Mapping of Services Accounting Codes (SAC) and Introduction of Foreign Currency Expense Reporting for IFSC Units under SERF and MPR

INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY (IFSCA) CONSULTATION PAPER Mapping of Services Accounting Codes (SAC) and Introduction of Foreign Currency Expense Reporting for IFSC Units under SERF and MPR April 08 - 29, 2026 www.ifsca.gov.inInternational Financial Services Centres Authority (IFSCA) Consultation Paper on Mapping of Services Accounting Codes (SAC) and Introduction of Foreign Currency Expense Reporting for IFSC Units under SERF and MPR 1. Preface 1.1 The International Financial Services Centres Authority (IFSCA) proposes to introduce a standardised approach for capturing value creation in foreign currency from and within the International Financial Services Centre (IFSC) ecosystem. 1.2 This exercise requires standardisation in foreign currency revenue reporting in the Service Exports Reporting Form (SERF) and introduction of foreign currency expense reporting in the Monthly Performance Report (MPR) through the SEZ Online system. 1.3 The IFSC units undertake a wide range of financial service activities, including banking, capital markets, fund management, insurance, financial leasing, bullion, TechFin and ancillary services. Accurate, consistent, and transparent reporting of such services, including appropriate service classification and relevant financial data, is important to ensure the reliability, comparability, and analytical usefulness of the reported information. 1.4 Based on supervisory experience, internal research studies and review of previous SERF & MPR filings, IFSCA has observed differences in service classification practices and in the scope of information reported across IFSC units and sectors. Such differences, including the absence of systematic foreign currency expense reporting, limit consistency, comparability, and analytical usefulness of data, including for estimation of value creation from the IFSC at sectoral and system-wide levels. 1.5 This Consultation Paper, therefore, sets out IFSCA’s proposals to strengthen and standardise the SEZ reporting framework for IFSC units under SERF and the related MPR framework. The proposals cover: (a) standardisation of Service Accounting Codes (SAC) for IFSC units for capturing revenue at the invoice level in SERF; and (b) introduction of a foreign currency expense reporting field in the MPR Form to capture aggregate expenses incurred in foreign currency during the month. 1.6 This exercise will enable the IFSCA to estimate the IFSC’s net foreign-currency value creation. 1.7 The proposals are intended to enhance clarity, reduce ambiguity, and facilitate consistent, accurate, and analytically useful reporting, including for sector-wise and system-wide assessment of services activity and value creation within the IFSC ecosystem. 1.8 IFSCA therefore invites comments from the IFSC units and other stakeholders on the proposal outlined in this paper. IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 1 of 122. Background and Rationale 2.1 The services rendered from the Special Economic Zones (SEZs), including IFSC, are reported through the Service Exports Reporting Form (SERF) on the SEZ Online system (copies of SERF Formats are attached at Annexure A for reference). SERF requires the SEZ units to classify revenue from services using Service Accounting Codes (SAC) notified under the Goods and Services Tax (GST) framework1. 2.2 The IFSC units employ diverse business models and revenue structures, including fee-based, commission-based and margin-based income streams. In the absence of a standardised classification framework aligned to IFSC activities, similar services may be reported under different SAC codes by different units. 2.3 IFSCA’s review of SERF filings has indicated instances of: (a) inconsistent use of SAC codes for similar financial services; (b) use of broad or residual SAC codes for multiple service types; and (c) reporting that does not clearly reflect the nature of the underlying service income. 2.4 Such inconsistencies may affect data quality, comparability, and ease of regulatory and policy analysis. In addition, the absence of consistent expense-side information limits the ability to assess net foreign currency value generated from services provided from and within the IFSC. 2.5 Recent Enhancement2 in SERF Format: As part of ongoing efforts to improve the granularity and relevance of service export reporting, the SEZ Online system, managed by National Depository Management Limited (NDML), has recently introduced enhancements to the SERF, based on requirements specified by IFSCA. Under the earlier SERF framework (Version 4), service exports were captured under four broad categories, primarily oriented towards software and IT-enabled services. In order to address the specific operational requirements of IFSC units, particularly in the context of service flows within the IFSC ecosystem and between IFSC, SEZ, and Domestic Tariff Area (DTA) units, the SERF format has been updated to include additional service categories. Accordingly, the following three categories have been introduced: • IFSC Service Exports Outside India • Service Exports to Other IFSC / SEZ Units • Service Exports by IFSC / SEZ Units to DTA Units With this enhancement, the SERF framework now enables classification of service transactions based not only on the nature of services but also on the destination of such services. This is expected to improve the granularity of reporting and provide better visibility into intra-IFSC, inter-SEZ, and domestic service linkages. Further, a transition mechanism has been provided by NDML wherein both the existing and updated SERF formats are being supported for a limited period, after which the updated format is expected to be fully adopted. 