Export of goods and services is the most regulated transaction as it takes domestic products into the international market and brings foreign currency in India. An exporter is required to furnish various forms and documents with different authorities to substantiate that goods have been actually exported and consideration for such export is received in convertible foreign exchange.
Export of goods are easy to monitor as it involves physical movement of goods out of India and entire process of sending goods out of Indian Custom Frontiers are managed by Custom Authorities of India. However, challenges can lie when goods are exported but not in physical form rather in some digital form, e.g., Softwares. Softwares and software related exports is the most evolved domain and India is already contributing most toward exporting software outside India. In the case of export of softwares, it is not possible to track export at custom ports as no physical movement of softwares takes place. Therefore, the government has prescribed a new procedure in the form of SOFTEX Form to monitor export of softwares over digital platforms. In this article you can get an elaborate insight into “SOFTEX Form”.
1. What is Softex Form
- As per Regulation 3 of Foreign Exchange Management (Export of goods and services) Regulations, 2000, every exporter of goods or softwares, in physical form or in any other form, is required to furnish a declaration about such export with designated authorities.
- For furnishing such details following 4 forms are prescribed:
Form GRTo be filed for export of software in physical form, otherwise than by Post,i.e. magnetic tapes/discs and paper media.Form SDFTo be attached with shipping bills, for exports declared to Customs Offices which have introduced the Electronic Data Interchange (EDI) system for processing shipping bills.Form PPTo be filed in case of Export through Post.Form SOFTEXTo be filed for export of software otherwise than in physical form.
- Accordingly, Form “SOFTEX” is filed when an exporter exports softwares over digital platform.
- As per Regulation 6(C) of Foreign Exchange Management (Export of goods and services) Regulations, 2000, declaration in Form SOFTEX shall be filed in respect of export of computer software and audio/video/television software. Further, such form shall be filed to the designated official of the Department of Electronics of Government of India at the Software Technology Parks of India (STPIs) or at the Free Trade Zones (FTZs) or Export Processing Zones (EPZs) in India in triplicate.
- After certifying all three copies of such form, the said designated official shall take following action:
- forward original copy to RBI;
- Return duplicate to the exporter for further submission with authorised dealer.
- Retain triplicate for record.
- On realization of export proceeds, the authorised dealer shall submit the duplicate of SOFTEX Form to the RBI after due certification.
2. What is the meaning and scope of the term ‘Software’
- The term 'software' is defined in Regulation 2(viii) of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 as “any computer programme, 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”
- The definition provided is comprehensive, encompassing all types of software that can be shared in any form other than a physical medium. Software on a physical medium is treated as a good, and the same declarations that apply to goods also apply to software on a physical form also.
3. How did SOFTEX Form come into existence and why
- In general, exporting entails shipping 'goods and services' to customers in other countries (those outside India's territorial borders) for the purpose of selling. Physical products are shipped through a physical port of entry (a seaport, airport, or foreign post office) that is controlled by the Central Customs Department.
- When physical products leave the country, the exporter must disclose the value of export at the port of entry. Such declaration is done by filing GR and PP Form for non-EDI ports and SDF for EDI ports, together with an invoice and other supporting documentation.
- At the point of shipment, the declared value must be acknowledged and validated by the customs office. This is known as "export valuation."
- The value of an export is accepted by both RBI and its authorised dealer (the exporter's bank) once the valuation is completed. The remittance of an equivalent value into the exporter's bank account is then monitored by the RBI.
- A 'Software' exported on a medium (CD/DVD, magnetic tapes, etc.) must go through these stages because it is being shipped as physical products through a port of shipping.
- When the “Software Technology Park” (STP) concept was established in the early 1990s, the necessity to export software over data communication links arose.
- The Customs Department struggled to manage this because nothing physical was evident in the Software transmitted, and they lacked the human resources and know-how to deal with exports over telecommunications networks.
- Issue of reporting of export of Software over telecommunication network was resolved through introduction of SOFTEX form as an alternative to the GR/PP forms for software export via data communication networks.
- In place of Customs, STPI, as the administrative authority of the STP scheme, was designated as the designated authority for "Software export valuation" and certification of the SOFTEX form.
- The designated authority for SOFTEX value is currently the jurisdictional STPI Directors and SEZ Commissioners.
- The SOFTEX form has the same objective, policy, and process as the GR/PP (or new EDF) form.
- The main policy distinction between the GR/PP or EDF form and the SOFTEX form is that the GR/PP forms are submitted and valued concurrently with the actual exports from the port of shipment. The SOFTEX form, on the other hand, is a post-facto approval, given after the software has been exported.
- Before the SOFTEX form was introduced, the Software was treated in the same way as 'goods' in terms of international trade policy, because policymakers couldn't imagine trading in anything that wasn't 'goods.'
- Even today, a non-IT services export does not require a declaration or export valuation. As a result, Software (IT and ITeS) has been accorded a distinct status in international trade, similar to that of "goods."
4. Who is under an obligation/requirement to fill a SOFTEX Form
- Every exporter who is engaged in export of computer software and audio/video/Television software otherwise than in physical form shall be under obligation to file Form Softex. Software export through physical form can be in magnetic tapes/discs, and paper media.
- Requirement of filing SOFTEX form is applicable to all units whether located in STP, SEZ, EPZs, 100% EOU (Export Oriented Units) or DTA (Domestic Tariff Area).
- Therefore, companies located in non-STP areas and engaged in export of software are also under an obligation to file Form Softex.
