Correct Invoice Description & RBI Purpose Code for SEZ to DTA Cost Reimbursement (Cross Charge)

[Sudhir M]

Under SEZ rules, our SEZ unit issues monthly invoices to our Head Office (DTA) for shared operating costs (rent, electricity, travel, etc.) without markup. For bank remittance in foreign currency, the bank has requested a clear description of services instead of just mentioning 'cross charge.'

What would be the correct description to mention on the invoice to satisfy SEZ and RBI remittance requirements? Also, which RBI purpose code should be used for such reimbursement?

[Sadanand Bulbule]

"Cross Charge" is a generic term.

What needs in the invoice is the full description of reimbursement of shared operating expenses like rent, electricity, travel, administration support, advertising, trade fairs, market research etc., incurred by SEZ unit on behalf of Head Office [DTA]- without mark up.

Such details are important for enusring foreign exchange payments are processed correctly, reported accurately, and comply with RBI guidelines.

RBI Purpose Code- S0997

[Shilpi Jain]

Do have a look at this link for the list of purpose codes

https://www.rbi.org.in/upload/notification/pdfs/52220.pdf

Are these expenses incurred by SEZ in forex?

AI Summary

SEZ units must itemize reimbursed shared operating costs to DTA with full descriptions; use RBI purpose code S0997 SEZ unit invoices to the DTA for reimbursed shared operating costs must state a full, specific description of the expenses incurred on behalf of the Head Office-e.g., reimbursement of rent, electricity, travel, administrative support, advertising, trade-fair and market-research expenses-without markup, rather than using the generic term 'cross charge.' This detail aids banks and RBI reporting for foreign currency remittances. The suggested RBI purpose code for such reimbursements is S0997, subject to confirmation against the prevailing RBI purpose-code list and whether the expenses were actually incurred in foreign exchange.