SOFTEX Filing for Exporters: Everything you need to know in 2025

A survey by the Reserve Bank of India revealed that India's total exports of software services amounted to a staggering $205.2 billion during the 2023-24 fiscal year. Not just that, India is also considered one of the largest IT and BPM services exporting countries, with a total share of 56% in the global outsourcing market.

But, with such massive volumes of cross-border digital trade, the need for regulatory oversight and documentation of each export becomes quite necessary, especially for IT products and services that can't be physically tracked at ports.

That’s the reason why it's essential for every software exporter to file a SOFTEX form, which, in a way, serves as an official declaration of the value and type of software exports made to clients overseas. 

Mandated by the RBI, SOFTEX filing helps streamline, monitor, and regulate the export of software and IT services, along with ensuring compliance with foreign exchange regulations.

In this article, we'll explore what SOFTEX filing is and its significance for IT and ITeS exporters.

• SOFTEX filing is a mandatory process through which IT and ITeS exporters who are involved in software exports can report the details of their exports to RBI and ensure compliance with Foreign Exchange Management Act, 1999 regulations. The process involves submitting a SOFTEX form to Software Technology Parks of India (STPI) to verify the exports. 
• SOFTEX filing is essential for regulatory compliance with FEMA regulation, maintaining proper audit trails, assessing taxation, demonstrating your business credibility, and for accessing eBRC, which is essential for export incentives. 
• Definition of software in context of SOFTEX filing include IT and ITeS services exported such as computer programmes, database, audio-video signals, or information shared through a digital medium and not physically through CDs, DVDs, or PDs.
• When exporters do not file SOFTEX, their export proceeds may be treated as generic services, impacting their eligibility to bid for government tenders. They can also lose out on zero-rated GST benefits and input GST refund claims. It can also lead to regulatory scrutiny, delayed remittance processing, or even bank account freezes. 
• Some of the best practices exporters can follow while filing their SOFTEX include avoiding delays and submitting the form within 30 days of invoice generation, having proper documents, conducting audits regularly to maintain accuracy of the documents, and taking professional assistance from expert consultants. 

SOFTEX filing is a mandatory regulatory process in India for companies exporting software and IT services. It involves submitting a declaration form, the SOFTEX form, to the Reserve Bank of India (RBI) through Software Technology Parks of India (STPI) or Special Economic Zones (SEZ) authorities. This process ensures proper reporting and tracking of foreign exchange earnings from software exports.

In compliance with the Foreign Exchange Management Act, 1999, the RBI mandated the SOFTEX filing in 2013 for all exporters exporting software.

The SOFTEX form is issued by the RBI to the exporters, who use this form to provide information associated with their exports, such as the mode of transfer of the export.

The SOFTEX form is supposed to be filed by a wide range of exporters, including IT service providers, freelancers, and small businesses. To put it more precisely, all software exporters categorized as IT or ITeS and business process or knowledge process outsourcing (BPO and KPO) firms need to file a SOFTEX. Moreover, the process for filing is not the same for every exporter.

In the context of software exports, the way an exporter's company is registered decides how the SOFTEX will be filed. For instance, companies registered under STP, SEZ, Export Oriented Units (EOU) or DTA (Domestic Tariff Area) will have a different filing process than the one which are not registered under these areas, usually referred to as non-STP units.

According to Regulation 2 of Foreign Exchange Management (Export of Goods and Services) Regulation, 2015, the definition of software includes any computer programme, audio-video signals, design, drawing, database, or any information shared through any digital medium but not physically.

This means software exported through CDs, DVDs, pen drives, or any other physical media is considered a good and such exports fall under the ambit of regulations reserved for goods exports.

Software here mainly refers to IT and ITeS exports. While IT exports cover software products like SaaS (Software as a Service) and other software services like development, design, implementation, consulting, maintenance, and reengineering of a software or a software product, the ITeS exports includes IT services provided to cross-border clients through a virtual link.

STPI, or Software Technology Parks of India, is a government organization under the Ministry of Electronics and Information Technology (MeitY). IT service providers, digital exporters, or software development companies register with STPI to smoothen the process of regulatory compliance and take advantage of export incentives. Moreover, registering with STPI simplifies SOFTEX filing and provides exporters the legitimacy to bid for government tenders.

Not all of the IT and ITeS companies into software exports want to be registered under STPI. However, they too have to register, just under a different category, which is non-STP. Non-STPs function as a Domestic Tariff Area (DTA) unit and can sometimes face issues in getting their software exports certified.

SOFTEX filing is important because it keeps exporters compliant with essential regulatory requirements, helps them in taxation and audits, and strengthens their business reputation among relevant stakeholders. Let's take a closer look at these benefits.

1. Regulatory compliance

SOFTEX filing is mandatory under the Foreign Exchange Management Act, 1999. The filing process keeps exporters compliant with regulations under the Act and protects them from penalties and sanctions.

2. Audit-readiness and taxation

The SOFTEX form showcases the revenue you've earned on your exports, which is tracked by the government and influences taxation decisions and assessments. Plus, proper filing also generates a clear audit trail and keeps you ready for essential audits.

3. Business reputation

A habit of regularly filing SOFTEX also leaves a good reflection on your business credibility. It demonstrates your competence and transparency to your regulators, partners, investors, and customers.

