RBI purpose code · Money paid abroad (outward)

S1403: Interest on loans from non-residents (trade credit / buyer's credit)

Short answer. S1403 is the RBI purpose code for money paid abroad: interest on loans from non-residents (trade credit / buyer's credit). It goes on Form A2 with Form 145. For income tax it is interest, so tax is withheld at the Act or treaty rate. It is exempt from GST.

Direction
Money paid abroad (outward)
RBI head
14 · Salary, interest, dividends and profit
Bank application
Form A2
Form 145 / 146
Part A up to ₹5 lakh in the year; above it Part C with Form 146.
Income tax
Interest
GST
Exempt
Reporting
Form A2 · Form 145
In FxLayer
A service: links to service invoices.

When to use S1403

Use S1403 for money paid abroad: interest on loans from non-residents (trade credit / buyer's credit). It sits under RBI head 14, salary, interest, dividends and profit.

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 P1403: Interest on loans extended to non-residents (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

Interest paid to a non-resident is chargeable in India: 20% plus surcharge and 4% cess (20.8% when there is no surcharge) under the Act (lower under the concessional provisions for qualifying external commercial borrowing and trade credit, where they apply), or the treaty rate with the payee's TRC and Form 41.

Form 145 / 146: Part A up to ₹5 lakh in the year; above it Part C with Form 146.

GST

Interest on a loan or trade credit is an exempt supply (Notification 9/2017-IT(R), entry 28).

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).
Interest paid to a non-resident is chargeable in India: 20% plus surcharge and 4% cess (20.8% when there is no surcharge) under the Act (lower under the concessional provisions for qualifying external commercial borrowing and trade credit, where they apply), or the treaty rate with the payee's TRC and Form 41. Form 145 / 146: Part A up to ₹5 lakh in the year; above it Part C with Form 146.
Interest on a loan or trade credit is an exempt supply (Notification 9/2017-IT(R), entry 28).

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.