Purpose Code for FIRC

This query is : Resolved

Gaurav Gupta (Querist)
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17 July 2024 I sell virtual gaming stickers of various online games which are sent to users directly within the game. I receive money in paypal.. I want to know which purpose code should I use in paypal for receiving these payments.. Are these virtual stickers considered as goods or services?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 It is service, when you have designed it.

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 Sir i have not designed it.. I don't own these online games.. They are created by someone else.. I just play them and sell virtual stickers that are inside the game to foreign people.. I want to know what purpose to select for receiving payments in Paypal..

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Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 Further these cards are generated within the game.. And the game allows the players to trade these cards with each other.. I sell these cards to foreign people and receive money via paypal in USD. I'm not sure which purpose code to show in Paypal. Please revert back..

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 It is called facilitation, a kind of service.

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 Sir what purpose code should be selected then in Paypal? This purpose code will also be mentioned in FIRC by bank so please help regarding this..

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 Sir please answer my query..

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 The query can be best answered by paypal help center, I can reply it as per IT act.

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Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 Sir they are saying you're receiving payment for your online work so you have to select a purpose code from the list provided on paypal. Their are around 25 purpose codes and i don't know which best describes my work...

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 'P0806' would be most suitable to your work.

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 I have been using P0104 cross border delivery of goods and services( not covered by GR, PP, Softex, Shipping bill).

Is this incorrect?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 Not proper as per your services.

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Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 If I use P0806 will i be required to get SOFTEX registration as well?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 Only if you provide their services, otherwise not.

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 I just sell virtual stickers and do nothing else..

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 So, not required..

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 I checked the purpose code you provided.

P0806 Other information services- Subscription to newspapers, periodicals, etc.

Selling stickers comes under category of subscriptions?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 Select code for "To receive payments from advertising such as Kontera, BuySellAds, and Infolinks ... " as per data available with me it is P0806. Verify if it has changed.

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 P1006- Business and consultancy management
P1003- Operational leasing services
P1106- Recreation and sporting activity services
P0104- cross border delivery of goods and services
P0806- Other Information Services
P0801- Hardware Consultancy/Implementation
P1101- Audio visual ans related services
P1022- Other Technical Services Including scientific/ space services
P0803- Database or data processing services
P1007- Advertising and market research
P0807- Off site software exports
P1002- trade related services- commission on export/imports
P0804- Repair and maintenance of computer and software
P0808- Telecommunications services
P0802- Software Consultancy
P1104- Entertainment Services
P1109- Other personal and recreational service
P0805- News agency services

Sir these are the list of purpose code available on paypal for selection. Please look into it.

One more thing I wanted to clarify I buy stickers from indian sellers and sell them to foreigners. I buy limited stickers from other sellers rest I generate them myself and sell them.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 Tick .. P1109.

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 Sir i file my gst returns as well.. Are you sure about P1109 as I don't want gst related issues that may arise on wrong selection of purpose code in FIRC...

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 If you are claiming any ITC over stickers purchased from others, then let the code remain as it is. Otherwise, this one is more suitable.

Gaurav Gupta

Gaurav Gupta (Querist)
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18 July 2024 No sir I'm not claiming any ITC as I purchase from unregistered individuals. Is reverse charge apply in my case? As far as I have read online it apply only on notified services and selling stickers does not come under any of the notified services..

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 July 2024 For Reverse charge under GST over such services, I am not very sure. Get it confirmed through any GST expert.

Gaurav Gupta

Gaurav Gupta (Querist)
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19 July 2024 Sir can these virtual stickers come in P1104- Entertainment services category?

Sorry to bother you again but i asked a few other people as well they said it might fall in P1104 as well. Please reply back.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 July 2024 Yes, it can also be option, being a service category.

Gaurav Gupta

Gaurav Gupta (Querist)
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19 July 2024 Sir some are saying P1109 and some are saying P1104.. I'm really confused.. I file gst return with LUT for 0 rate.. If I select either of the two then can it create any issue in future by GST authorities regarding wrong purpose code selection for FIRC and will i be demanded tax instead of the 0 rate that i claimed?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 July 2024 GST department works as per GST act & rules, not as per rules drafted by google/Paypal. GST rules are applicable over HSN codes.
So, even if I confirm you any thing, you will not be satisfied over it, so better get it confirmed from your GST Officer.