4. Access to eBRC

A copy of the SOFTEX form is required when exporters need to access their eBRC from their Authorized Dealer-banks for a particular export. eBRC is essential for exporters to claim export incentives, duty drawbacks, and several other benefits under export promotion schemes of the government.

If an exporter doesn't file the SOFTEX form, they can invite regulatory scrutiny, banking restrictions, and it can even cause remittance disturbances. Here's what can happen if you don't file SOFTEX:

• Your export proceeds can be regarded as 'general services', and this can cause problems when your company tries to claim previous export performance during participation in tenders associated with software projects.

• Your business would not be eligible to claim the zero-rated GST incentive that's usually provided to exporters of goods and services upon submitting a Letter of Undertaking.

• Further, exporters can claim a refund on the input GST paid for goods and services used in the export process. However, to process these refund claims, tax authorities require you to submit SOFTEX forms as proof of export.

• Lastly, non-filing even after multiple reminders by your bank can lead to your bank account being frozen. This can also harm your business's credibility.

The SOFTEX form should be filed within 30 days from when your invoice for a particular export transaction was raised. To receive a SOFTEX form, exporters have to provide a set of documents to the concerned STPI that can verify their exports. These documents include:

Invoice: A detailed invoice that includes information on the software or services being exported, along with their monetary values.

Other Documents: These include the agreement, purchase order, scope of work (SOW) and any other relevant contract details.

Technical Write-Up: Technical write-up includes the functionalities and features of the exported software.

Declaration of Foreign Inward Remittance Certificate (FIRC): FIRC is issued by the bank and validates the receipt of foreign currency in the Indian bank account.

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The SOFTEX filing process is a multi-step procedure. Follow these steps when filing your SOFTEX form:

Step 1: Register with STPI

The first step is to register with your concerned Software Technology Park of India to obtain approval for exporting software in the first place.

Step 2: Generate invoice

Next, generate an invoice for the software services you have provided to your international client.

Step 3: Prepare SOFTEX form

Every export transaction should be linked to a SOFTEX Form, which means you have to prepare one for every transaction. You can generate a SOFTEX form from an RBI facility. The form can have details like features of software, its value, and the foreign exchange you've earned from that transaction.

Step 4: Submit to STPI

The next step is to submit that SOFTEX form to your registered STPI. Along with it, you should also submit your invoices, contracts, and agreements. Typically, the process is done monthly.

Step 5: Issuance of certificate by STPI

After your submission, you'll receive a certificate from STPI, which signifies that the documents provided by you are accurate and it validates the export transaction. This STPI authority can take 1-2 months for certifications, depending on the transaction volume.

Step 6: Submit to Authorized Dealer Bank

The final step after receiving the certification is to submit the SOFTEX forms to your authorized dealer bank for it to be forwarded to the RBI.

SOFTEX filing can also be done online in a much easier and quicker way. Here's how you can do it:

1. Register with the STPI portal

2. Log in to that portal with your credentials provided during registration

3. You'll get to an online SOFTEX Form. Make sure you enter all details required accurately in the form

4. Upload all the essential documents, such as invoices and contracts, and after careful review, submit the form

5. Once the form is submitted successfully, you'll receive an acknowledgement for the same

But till now, we've only discussed the SOFTEX filing for STP units, what about the non-STP units? Let's discuss that as well.

Non-STP units like freelancers or general software exporters also file their SOFTEX with STPI authority, however, they have to follow some additional steps. To receive SOFTEX certification from STPI, the unit will have to become an STP member by registering under STP scheme or remain a non-STP unit with STP.

Moreover, these units will also have to register separately for every export contract before filing for SOFTEX. This registration is usually done with the closest STPI authority, and the units need prior approval before undertaking an export declaration.

Sometimes, exporters can face certain challenges during SOFTEX filing, including:

1. Delay in submission: This usually happens if your deadline of 30 days prior to invoice generation is missed.
2. Poor coordination with AD banks: Submitting the STPI certification to your AD bank can also lead to unnecessary delay, which can be avoided with proper coordination.
3. Incorrect documents: A common error exporters might face is submitting inaccurate details in the invoice or contract terms, which can result in rejection.
4. Technical glitches: Sometimes, it might not be a problem from your end. There can be certain technical errors on the STPI portal that can delay processing.

Some of the best practices you can incorporate during your SOFTEX filing include not missing deadlines, filling accurate details in the form, taking help from professionals, and conducting frequent audits. Let's look at them in detail.

1. Avoid delays

Make sure you are filing your SOFTEX forms before the 30-day period is up. Delay in filing can not only lead to rejection but may even incur penalties and compliance issues.

2. Ensure proper documentation

Having proper documents with accurate information that can support your export transactions during filing is extremely crucial. This also helps in a smooth certification issuance from STPI.

3. Perform audits regularly

Conduct audits regularly to verify the accuracy of your SOFTEX filings. This way, you can easily identify any discrepancy, investigate the reason behind it, and rectify it in time.

4. Use professional help

If you think the whole process is too confusing, you can always take professional assistance from consultants with expertise in SOFTEX filing. This can simplify the process, along with ensuring accuracy, and you won't need to take any unnecessary burden.

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