Physical exports of goods are well monitored by the customs authorities. They are exported from various ports sea, air or though post, where the value of the goods exported are assessed. Proper Documentation of such exports are done so that the proof of export and the value is determined. Remittance is also received based on this value of the exports.
There are numerous IT companies into software exports .They set up their units as per EOU /SEZ/STP schemes due to attractive schemes and benefits.
Such units will have to comply with the various procedures rules and regulation as specified under FEMA and Foreign trade Policy. Declaration of the value of the export are submitted through softex Invoices. Such Invoices are submitted to the authorized bank through which the RBI get the details of the exports.
There are some units set up in DTA. They are not regulated like the units set up under the EOU/SEZ/STP scheme. In such cases how can the export of software be monitored
The notification Notification No. FEMA 23(R)/2015-RB of FEMA
Export’ includes the taking or sending out of goods by land, sea or air, on consignment or by way of sale, lease, hire-purchase, or unstpinder any other arrangement by whatever name called, and in the case of software, also includes transmission through any electronic media .
WHAT CONSTITUTES EXPORT OF SOFTWARE
‘Software’ means any computer programme, database, drawing, design, audio/video signals, any information by whatever name called in or on any medium other than in or on any physical medium
Exporter of software has to be declare the value through softex.
The definition is exhaustive which includes IT services and also IT enabled services.
REGISTRATION AS NSTPI
For units established in DTA exporting software should register itself with the regional STPI for the purpose of declaring the exports. Such units will be registered as Non –STPI with the regional STPI. These Units get their invoice certified from the respective STP authority.
NEED FOR CERTIFICATION
Many a times this question is raised by the exporter of Software and software services- Why should we register? What will happen if we don’t register as NSTPI with STPI?
Agreed it is more of a procedural aspect with no benefits to the NSTPI units. However as per the prevailing RBI Master Circular No. RBI/2013-14/14 dated 1st July 2013, RBI Circular No.80 dated 15th February 2012 and RBI Circular No.43 dated 13th September 2013, any company that 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 the STP scheme or as NON-STP unit with STPI.
The bank would require the exporter to submit softex invoices in the absence of which the exports will not be considered as software exports instead as general services. The incorrect purpose of remittance will be submitted by the bank to RBI will lead to problems in the future. It is very important to classify the remittance from outside India under the correct purpose code by the bank. Hence filing of softex invoices becomes important.
The exports are Zero rated supply under GST and no IGST is charged after giving LUT/Bond .Refund can be claimed for the input and the inputs. In the absence the softex Invoices the processing for refund becomes little difficult.
RBI has details of all advance export remittances and the same is monitored by them. Customers who have not submitted the documents within the stipulated time may feature in the “caution list” circulated by RBI.
Hence to avoid such lapses it is recommended that the units which are into export of Software and located in DTA should register with the STPI as NSPI .
PROCEDURE FOR REGISTRATION
An application has to be made with the regional STPI unit in the prescribed format along with all the required documents. Details are available in the STPI portal. Application fees of 1000 +GST has to be paid. After processing the application, in case any further details are required it shall be provided to the STPI authority. Registration certificate will be issued. The whole process is online now.
Contract registration to be done in the Annexure V and the Annual charges depending on the turnover to be paid.
CERTIFICATION OF SOFTEX INVOICES
Once the registration certificate is issued, Softex invoices to be submitted to STPI for the certification
Softex number to be generated with the RBI from https://rbi.org.in
Documents to be uploaded for softex certification
1. Invoice
2. Copy of the contract
3. RBI softex number generated
4. Data com service provider
All the details to be filled and uploaded online. The softex application to be signed by the authorised signatory digitally. Upon verification of the details and the documents submitted STPI will approve the softex invoices. The certified Softex can be downloaded and a copy of it to be provided to the banker who will in turn provide the details to RBI.
For Further details and procedures you may contact rajeshwarisagar@yahoo.com
Author Bio
nice article, informative, thanks for sharing
Very Informative and well explained.