RBI purpose code · Money paid abroad (outward)

S0901: Franchises services

Short answer. S0901 is the RBI purpose code for money paid abroad: franchises services. It goes on Form A2 with Form 145. For income tax it is royalty, so tax is withheld at the Act or treaty rate. GST is paid under reverse charge at 18%.

Direction
Money paid abroad (outward)
RBI head
09 · Royalties, licences and franchises
Bank application
Form A2
Form 145 / 146
Part A up to ₹5 lakh paid to the payee in the year; above it Part C with a CA's Form 146 (or Part B with a tax officer's certificate).
Income tax
Royalty
GST
Reverse charge 18%
Reporting
Form A2 · Form 145
In FxLayer
A service: links to service invoices.

When to use S0901

Use S0901 for money paid abroad: franchises services. It sits under RBI head 09, royalties, licences and franchises.

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 P0901: Franchises services (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

Royalty. Paid by a resident, it is treated as arising in India wherever the right is used, so tax is withheld under section 393(2) of the Income-tax Act, 2025 (formerly section 195): 20% plus surcharge and 4% cess (20.8% when there is no surcharge) under the Act, or the lower treaty rate when the payee gives a tax residency certificate (TRC) and Form 41 (formerly Form 10F).

Form 145 / 146: Part A up to ₹5 lakh paid to the payee in the year; above it Part C with a CA's Form 146 (or Part B with a tax officer's certificate).

Payee countryRoyaltyTechnical fees
United States15% (Art. 12)15% (Art. 12) · make-available test
United Kingdom15% (Art. 13)15% (Art. 13) · make-available test
Singapore10% (Art. 12)10% (Art. 12) · make-available test
United Arab Emirates10% (Art. 12)No article: business profits
Germany10% (Art. 12)10% (Art. 12)
Netherlands10% (Art. 12)10% (Art. 12)
Japan10% (Art. 12)10% (Art. 12)
Australia15% (Art. 12)15% (Art. 12) · make-available test
Canada15% (Art. 12)15% (Art. 12) · make-available test
France10% (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.

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).
Royalty. Paid by a resident, it is treated as arising in India wherever the right is used, so tax is withheld under section 393(2) of the Income-tax Act, 2025 (formerly section 195): 20% plus surcharge and 4% cess (20.8% when there is no surcharge) under the Act, or the lower treaty rate when the payee gives a tax residency certificate (TRC) and Form 41 (formerly Form 10F). Form 145 / 146: Part A up to ₹5 lakh paid to the payee in the year; above it Part C with a CA's Form 146 (or Part B with a tax officer's certificate).
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.

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.