Latest News on Paypal India - Bank Withdrawals & Non Personal Transactions Resumed

Finally, there is some news for Indian Paypal users to cheer about. The bank withdrawal facility which was suspended for over a month will be resumed from March 3. Also, exporters in India can receive payments through Paypal. However, personal payments are still blocked due to regulations of RBI (India's Central Bank).

The latest post on thepaypalblog gives detailed instructions about the changes they have incorporated in the process to adhere to the guidelines of RBI. The main change being the introduction of purpose code which is required to be entered by the user before submitting the request for bank withdrawal. The purpose code is basically a five digit alphanumeric code assigned to different purposes for which the payment would have been received. This is different from the Importer Exporter Code allotted by the Indian Govt. to various exporters and importers.

This would help the legal system to keep track of the purposes for which payments from abroad are being received thereby checking international money laundering. Following is the list of various purpose codes applicable to different users:

Code	Category	Description	Who should be using it
P0101 / P0104	Export of Goods	Value of export bills negotiated / purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.)	eBay merchants, jewelers, sellers of collectibles and other such products through eBay and your own websites / catalogues globally. Please note: Cross border shipment of goods and services for which you file GR / PP / SOFTEX / EC forms only should be processed with this code. Use P101 if Deutsche Bank is your banker and P0104 if you bank with any other bank If you have any questions, please check with your bank to help you with the same.
P0301	Travel , Hospitality and Tours	Purchases towards travel (Includes purchases of foreign TCs, currency notes etc over the counter, by hotels, hospitals, Emporiums, Educational institutions etc. as well as amount received by TT/SWIFT transfers or debit to Non-Resident account).	Online Travel Agents, Airlines, Railways, Buses, Taxicab Services, Hotels, B&Bs and other travel / tourism related sales through PayPal
P0801 P0802 P0803	Information Technology	Computer Information Services. Hardware / Software / Data Processing consultancy/implementation	If you are an independent / freelance coder / hardware consultant or data processing service provider, or a small business providing such services for websites globally, please use these codes. For all IT related consulting services where you know you do not need to file a SOFTEX form, please use the appropriate code. 801 for hardware consulting, 802 for software consulting and 803 for data management and processing consulting services
P0805 P0806	Content and Journalism	News Agency and Subscription services	If you are a freelance journalist / blogger / news aggregator please use this purpose code for withdrawals. If you are a newspaper or an online news aggregator for websites overseas, please use the appropriate code from these two. 805 if you a freelance journalist, and 806 if you are a newspaper / aggregator
P0902	Licensing of creative works	Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films)	Artists, designers, other creative service providers where the principal revenue mode is license fees, please use this code. If you produce creative works which you license out for entities overseas, licensing revenues may be classified under this purpose code
P1004	Other services	Legal Services	If you are providing outsourced law related services
P1005		Accounting, auditing, book keeping and tax consulting services	For accounting consulting and accounting services
P1006		Business and management consultancy and public relations services	Management / brand consulting and management services can be exported with this purpose code
P1007		Advertising, trade fair, market research and public opinion polling services	Marketing/ brand consulting / logo design / event management services can be exported with this purpose code
P1008		Research & Development services	If you are an outsourced research and development services provider based in India, receipts can be inwarded through this purpose code
P1009		Architectural, engineering and other technical services	Any other technical services such as eTutoring, education and other services you render over the internet via web conferencing tools or similar channels, please use this code for your withdrawals

Cost Inflation Index for F.Y. 2009-10

The Government of India has notified the Cost Inflation Index (CII) for the financial year 2009-10 to be 632.The index for the last year was 582.
This concept was started from Financial Year 1981-82 whose index is kept as 100 (base year). From then the Govt. has been continuously notifying the CII for each year based on the level of inflation. This is mainly used for income tax purposes for calculating the value of long term capital gains. The gain/loss on sale of asset is calculated by subtracting from the sale value, the indexed cost of the asset, which is calculated as:

Original Cost of the Asset x Current year CII /CII in the year of purchase

However this index also shows the impact of rising prices. Last year the inflation index rose by 31 points from its previous year. This year the index rose by 50 points from its last year value of 582. Thats quite a substantial margin.

Latest Update on Paypal India Situation

This time it is Farhad Irani - Head in Asia Pacific region. He ensures to resume bank withdrawal facility soon. However, the good news is that funds can be withdrawn through cheque or to a credit card.

This is what the whole blog post from Farhad on thepaypalblog reads:
An Open Letter from Farhad Irani on the Situation in India
Hi. My name is Farhad Irani and I lead the PayPal business in Asia Pacific. As the leader of PayPal’s business in the region and as a fellow Indian, I want you to know that we are sparing no effort in ensuring that the present day inconvenience in not being able to process the bank withdrawal functionality in India for sellers is quickly and completely addressed. This is the single most important item for me and my management team. My sincere apologies for the inconvenience you must be facing.
I’d like to let everyone know that I’m personally committed to working closely and tirelessly with the Reserve Bank of India to get a fast resolution to this issue, so that we can continue to help the thousands of Indian businesses who use PayPal to sell their goods or services in the global marketplace. India is a very special market for me and your continued success is very precious to us.
We were hoping that our merchant customers would be able to start withdrawing their funds at their local bank by today, but it looks like this will still take some more time. I understand your frustration and want to let you know that we are doing everything we can to free your funds.
It has always been possible for sellers to request a check or withdraw funds to a credit card, and these options are still available from the Withdraw Money tab of your PayPal account. If you don’t have a credit card attached to your PayPal account now, you can add one under the Profile section of your PayPal account. Before asking for a credit card withdrawal, please check with your card issuing bank to ensure that they can process it.
It usually takes five to seven working days for you to receive a check when you request a check withdrawal and PayPal normally charges a five USD fee. We are trying our best to help sellers during this difficult time and therefore will refund the check withdrawal fee back to your PayPal account within a week. I appreciate that this is not ideal, but please bear with us.
I’d like to let you know that I’m listening to your concerns. This is my direct PayPal email address: Farhad@paypal.com. Feel free to send me an email.
Farhad

Paypal Restores Transaction Failure Fees on Failed Withdrawals in India

Latest news on Paypal India. Recentely, one of my associates checked his Paypal account and found that it has restored the transaction failure fee which was charged when the attempt to withdraw money to local bank account in India was cancelled.

All this has been done after Reserve Bank of India (India's Central Bank) raised questions as to whether Paypal complies with its laws on cross border payments. The suspension of services was meant only for personal payments, however payments against services have also been stopped. Moreover, Paypal has also suspended withdrawal of money to local bank accounts.

Anuj from Paypal's communication team wrote on thepaypalblog that the suspension could last a few months. However, withdrawals to local banks would start in a few days.