In today’s era, software exports have become one of India’s most important contributors to foreign exchange earnings. With thousands of IT and software companies providing services to global clients, the Reserve Bank of India (RBI) has put certain regulations in place to monitor and manage the flow of foreign currency.
One such regulatory requirement is the Softex Form, which plays an important role for companies exporting software and IT services from India. The Softex procedure ensures that all the export transactions related to software services are properly accounted for, and the associated foreign earnings are duly reported.
What is Softex Form in India?
The SOFTEX Form is a regulatory requirement that needs to be complied with by exporters of software and IT services in India with the Reserve Bank of India (RBI) through authorized officials at Software Technology Parks of India (STPI) or SEZ Development Commissioners.
It serves two purposes:
- To track the export of software services or products made during the period.
- Reconciliation of foreign exchange earned & realized on the provision of the software services.
As per regulatory guidelines:
" Software" means any computer program, database, drawing, design, audio/video signals, or any information by whatever name called in or on any medium other than in or on any physical medium.
This broad definition includes a wide range of intangible digital exports, such as:
- SaaS subscriptions.
- IT consulting services.
- Custom software development.
- API access and usage.
- Cloud-hosted solutions.
- BPO/KPO units.
Other Software services not included above
STPI Registration Process:
1. STP Unit Registration (for Export Incentives & Benefits)
Who should opt for this?
- Companies intending to operate as a 100% Export Oriented Unit (EOU).
- Those seeking benefits under the STP Scheme (e.g., duty-free imports, simplified compliance, GST refunds).
Features:
- Eligible for STP scheme benefits.
- Physical space must be approved by STPI.
- SOFTEX forms must be filed through STPI.
Benefits of STPI Registration:
- Exemption from import and customs duties.
- Eligibility to receive 100% Foreign Direct Investment (FDI) under the automatic route.
- Access to various income tax exemptions and government incentive schemes.
2. Non-STP (STPI) Unit Registration (for SOFTEX Compliance Only)
Who should opt for this?
- Companies not availing of STP Scheme benefits, but still required to file SOFTEX forms due to export of software/services.
Features:
- No STP scheme benefits.
- Registration is only for SOFTEX certification.
- Filing of SOFTEX is still mandatory for all software exports.
Benefits of Non-STPI Registration:
- Ability to claim benefits related to software exports.
- Access to government incentives offered for software export activities.
- Ensures compliance with applicable legal and regulatory requirements.
Softex Filing Procedure and Timeline:
As per the Softex filing procedure, exporters must submit the forms within 30 days of the date of the invoice to STPI or SEZ authorities. Once the forms are certified, it is used to report and reconcile FEMA earnings with RBI records.
Repatriation of export proceeds:
The full value of export proceeds of software must be realized and repatriated to India within nine months from the date of export/invoice.
Conclusion:
For any Indian business engaged with Software or IT services navigating the Softex compliance process is very crucial. Whether you are a custom software developer or an IT consulting firm adhering to the Softex filing procedure helps smooth remittance of foreign earnings and avoid hurdles.
At KDP Accountants, we specialize in helping IT and Software service exporters meet their regulatory requirements and FEMA compliance requirements without any regulatory hurdles. If you’re unsure about how Softex filing works reach out to us at enquire@kdpaccountants.com , Our team of experts assists with Softex filing, STPI registration, and end-to-end cross-border transaction advisory services.
