KPO and research firms that send reports, models and analyst hours to foreign clients file a monthly EDF with their AD bank, listing every export invoice of the month as a row in Part 2B. For most of these firms the decisions that matter are the SAC code and description for each type of work, and keeping FTE invoices and project invoices clearly separated, because that is where banks and auditors look first. Delivery is almost always online, so mode of delivery is "Internet".
Key takeaways
- One EDF per month to your AD bank, due within 30 days from the end of the invoice month. SEZ units file with the Development Commissioner.
- Mode of delivery: Internet. Mode of realisation: usually Others.
- SAC codes depend on the actual work: market research, management consulting or research and development each point to different codes. Confirm with your CA.
- Purpose codes on inward remittances vary too, for example P1007 for market research or P1008 for R&D services. Confirm with your bank.
- Dedicated-team (FTE) billing and project billing both work on the EDF. Describe each row precisely.
What counts as KPO for the EDF
"Knowledge process outsourcing" covers a wide spread: equity and credit research for investment firms, market sizing for consultancies, competitive intelligence, patent landscaping, financial modelling, healthcare analytics, survey programming and analysis, and secondary research desks. For FEMA purposes the label does not matter. What matters is that you supply services from India to recipients abroad and get paid for them.
If your firm is a proprietorship, partnership, LLP or company, assume the EDF applies. RBI said on 7 October 2026 that individuals providing services abroad are not required to report and that FAQs would follow, but the text of the Regulations has not changed yet. Business entities should keep filing.
Matching codes to the work
KPO firms often do two or three different kinds of work for the same client. Use the code that fits each invoice rather than one code for everything.
| Type of work | Possible SAC (confirm with CA) | Possible purpose code (confirm with bank) |
|---|---|---|
| Market research, surveys, consumer insight | 998371 market research | P1007 advertising, trade fair, market research |
| Business research and advisory, strategy support | 998311 management consulting | P1006 business and management consultancy |
| Scientific or technical research for clients | Ask your CA; R&D services have their own codes | P1008 research and development services |
| Financial analysis, bookkeeping-style work | 998222 accounting and bookkeeping (where it fits) | P1005 accounting, auditing, tax consulting |
| Data processing or analytics platforms | 998313 / 998319 IT services (where it fits) | P0802 or P0807 for software-type work |
These are starting points, not answers. The SAC code finder and purpose code finder help narrow the choice, and your CA and bank have the final word.
Billing patterns and how they look in Part 2B
Dedicated analyst teams (FTE). A monthly invoice for, say, six analysts at an agreed rate. One invoice, one row. In the description, say what the team does: "Equity research support, 6 FTE, January 2027".
Project or report billing. A fixed fee per report or deliverable, often split into milestones such as 40% on kick-off and 60% on delivery. Each milestone invoice is its own row in the month it is raised.
Hourly or call-based billing. Expert-network style work or ad-hoc research billed on hours. Consolidate into one monthly invoice per client where the contract allows; it keeps the EDF short.
Subscription research. A client pays a quarterly fee for access to research outputs. Each quarterly invoice is a row in its month.
Worked example: a mixed month
Vantage Insight Research Pvt Ltd, Gurugram, raised four invoices in January 2027:
| Sr. | Recipient | Country | Invoice | Currency | Amount | Description | SAC |
|---|---|---|---|---|---|---|---|
| 1 | Hollis Capital LLC | USA | VIR/2027/011 | USD | 21,600 | Equity research support, 6 FTE, Jan 2027 | Confirm with CA |
| 2 | Calder Pharma Ltd | UK | VIR/2027/014 | GBP | 7,500 | Market assessment report, milestone 1 of 2 | 998371 |
| 3 | Brightline Strategy GmbH | Germany | VIR/2027/019 | EUR | 4,200 | Competitive intelligence, 70 analyst hours | 998311 |
| 4 | Hollis Capital LLC | USA | VIR/2027/023 | USD | 3,000 | Ad-hoc sector deep dive | Confirm with CA |
Points worth noticing:
- Hollis Capital gets two rows because there are two invoices. The EDF lists invoices, not clients.
- The total value in rupees (field 1.22) is the sum of all four converted at a consistent rate, written in figures and words.
- January 2027 invoices are due by 2 March 2027, because February has 28 days.
- Contract references go in the contract column: the master services agreement for Hollis, the statement of work for Calder.
Realisation: where research firms get caught
Research clients, especially large consultancies and banks, often run long procurement cycles. Payment terms of 60 or 90 days are common, and invoices sometimes sit in a client's approval workflow for weeks. The 9-month realisation window from each invoice date gives room, but it is not infinite.
A simple habit helps: every month, sort your open invoices by age. Anything older than six months gets a call to the client and, if needed, an extension request to your bank before the 9 months run out. Our guide on protecting your 9-month window has a follow-up routine.
For smaller invoices up to ₹10 lakh, the bank may close the EDPMS entry on your periodic declaration that the money has been realised, which cuts paperwork for research desks billing many modest amounts. Use our realisation declaration format.
GST and LUT
Research and KPO services supplied to clients abroad are generally exports of services when the five conditions in Section 2(6) of the IGST Act are met, which makes them zero-rated. Most firms export under LUT (Form GST RFD-11) and print "Supply meant for export under LUT without payment of IGST" on each invoice.
One caution: if your firm earns a commission for connecting a foreign client with experts or third-party data providers, rather than doing the research itself, that may look like an intermediary service, which generally does not qualify as an export. Discuss such models with your CA. The EDF is a FEMA declaration and does not change your GST or income-tax position. This is general information, not legal or tax advice.
Frequently asked questions
Do KPO firms need to file the EDF every month?
If you raised export invoices in a month, yes. One EDF can cover all of that month's service exports to one or more clients, due within 30 days from the end of the month. Months without export invoices have nothing to declare.
What SAC code should a research firm use on the EDF?
It depends on the work. Market research often falls under 998371, management consulting under 998311, and research and development services under separate codes. Use the code that describes each invoice and confirm it with your CA.
Which purpose code applies to KPO receipts?
Common options include P1007 for market research, P1006 for business and management consultancy and P1008 for research and development services. The right code depends on the service, so confirm it with your AD bank when the remittance arrives.
How do I show FTE-based billing on the EDF?
Each monthly FTE invoice is one row in Part 2B. Describe the team and the period clearly, for example "Credit research support, 4 FTE, March 2027", and give the master agreement as the contract reference.
Our client pays after 120 days. Is that a problem?
Not by itself. Full value must be realised within 9 months from the invoice date. Track each invoice's age and, if a payment will go beyond 9 months, request an extension from your AD bank with reasons before the deadline.
Bottom line
For KPO and research firms, the EDF rewards precise descriptions and the right code per invoice type. Get those right once, and the monthly filing is quick. Build your next declaration with the free EDF form generator, adding one Part 2B row per invoice.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.