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 cost reimbursements require detailed invoice descriptions and RBI purpose code S0997 for foreign remittance. Invoices for SEZ-to-DTA cost reimbursements must state they are reimbursements of shared operating expenses (rent, electricity, travel, administration support, advertising, trade fairs, market research, etc.) incurred by the SEZ unit on behalf of the head office and expressly note no markup. For foreign currency remittance of such reimbursements, the advised RBI purpose code is S0997, subject to confirmation against the RBI purpose-code list.