1 https://cbic-gst.gov.in/pdf/Classification%20Scheme%20for%20Services%20under%20GST.xlsx 2 https://sezonline-ndml.co.in/User/Release_Note_v3.0_Users.pdf IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 2 of 123. Objective and Scope of the Proposal 3.1 The objectives of this Consultation Paper are: (a) To establish a consistent approach for classification and reporting of revenues from financial services by IFSC units under SERF; (b) To introduce a mechanism for capturing foreign currency expense data in the MPR form; (c) To enable estimation of value creation in foreign currency (FC) from and within the IFSC by netting gross foreign currency revenue and gross foreign currency expenses. 3.2 The scope is limited to the proposals set out in Section 1.5 above, applicable to IFSC units reporting under SERF and related reporting. 3.3 This Consultation Paper does not propose: (a) creation of new SAC codes; (b) changes to tax treatment or regulatory obligations; or (c) any determination of liability or incentives. 4. Proposed SAC Code Framework 4.1 IFSCA proposes to prescribe a sector-wise list of recommended SAC codes, mapping them against corresponding financial services and income streams typically generated by the IFSC units. 4.2 The proposed framework has been developed based on: (a) review of existing SAC classifications; (b) analysis of IFSC business models and revenue streams; and (c) stakeholder interactions and supervisory experience. 4.3 The guiding principles underlying the proposed framework are: (a) classification based on the nature of the service provided and income earned, rather than underlying asset values or balances; (b) use of existing SAC codes notified under the GST framework; (c) consistent treatment of similar services across entities and sectors; and (d) facilitation of aggregation and analysis at sectoral and system-wide levels. 4.4 The proposed sector-wise indicative list of SAC codes relevant to the IFSC ecosystem is provided in Annexure C to this Consultation Paper. 4.5 In this context, IFSCA may issue such guidance or directions, as considered necessary, on: (a) scope of revenues to be reported; and (b) reporting principles for consistency. IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 3 of 125. Proposal on Capture of Expense Data for Net Export Estimation 5.1 IFSCA also proposes to introduce reporting of aggregate monthly expenses incurred in permitted foreign currencies for the purpose of estimating the value generated from and within the IFSC. 5.2 Currently, SERF captures gross revenues from services, but does not capture monthly expenses incurred, limiting the ability to estimate net foreign-currency value generated from services provided from and within the IFSC. 5.3 It is therefore proposed that the Monthly Performance Report (MPR) format be updated to include a separate field titled: “Expenses (paid in foreign currencies, converted into USD)” Note: The indicative list of possible expenses in foreign currencies for IFSC units is attached at Annexure B. 5.4 In this context, IFSCA may issue such guidance or directions, as considered necessary, on: (a) scope of expenses to be reported; (b) conversion methodology; and (c) reporting principles for consistency. 5.5 The net foreign-currency value creation (FCVC), from services provided from and within the IFSC may be derived, for statistical and analytical purposes, as the difference between gross foreign currency receipts (FCGR) and total foreign currency expenses (FCEXP), as follows: FCVC = FCGR – FCEXP Where, FCGR = Gross Revenues in Foreign Currencies (reported under SERF, before deduction of expenses). FCEXP = Expenses in Foreign Currencies (on an aggregate monthly basis, to be reported under MPR). 6. Applicability and Implementation 6.1 Subject to finalisation after the consultation process, the proposals relating to standardisation of revenues with SAC codes and capture of expenses for net value estimation, would be applicable to IFSC units for reporting and analytical purposes under the SERF and MPR reporting frameworks. 6.2 IFSCA recognises that IFSC units vary in size, complexity and business models. Accordingly, the proposed framework is intended to provide a clear reference for classification, while allowing proportionate application based on the nature of services provided. 6.3 IFSCA may issue clarifications or guidance notes, as appropriate, to address sector-specific or service-specific classification issues that may arise during implementation. IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 4 of 127. List of Consultation Questions On Revenues: Question 1: Whether the proposed mapping (refer Section 4) of sector-wise SAC code framework appropriately captures the nature and scope of financial services provided by IFSC units. Question 2: Whether there are any financial services commonly provided from or within the IFSC that are not adequately covered under the proposed SAC code mapping framework (refer Annexure C). Question 3: Whether the recommended SAC codes are operationally practical and suitable for reporting under SERF. On Expenses: Question 4: Whether the proposed approach for capturing foreign currency expenses in the MPR Form (refer Section 5) is appropriate for estimation of net foreign currency value creation from the IFSC. Question 5: Any suggestions on major categories or types of foreign currency expenses (refer Annexure B) that may be relevant for inclusion for the purpose of value-creation estimation. Question 6: Any operational or implementation issues that IFSC units may foresee in reporting foreign-currency expense data under the proposed framework. 