Summary: Indian IT and IT-enabled services exporters must file Softex forms with the Reserve Bank of India (RBI) to report details of their software exports, ensuring compliance with the Foreign Exchange Management Act, 1999 (FEMA). This process is mandatory for all exporters, regardless of whether they are registered with the Software Technology Parks of India (STPI) or not. Exporters must file the forms, often on a monthly batch basis, within 30 days of the invoice date. The process involves registering with the STPI, preparing the form with details such as exporter information and export value, and submitting it for certification. After STPI approval, the form is submitted to the Authorized Dealer (AD) bank, which then forwards it to the RBI. Filing Softex forms is crucial for several reasons: it facilitates GST refund processing, enhances a company’s credibility, and helps avoid fines and penalties from the RBI for non-compliance. Non-filing can result in held remittances and issues with banks’ monitoring systems.
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Key points to be taken while filing Softex form
1. Periodicity: Softex form is required to be submitted within 30 days of invoice date, typically exporters submit them on a monthly batch basis.
2. Bulk Upload: To make the process more efficient, you can upload the details for multiple invoices in bulk rather than filling out individual forms. This feature is a great time-saver, especially for businesses with a high volume of transactions.
3. Requirement:Filing a Softex form is mandatory for IT service and software exporters in India. It’s a way for these companies to report their export details to the Reserve Bank of India (RBI). This process is essential for compliance with the Foreign Exchange Management Act (FEMA), 1999, which regulates foreign exchange transactions in India.
4. Softex number: RBI allots Softex number to the exporter once in a year. Exporters can use the allocated Softex number either for each invoice or for a group of invoices with same currency of a particular customer.
STPI registration
RBI Circulars states that any company engaged in exports of IT & IT enabled services have to submit Softex forms with Software Technology Park of India (STPI).Such units need to file the forms with Software Technology Park of India (STPI). Units situated in Domestic tariff Area ( DTA) will register themselves as Non-STPI & file Softex Forms.
It means every exporter of IT & IT enabled services has to file Softex forms whether STPI or Non-STPI with RBI
Details to be furnished in Softex form
1) Exporter Details : Name, address, IEC Code
2) Software details: Details of software exported
3) Invoice details: Value of Software exported
4) Declaration: That the export value is correct & in compliance with FEMA Act & rules.
Steps involved in filing of Softex form
1) Registration with STPI-First step is registration with STPI. Exporter must register with STPI to obtain necessary approvals. Units in DTA (Domestic Tariff Area) are treated as Non-STPI but still file Softex through STPI.
2) Preparation of Softex form- After registering with STPI, softex form should be prepared. It includes the details like nature of software exporter, value of export & name of importer etc.
3) Submission to STPI- Post preparations of Softex form, form must be submitted with STPI for approval. This submission is usually done every month.
4) Certification- STPI authority reviews the submitted forms & cerificates to check if the furnished details are true & correct.
5) Submission to AD Bank- After certification, Softex form should be submitted with AD Banker. The bank will then forward these forms to the RBI.
Why to file Softex form
1) GST Refund processing- Since Companies usually export 100% of IT services to the foreign companies. In such cases, input paid on purchases & services paid in India gets accumulated which cannot be adjust with Output liabilities as there are no output liabilities. In such cases, accumulated Input credit can be applied for refund. For GST refund, departments can ask for Softex filing to check the export of software. In such cases, GST refunds usually gets processed easily.
2) To remain Credible- By remaining compliant with Softex filing, exporters can enhance the credibility with financial institutions, investors & other stakeholders. Adherence to statutory obligations ensures compliance & transparency of exporters.
3) To remain compliant with FEMA & RBI rules- Non filing of Softex forms can lead to penalties & fines by RBI on Exporters. To remain compliant with FEMA laws, it is mandatory to file Softex forms on monthly basis.
Need to file Softex
This question usually arises whether every exporter is required to file Softex Form?
The answer is yes. As per RBI circular, all exporter who receive foreign remittances on account of export of IT services export mandatorily required to file Softex form. In case of software exports, Softex form is required to filed with the bank from where remittance is being which is the Authorised Dealer Banker of the Exporter.
Consequences on Non-filing Softex forms
- Non filing of Softex forms can lead to violation of FEM & RBI Rules which can lead to fines & penalties for the Company.
- Delay in realization reporting to RBI.
- Issues with Export Data Processing and Monitoring System (EDPMS) closure at banks.
- Banks may hold foreign remittances if Softex not submitted.
Hello, this is quite informative.
Just wanted to understand – there is a clarification on the RBI website which states this – SOFTEX is to be filed ONLY in case of export of Software not exported as goods and it does not include export of services using IT as a tool i.e. ITeS (IT enabled Services) (refer – https://rbi.org.in/scripts/edf_userdetails.aspx)
Does it mean export of ITeS no longer requires SOFTEX and thereby, no need to get a Non-STP registration?