Purpose Code P1108 - Health service

The P1108 purpose code is for receiving payment from abroad for health services by Indian hospitals, doctors, nurses and paramedics, given remotely or on-site. Check when it applies, how it differs from medical travel, and the documents for this inward remittance.

Purpose code P1108 is used when an Indian hospital, doctor or other health professional receives money from abroad for health services. The P1108 purpose code covers teleconsultations, second opinions, remote reading of scans and reports, and care given on-site to patients or institutions abroad. The RBI description covers services by Indian hospitals, doctors, nurses, paramedical and similar staff, rendered remotely or on-site. It sits in the personal, cultural and recreational services group and is a current account receipt. The key test is where the patient is. If a patient travels to India for treatment, banks report it under the medical travel code P0304. If care is given to someone who stays abroad, use P1108.

This Purpose Code should be used only where the transaction fits its defined regulatory scope. Here's when you should and shouldn't use this code:

You should use this code when:

• Teleconsultation and second opinions - Fees from non-resident patients for online consultations with Indian doctors.
• Teleradiology and remote reporting - Fees from foreign hospitals for reading scans, X-rays or lab reports.
• Diagnostic and pathology services - Fees for testing samples sent by foreign hospitals or labs.
• On-site medical services abroad - Fees for Indian doctors or nurses who treat patients at a foreign facility.
• Remote care programmes - Fees for remote monitoring or follow-up care for patients overseas.

Do not use this code when:

• The patient travels to India and pays the hospital for treatment (use P0304 instead).
• You license medical software or health apps (use P0807 or P0802 instead).
• The payment is for clinical research or drug trials (use P1008 instead).
• You are paid to train foreign doctors or nurses (use P1107 instead).

RBI purpose codes are mandatory under FEMA to classify the nature of cross-border transactions entering or leaving India. They allow banks and regulators to accurately track foreign exchange flows and apply the correct regulatory, tax, and reporting treatment.

For individuals, businesses and institutions, correct purpose code usage:

• Ensures transactions are classified correctly under FEMA.
• Enables accurate reporting to the RBI and other regulators.
• Reduces delays caused by compliance checks or misclassification.
• Supports clean audit trails and tax reconciliation.

Bottom-line:

Using the correct purpose code helps ensure smooth processing, regulatory compliance, and faster credit of funds.

1. Select "P1108 – Health service" when the bank asks for the purpose of the inward remittance.
2. Upload the invoice and consultation record or service agreement with the foreign hospital.
3. Give a FEMA declaration on the nature of the health service, where asked.
4. The bank checks the documents, credits your account and issues an e-FIRA or FIRC.

Additional Notes:

• Share only the minimum patient data needed. An invoice and consultation date usually work.
• Hospitals with many foreign patients should keep travel and remote cases apart in their records.
• Keep the e-FIRA or FIRC for GST and income tax records.

• Using a generic or incorrect purpose code instead of the exact RBI-prescribed purpose code can lead to misclassification of the transaction under FEMA and trigger additional compliance checks by the bank.
• Mismatch between purpose code, invoice, and remittance narration may place the transaction on hold until clarification is provided.
• Submitting unclear or incomplete supporting documents that do not clearly describe the nature of the transaction often result in delays, as banks rely on documentation to validate FEMA compliance.
• Missing mandatory PAN or incomplete KYC documentation can prevent banks from releasing funds until verification is completed.
• Using service-related purpose codes for non-service transactions like capital receipts, investments, gifts, or refunds can result in incorrect regulatory treatment and potential reporting issues.
• Assuming small or recurring transactions do not require accuracy and repeated misclassification can attract regulatory scrutiny over time.

Cross-border payments require accurate purpose code selection and complete compliance documentation. Xflow helps businesses and individuals receive international payments while staying aligned with RBI and FEMA requirements.

With Xflow, you can:

• Select the correct purpose code with clarity
• Organize and maintain supporting documents
• Reduce compliance back-and-forth with banks
• Support FEMA compliant inward remittances