8. Submission of Comments 8.1 The IFSC units and other stakeholders are invited to submit their comments on this Consultation Paper by April 29, 2026. 8.2 Comments may be submitted in MS Word or MS Excel format only, using the structured format provided in Section 9 of this Consultation Paper. 8.3 Comments should be sent by email with the subject “Consultation Paper (SERF & MPR)” to dept-epa@ifsca.gov.in, with a copy to Mr. Jayanta Devnath, Manager at j.devnath@ifsca.gov.in, and Ms. Udisha Sharma, Young Professional at sharma.udisha@govcontractor.in on or before the date specified in Section 8.1 of this Consultation Paper. 8.4 Unless confidentiality is specifically requested, comments received may be placed in the public domain. IFSCA reserves the right not to publish submissions where it considers publication not to be in public interest. IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 5 of 129. Format for Submission of Comments Details of the Person / Entity Organisation Name (if applicable): _________________________ Name of Person/ Representative: _________________________ Contact Number: _________________________ Email Address: _________________________ Structured Response Format S. No. Consultation Question No. Comments / Detailed Other Supporting (As per Section 7 of this Suggestions Rationale Information Consultation Paper) Disclaimer: This Consultation Paper is issued for the purpose of seeking public comments and does not constitute a regulation, circular or direction of the Authority. *** IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 6 of 12Annexure A Annexure A – SERF Format SERF Format (Version 4.0) https://www.sezonline-ndml.com/doc/SERF-Item-Details-Upload- Template-Version-4.xlsm SERF Format (Version 5.0) https://www.sezonline-ndml.com/doc/SERF-Item-Details-Upload- Template-Version-5.xlsm IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 7 of 12Annexure B Annexure B – Indicative List of Expenses in Foreign Currency for IFSC Units Sector Category Type of expenses IFSC Common to all types 1. Fees paid to regulator (application fees, renewal of IFSC units fees, KMP change etc.) Banking IFSC Banking 1. Interest expense Unit (IBU) 2. SLA payments in foreign currency to Head Office 3. Subscription charges for Forex dealings, money market operations, broker subscriptions, etc. 4. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) 5. Software license fee 6. Any other Forex charges incurred Global 1. Expenses incurred on Third Party Service Administrative Office Providers (including legal, consultancy, audit etc.) (GAO) 2. Software license fee 3. Any other Forex charges incurred Payment Payment Service 1. Expenses incurred on Third Party Service Services Provider (PSP) Providers (including legal, consultancy, audit etc.) Payment Service 2. Software license fee Operator (PSO) 3. Any other Forex charges incurred. Finance Aircraft Leasing 1. Interest expense Company (AL) Entities 2. Lease Payments (FC) Ship Leasing (SL) 3. Foreign Exchange Expense Entities 4. Amortization of capital expenditure (For FCs purchasing assets (helicopter) and showing on the Balance Sheet) 5. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) 6. Software license fee 7. A ny other Forex charges incurred ITFS Platforms 1. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) 2. Software license fee 3. Any other Forex charges incurred FC – Core (including 1. Interest expense GRCTCs) 2. Foreign Exchange Expense FC – Non-Core 3. Expenses incurred on Third Party Service (other than AL, SL, Providers (including legal, consultancy, audit etc.) ITFS) 4. Software license fee 5. Any other Forex charges incurred Capital MII Market Broker Dealer 1. Interest expense Clearing Member 2. Bank charges in USD Depository 3. Various fees and charges to MIIs Participant 4. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 8 of 125. Software license fee 6. Any other Forex charges incurred Registered 1. Interest expense Distributor 2. Bank charges may be in USD Investment Adviser 3. Expenses incurred on Third Party Service Custodian Providers (including legal, consultancy, audit etc.) Debenture Trustee 4. Software license fee Credit Rating 5. Any other Forex charges incurred Agency Investment Banker Fund Management 1. Fund administrator cost Entity (FME) 2. Expenses incurred on Third Party Service AIFs/ Schemes Providers (including legal, consultancy, audit etc.) 3. Software license fee 4. Any other Forex charges incurred Insurance Insurance Entities 1. Re-insurance premium paid (IIOs) 2. Commission paid 3. Brokerage paid 4. Bank charges 5. Risk management charges 6. Survey fee paid 7. Claim paid 8. TPA Fee paid 9. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) 10. Software license fee 11. Any other Forex charges incurred Reinsurance Entities 1. Re-insurance premium paid (IIOs) 2. Bank charges paid 3. Surveyor and Loss Assessor fee paid 4. Brokerage paid 5. Claim paid 6. Survey fee paid 7. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) 8. Software license fee 9. Any other Forex charges incurred Insurance 1. Risk management fee paid Intermediaries 2. Bank charges paid (IIIOs) 3. Premium paid 4. Claims paid 5. Co-brokerage paid 6. