on file. Treaty texts and protocols change; your CA confirms the rate for each country before you pay.
GST
IGST at 18% under reverse charge: the business in India that imports the service pays it in its own GST return (Notification 10/2017-Integrated Tax (Rate), entry 1) and takes the credit where it is eligible. Where the buyer is not registered under GST (an individual, for example), the foreign provider charges IGST itself as an online information and database access or retrieval (OIDAR) supplier.
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
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.