5. Who is not required to fill a SOFTEX Form
- As per Regulation 4 of Foreign Exchange Management (Export of goods and services) Regulations, 2000, an exporter is not required to file Form SOFTEX where export of software is accompanied by a declaration that value of such software does not exceed INR 25,000.
- Vide Circular No. RBI/2004/35 A.P.(DIR Series) Circular No.61 Dated 31st January, 2004, such exemption limit revised from INR 25,000 to USD 25,000. Therefore, it was decided to waive the submission of SOFTEX Form where value of export of software does not exceed USD 25,000 or its equivalent.
- However, such exemption was withdrew Circular RBI/2013-14/254 A.P. (DIR Series) Circular No.43 Dated 13th September,2013 effective 1st October 2013. With effect from 1st October, 2013, all exporters of softwares are under obligation to file Form SOFTEX.
- According to international trade policy, software exporters (including IT and ITeS enterprises) that are not registered in the STP or SEZ (or other EOU schemes) scheme should also submit SOFTEX.Such exporters, often known as non-STP units, can file for SOFTEX with the STPI Director in their jurisdiction.
- Only exporters who do not export software are exempt from filing SOFTEX. Without certification of SOFTEX form, foreign remittances received as export proceeds will fall into one of two categories: general service or illicit remittance.
6. Filing of SOFTEX by Non-STP Units
- Since, SOFTEX should be filed with concerned STPI (Designated Authority), then it can be an issue for Non-STP units how they should file their SOFTEX form as they are not located in STPI.
- Accordingly, to overcome the issue of filing of SOFTEX by Non-STP units, STPI started option of registration for Non-STP unit in STPI. In order to become a NON-STP unit under STPI, the company has to get register itself with STPI on submission of application form along with the supporting documents, to the jurisdictional Director, STPI along with applicable processing fee.
- For SOFTEX Certification by STPI, exporter has to become a STP member by either registering under STP Scheme or as a non-STP unit with STP.
7. What is the periodicity and time limit for filling a SOFTEX Form
7.1 Periodicity of filing of SOFTEX Form
- Initially SOFTEX Form was required to be file for each transaction of export of software. As per SOFTEX was required to be file within 30 days from the date of Invoice.
- However, later on facility of bulk generation of SOFTEX form was provided which allowed filing of one SOFTEX form for multiple software export invoice.
- SOFTEX form should be filed on a monthly basis, i.e., details of all invoices issued for export of software should be furnished in one SOFTEX form.
7.2 Due date of filing of SOFTEX Form
- Softex 表格应在开具发票月份结束后的 30 天内 提交。
- 此外，软件出口的出口收益应在出口之日起 180 天内 汇回。如果未在规定时间内收到出口收益，印度储备银行（RBI）可能会对相关实体采取行动。
8. 根据《外汇管理法》（FEMA），SOFTEX 表格有哪些义务？
- 货物和服务出口受《外汇管理法》（FEMA）第 7 条 管辖。
- 根据 第 7(3) 条，每位服务出口商必须以规定的形式和方式向印度储备银行或其他主管当局提交申报，说明有关此类服务付款的准确且确切的实质性细节。因此，制定了《2015 年外汇管理（货物和服务出口）条例》来明确所需包含的方式和细节。
- 根据第 3 条规定，产品和服务出口商必须向指定主管当局申报其出口价值，即货物出口向海关专员申报，软件出口向软件技术园区（STPI）主任或经济特区（SEZ）专员申报。
- 印度储备银行要求指定主管当局对出口价值进行认证，以便追踪其实现情况，而指定主管当局负责此项认证工作。
- EDF 表格用于申报出口货物价值，而 SOFTEX 表格用于申报软件出口。
- 对于出口货物，出口价值的申报和认证发生在出口过程中；而对于软件，出口价值的申报和认证则在出口过程完成后进行。
- 第 3(3) 条 明确指出，在无需为某些服务进行规定申报的情况下，出口商可以在不进行任何申报的情况下出口此类服务，但必须按照 FEMA 条例的规定，实现并汇回因该出口而到期或应计的任何外汇。
- 上述规定仅适用于法规未要求对出口服务进行申报的情况。然而，如前所述，软件出口必须进行 SOFTEX 申报。
- 因此，每位软件出口商都必须提交 SOFTEX 申报。现在，让我们看看在 FEMA 条例
9. 提交 SOFTEX 表格需要支付哪些费用？
- 提交 SOFTEX 表格无需缴纳任何法律费用。
- 但是，在 STPI 注册的非 STP 出口商需就 STPI 对 SOFTEX 表格的认证支付服务费。
- 不同出口价值的服务费等级是根据年度出口营业额确定的。
10. 未提交 SOFTEX 表格会有什么处罚或后果？
- 如果国内关税区（DTA）单位出口软件服务但未申报其软件出口并获取 SOFTEX 表格认证，则属于违反《2015 年外汇管理（货物和服务出口）条例》的行为。
- 这将导致根据 FEMA 第 13(1) 条 采取法律行动，并可能被处以最高可达违规金额三倍的罚款。
- 此外，DTA 单位还可能因违规行为持续而面临从第一天起每天最高 5,000 卢比的持续罚款。
- 在没有认证的 SOFTEX 表格的情况下，银行会将入境的外汇汇款视为服务出口的实现收益。因此，提供的银行实现证明（BRC）将仅证明资金是为服务出口而非软件出口收到的。
- 这将阻碍商业实体在参与软件项目招标时证明其过往的出口业绩。