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) 7. Software license fee 8. Any other Forex charges incurred BATF Service 1. Expenses incurred on Third Party Service Providers Providers (including legal, consultancy, audit etc.) IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 9 of 12Financial TechFin and 2. Software license fee Support Ancillary Services 3. Any other Forex charges incurred Services Providers Global In-House Centre Metals and MII 1. Interest expense Commodities 2. Bank charges may be in USD 3. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) 4. Software license fee 5. Any other Forex charges incurred Bullion 1. Interest expense Intermediaries 2. Bank charges may be in USD Vault 3. Various fees and charges to MIIs. 4. Expenses incurred on Third Party Service Providers (including legal, consultancy, audit etc.) 5. Software license fee 6. Any other Forex charges incurred FinTech Sandbox (Limited 1. Expenses incurred on Third Party Service Use Authorization) Providers (including legal, consultancy, audit etc.) 2. Software license fee 3. Any other Forex charges incurred Foreign International Branch 1. Expenses incurred on Third Party Service University Campus Providers (including legal, consultancy, audit etc.) 2. Software license fee 3. Any other Forex charges incurred IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 10 of 12Annexure C Annexure C – Indicative List of SAC Codes for IFSC units Sector Group/ Service Description Service Code Banking 997119 Other financial services (except investment banking, insurance services and pension services) [includes interest income] 997113 Credit-granting services including stand-by commitment, guarantees & securities 997152 Brokerage and related securities and commodities services including commodity exchange services 997154 Trust and Custody services 997158 Financial transactions processing and clearing house services Capital Markets 996729 Other Storage and Warehousing Services 997119 Other financial services (except investment banking, insurance services and pension services) 997152 Brokerage and related securities and commodities services including commodity exchange services 997154 Trust and custody services 997158 Financial transactions processing and clearing house services 997159 Other services auxiliary to financial services Fund 997119 Other financial services (except investment banking, Management insurance services and pension services) Entities (FMEs) 997153 Portfolio management services except pension funds 997156 Financial consultancy services 997159 Other services auxiliary to financial services Ancillary 997119 Other financial services (except investment banking, Services insurance services and pension services) 997154 Trust and custody services 997159 Other services auxiliary to financial services 998212 Legal advisory and representation services concerning other fields of law. 998214 Legal documentation and certification services concerning other documents. 998216 Other legal services, n.e.c.3 998221 Financial auditing services 998222 Accounting and bookkeeping services 998231 Corporate Tax consulting and preparation services 998311 Management consulting and management services including financial, strategic, human resources, marketing, operations and supply chain management. Finance 996521 Coastal and transoceanic (overseas) water transport services Company of goods by refrigerator vessels, tankers, bulk cargo vessels, container ships, etc. 3 n.e.c. means not elsewhere classified. IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 11 of 12996602 Rental services of water vessels including passenger vessels, freight vessels etc. with or without operator 996603 Rental services of aircraft including passenger aircrafts, freight aircrafts etc. with or without operator 997119 Other financial services (except investment banking, insurance services and pension services) 997311 Leasing or rental services concerning transport equipments including containers, with or without operator 997319 Leasing or rental services concerning other machinery and equipments with or without operator 998399 Other professional, technical and business services n.e.c 999799 Other services, n.e.c. Fintech 997331 Licensing services for the right to use computer software and databases. 998313 Information technology (IT) consulting and support services 998315 Hosting and information technology (IT) infrastructure provisioning services 998316 IT infrastructure and network management services 998599 Other support services n.e.c. Insurance 997132 Life insurance services (excluding reinsurance services) 997133 Accident and health insurance services 997136 Freight insurance services & Travel insurance services 997141 Life reinsurance services 997142 Accident and health reinsurance services 997143 Motor vehicle reinsurance services 997144 Marine, aviation and other transport reinsurance services 997145 services 997146 Freight reinsurance services 997147 Other property reinsurance services 997149 Other non-life reinsurance services 997161 Insurance brokerage and agency services 997162 Insurance claims adjustment services 997163 Actuarial services 997164 Pension fund management services 997169 Other services auxiliary to insurance and pensions Metals and 996713 Clearing and forwarding services Commodities 996729 Other storage and warehousing services 997152 Brokerage and related securities and commodities services including commodity exchange services 997158 Financial transactions processing and clearing house services 997159 Other services auxiliary to financial services Foreign 999241 Higher education services, general University *** IFSCA CONSULTATION PAPER ON SAC CODES AND EXPENSES REPORTING Page 12 of 12