In India, export regulations require exporters to file documents that declare the value of goods when they leave the country, using the Export Declaration Form (formerly known as GR and PP forms). This process oversees and regulates foreign exchange transactions related to the export of physical goods.
Technology companies have been exporting services outside India. However, the Customs department faced challenges in evaluating software exports transmitted via data communication channels as they lacked a physical product. To address this issue, the Indian Ministry of Electronics and Information Technology (MeitY) introduced the concept of SOFTEX forms in 1991 and established the Software Technology Parks of India (STPI). STPI is the administrative authority for software export valuation and certification of SOFTEX forms.
What is a SOFTEX Form?
According to RBI regulations, any company engaged in IT or ITeS (Information Technology enabled Services) and exporting software over a digital platform must submit a SOFTEX form. IT encompasses a range of activities including software products and services, such as design, development, implementation, deployment, and maintenance. ITeS covers services supported by Information Technology, including BPO (Business Process Outsourcing), KPO (Knowledge Process Outsourcing), and data processing. Failing to report these exports and obtain SOFTEX certification can lead to penalties or violations.
This requirement also applies to firms that are not registered under the STP (Software Technology Parks) or SEZ (Special Economic Zones) schemes, also referred to as non-STP(NSTP) units.
The SOFTEX compliance have been recently introduced in India and not many companies are well-versed with the requirement and the compliance.
Lawnut has been offering comprehensive services and proactive solutions to companies that need to declare exports using the SOFTEX form. We act as the one-stop-shop for all compliance requirements related to STPI regulations for our clients. For recurring compliances, we follow an extensive checklist to ensure thorough review and submission of the applications. We also specialize in matters related to rectifications/cancellations and condonations of past incorrect applications.
Our services include:
1. STP/NSTP Registrations
Assisting into the submission of the application along with the supporting documents. A nominal fee is payable along with the application. Documents to be uploaded are enlisted below:
- Memorandum of Association / MOA
- Article of Association / AOA
- Import Export Code / IEC
- Permanent Account Number / PAN
- Lease Deed, GST certificate, Company Profile, Director Profile, etc.
2. Monthly Performance Report (MPR)/Quarterly Performance Report (QPR)
MPR tracks the export certification target of the STP/NSTP units on a monthly basis. It can be filed with zero export value unlike the SOFTEX application. Registered entities must report monthly investments, exports and changes in employment count.
3. SOFTEX Filings
- The procedure for filing the SOFTEX Form is divided into three main steps:
- Generation of SOFTEX Number
Generate SOFTEX Form under single/bulk category on the RBI website under ‘Foreign Exchange Management Act Forms’. Download the form for uploading on the STPI portal with the SOFTEX application. - Online Filing of SOFTEX Form
After generating the SOFTEX number, complete the online SOFTEX Form available on the STPI website. The form must be submitted within 30 days of the invoice date or from the date of the last invoice issued in the month. - Submission of SOFTEX Form for Certification
Download a copy of the completed SOFTEX Form. Digitally sign the downloaded form and submit it to the STPI officer for certification.
- Generation of SOFTEX Number
- STP and NSTP units are mandated to report the export invoices within 30 days from invoice date or last invoice of the month. Export certification should be accompanied with RBI letter and copy of the internet/datacom bill for the respective period.