In this article we will discuss all about what is softex form, requirements to fill softex form, procedures to obtain STPI registration, manner to file and process of approval softex form online and filling approved softex to AD i.e. remittee bank.
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1. what is softex form
Softex form are related to specifically export of software means any entity making export of software and software related service required to follow this procedure.
According to FEMA act also, in case of export of software, First entity has to generate softex number from RBI website https://rbi.org.in/scripts/EDF_UserDetails.aspx and after that entity has to submit filled softex application form to jurisdiction STPI and STPI will submit it to RBI, later on when payment realize, exporter will get BRC number with approved softex and bank sent payment confirmation to RBI this is the way an export cycle gets completed.
2. Requirements to fill softex form
As per the prevailing RBI Master Circular No. RBI/2013-14/14 dated 1st July 2013 (Para B 15), RBI Circular No.80 dated 15th February 2012 and RBI Circular No.43 dated 13th September 2013, any company who does IT/ITES exports through Data communication links needs to submit the Softex Form for certification.
For getting the Softex certification by STPI (which is the Designated Authority), the companies have to become STP members by either registering under STP scheme or as NON-STP unit with STPI. Nevertheless, the companies registered under STP scheme will have other benefits apart from getting their Software Exports certified.
Any entity making export of software and situated in SEZ/ STPI area or non STPI area have to get approved softex form and by doing this procedure RBI and govt. also estimate value of export of software by Indian companies and realization of foreign currency by that.
According to FEMA, export realization should be within 180 days from the date of export. And RBI may take action against any entity if export proceeds have not been received within stipulated time period.
Sometimes exporters made export and realize payment by third party platform like PayPal etc. and sometime bank also credit using purpose code ” export of services in which softex not required” in that cases we also have to submit softex and all procedure should be followed to avoid any legal consequences.
Because sometime RBI stops payment requiring information about Nature and source of foreign currency realization. And in that case entity has to comply with these all procedures
3. Procedures to obtain STPI registration
Getting register with STPI is an easy process. You have to visit website https://stpionline.stpi.in/unit/jindex.php and you can select relevant STPI office.
Following documents required for registration with STPI
A) Company Profile with 5 year Projected financial statements.
B) Director’s profile.
C) Bank AD (Authorized dealer) code declaration.
D) Address Proof ( lease deed/rent agreement etc.)
E) Copy of MOA/AOA (if any)
F) Board resolution for reg. with STPI( in case of company)
G) IEC certificate.
H) Copies of agreement with customer located outside India.
Note:- each and every documents to be submitted with STPI should be signed and sealed (self-attested) .
Once you file online application form and made requisite payment (1000+GST for non STP unit) then registration certificate will be granted by STPI office and it is valid for 3 years from the date of issuance.
4. Manner to file application
After registration with STPI, entity has to make payment for annual charges according to its estimated turnover. As per below criteria:-
Table II
| Annual Service Charges for Non-STP Units : (Amount in Rs.) S/N Export Turnover for the year Annual Service Charges GST @ 18% Total amount To be paid P Q P+Q | ||
| 1 | Upto Rs.12.50 Lakhs 4,000 720 4720 | |
| 2 | Above Rs.12.50 Lakhs | Rs.25 Lakhs 8,000 1440 9440 |
| 3 | Above Rs.25 Lakhs | Rs.50 Lakhs 16,000 2880 18880 |
| 4 | Above Rs. 50 Lakhs | Rs. 3 Crore 55,000 9900 64900 |
| 5 | Above Rs. 3 Crore | Rs. 10 Crore 110,000 19800 129800 |
| 6 | Above Rs.10 Crore | Rs. 25 Crore 225,000 40500 265500 |
| 7 | Above Rs.25 Crore | Rs. 50 Crore 250,000 45000 295000 |
| 8 | Above Rs. 50 Crore | Rs. 100 Crore 350,000 63000 413000 |
| 9 | Above Rs. 100 Crore | Rs. 500 Crore 575,000 103500 678500 |
| 10 | Above 500 Crore | Rs. 1000 Crore 600,000 108000 708000 |
| 11 | Above Rs. 1000 Crore 650,000 117000 767000 | |
After payment entity will submit Payment receipt with “Form A” to STPI office and they will approve it.
Entity should also have to submit soft copy of Contracts with Parties on online portal and it will generate unique Contract number automatically later on these contract numbers will be part of Annexure-A.
After this we have to fill details of export invoices in Annexure-A and have to upload online with following documents:-
1. Copy of Signed and sealed invoices.
2. Contarct copy will appear automatically according to detail submitted in Annexure A
3. Copy of Softex number generated from RBI website.
4. Copy of internet bill in the name of entity.
5. Any other attachment in supporting to application.
After uploading all these documents application will get submitted and then we have to download submitted application and again have to upload digitally signed application online.
After this STPI will examine and if found all things in order then they will approve it and available for download.
A common monthly Softex in the form of Excel summary sheet as prescribed by RBI can be filed for all invoices raised in a month. The Softex is required to be filed within 30 days from the date of last invoice raised in that month.
5. filling approved softex to AD i.e. remittee bank
This approved softex form with copies of invoices to be filled with AD bank and after examining full realization of payment AD bank will issue BRC.
Author Bio
. We are exporting software services(i.e. IT Consultancy). Please clarify whether we have to settle our remittance under the Purpose Code P0807or P0802.
2. We are operating in the SEZ Unit, so we want to know whether Softex filing is mandatory or not for an SEZ Unit.
How to treat Credit note or Negative value in softex filing.
Note: Cannot reduce exact value of credit note against sales value, Since exchange variation is there.
Hi,
I’m a freelance software developer and I used to get paid by foreign clients for the past one and half years.
I took a GST registration before an year and registered an IEC code just before a month. So, if I want to register with STPI and generate SOFTEX, will I be able to file the past one and half years’ transactions under SOFTEX?
As I got an IEC just before a month, I’m not sure if my past transactions can be added to softex. Similarly, will there be any fine or penality for not taking softex for past transactions?
I get my payments via Upwork where they deduct a commission (say 10% & 1% TDS) for all my income. Does Softex has a way to record the commission details as I’ve heard that the remittance has to be fully paid against an export?
Thank you for your article as it solved many confusions!
Very insightful article!
I have a query?
Is there any limit above which this softex registration and compliances are required? Is it required for even proprietorships?
Hi! Very insightful article.
I have just one query. Can the whole process from becoming a member of STPI to filing the SOFTEX form be completed online? This is the first time we will be exporting software, and because of the covid-19, everyone is working remotely.
Yes the whole process can be done online. Certified copy of the softex can also be obtained online.
Hi! Very insightful article.
I have just one query. Can the whole process from becoming a member of STPI to filing the SOFTEX form be completed online? This is the first time we will be exporting software, and because of the covid-19, everyone is working remotely.
For completing the SOFTEX filing of previous dates which has exceeded the due date of 30 days, will there be any late fees or penalty.
No. If you have already registered with STPI office then you can apply in normal way.
Or if you are taking registration with STPI after making export then you have to submit condonation request.
Yes you can apply for condonation and if the department allows you can also file for the earlier months too
Very well covered. Articles are written for reading purposes. Consultation involves payment by readers.
Thanks for choosing a relevant topic.
Simply superb
Thanks for your words.
Hello Sir, I run a small software development business as a sole proprietor. I provide services to a couple of foreign clients only. I have not registered with any STP. Am I still required to submit the Softex forms?
Sir is there any other condition like using of server for the applicability of softex?