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Exporters — Tax, GST & FEMA

SOFTEX — Software Export Certification

SOFTEX Filing

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Overview

SOFTEX filing is the declaration of the software exports to the RBI under the Foreign Exchange Management Act 1999 — the filing of the SOFTEX form through the designated banks or the STPI for the export of the computer software and the IT services, with the invoice and the foreign exchange realisation details, within the prescribed period after the export. The SOFTEX is the software exporter's declaration to the RBI, and it is the record that ties the export, the invoice and the foreign exchange receipt together.

The software exports run through the SOFTEX filing — the form that declares the export of the software and the IT services, filed with the bank or the STPI with the invoice details, and the realisation of the foreign exchange within the prescribed period under the FEMA framework. The filing is the exporter's compliance with the export realisation discipline, and its records are what the banks, the RBI and the export incentives read.

The cost of a missed SOFTEX is the compliance gap: the export not declared, the realisation not tracked, the records that the audit and the regulators cannot find — each a gap in the software exporter's FEMA compliance.

This service is for software and IT services exporters. We manage the SOFTEX filings through the designated banks and the STPI, reconcile the filings with the invoices and the foreign exchange receipts, track the realisation within the prescribed periods, and maintain the export records so the software exporter's FEMA compliance is complete and current.

How It Works

  1. 1

    Export & Invoice Mapping

    We map the software exports and the invoices for the filing.

    Harun Raaj & Associates does this3-5 days
  2. 2

    SOFTEX Preparation

    We prepare the SOFTEX forms with the export details.

    Harun Raaj & Associates does this1 week
  3. 3

    Filing & Certification

    We file through the designated banks and the STPI.

    Harun Raaj & Associates does this1 week
  4. 4

    Realisation Tracking

    We track the foreign exchange realisation within the prescribed periods.

    Harun Raaj & Associates does thisOngoing
  5. 5

    Records & Compliance

    We maintain the export records for the audits and the incentives.

    Harun Raaj & Associates does thisOngoing

Frequently Asked Questions

What is a SOFTEX form and when must a software exporter file it?
SOFTEX (Software Exports) is a declaration form prescribed under Regulation 3 of the Foreign Exchange Management (Export of Goods and Services) Regulations 2015 read with RBI Master Direction on Export of Goods and Services (MD/12/2016-17 as updated). Software exporters, including those exporting software in non-physical form such as data transmission, online delivery, or through a dedicated communications network, must declare each export transaction by submitting Form SOFTEX to the authorised dealer bank within 30 days of the invoice date. STPI-registered units file SOFTEX through the STPI online portal and it is countersigned by the STPI/SEZ authority. Failure to file SOFTEX is a contravention under Section 10 of the Foreign Exchange Management Act 1999 and attracts penalty under Section 13.
What is the foreign exchange realisation period for software exports under FEMA?
Under Regulation 9 of the Foreign Exchange Management (Export of Goods and Services) Regulations 2015, the realisation period for software export proceeds is 15 months from the date of invoice, extended from the earlier 12-month period for the IT/ITeS sector to provide flexibility for long-term service contracts. If full realisation is not expected within 15 months due to the nature of the contract, the exporter may apply to the authorised dealer bank for an extension under Para C.10 of the RBI Master Direction on Export of Goods and Services. The realised export proceeds must be repatriated in full and credited to the exporter's Exchange Earners' Foreign Currency (EEFC) account or converted at prevailing rates. Non-realisation without RBI approval attracts penalties under Section 13 of FEMA 1999.
Are software exports zero-rated under GST and do exporters need to file a LUT?
Yes, export of software services (transmitted electronically or otherwise) qualifies as zero-rated supply under Section 16 of the Integrated Goods and Services Tax Act 2017, meaning GST is not charged on the export invoice. To export without payment of IGST and claim a refund of accumulated input tax credit, the exporter must furnish a Letter of Undertaking (LUT) in Form GST RFD-11 on the GST portal before the start of each financial year under Rule 96A of the CGST Rules 2017. If a LUT is not furnished, the exporter may export on payment of IGST and claim a refund under Rule 96 of the CGST Rules 2017. Refunds of ITC for zero-rated software exports are claimed in Form RFD-01 and must be filed within two years of the relevant date under Section 54 of the CGST Act 2017.
What is the role of STPI registration in the SOFTEX filing process for software exporters?
Software Technology Parks of India (STPI) registration is not mandatory for SOFTEX filing, but STPI-registered units benefit from single-window clearance, dedicated SOFTEX countersigning, and are treated as Export Oriented Units (EOUs) under Para 6.01(d) of the Foreign Trade Policy 2023, entitling them to duty-free import of capital goods and raw materials. Non-STPI units (called 'non-STPI exporters') submit SOFTEX directly to the authorised dealer bank, which forwards it to the RBI for monitoring. STPI-registered companies must comply with the obligation to achieve positive Net Foreign Exchange (NFE) earnings cumulatively over five years as per Para 6.08 of the Foreign Trade Policy 2023. The annual performance report (APR) must be filed with the STPI authority confirming NFE compliance, failing which duty concessions are withdrawn.
Can a software exporter retain export proceeds in a foreign currency account, and is there a limit?
Yes, a software exporter may retain up to 100% of realised foreign exchange earnings in an Exchange Earners' Foreign Currency (EEFC) account maintained with an authorised dealer bank under Para 1 of Schedule 1 to the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations 2015. Funds in the EEFC account can be used to meet business-related expenses outside India or for permitted current account transactions under the Foreign Exchange Management (Current Account Transactions) Rules 2000. However, the RBI has clarified via circular A.P. (DIR Series) Circular No. 51 (2011-12) that EEFC balances cannot be used for domestic payments or converted into rupees repeatedly for speculative purposes. No interest is paid on EEFC accounts, and balances must be used within a reasonable period.

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