India is a leading exporter of software and IT enabled services to other countries as there are many companies involved in IT and ITes business. Most of the companies in Kerala are engaged in providing IT/ITes services to its client outside India.
Understanding more about SOFTEX form
Companies that export physical goods by air and ship should declare the values properly to custom department authorities for overcoming unwanted issues. Earlier, exporters used GR Form or PP Form for doing the declaration along with the invoice and other supporting documents to get the job done quickly. Another thing is that the customs office should approve and certify the value of goods while exporting software products. However, incase of service exporters, they are advised to get registered with STPi and file SOFTEX monthly form because it simplifies the evaluation process with high accuracy.
What is the difference between GR and SOFTEX form?
GR and SOFTEX forms are both issued by Reserve Bank of India (RBI) in order to regulate foreign exchange transactions against exports. An exporter has to submit a duplicate GR form obtained from RBI along with Xerox copy of shipping bill generated by expert customs house agents. There are several steps involved in the procedure and exporters should evaluate them in detail. The only difference between GR and SOFTEX form is the approval process. In GR form, submission and valuation both will happen simultaneously from the shipment area. On the other hand, SOFTEX form approves an application only after exporting the software or It enabled services.
Why RBI introduced SOFTEX form?
A customs office will accept only physical goods while exporting them to other nations. On the other hand, it is really difficult to export non-physical goods that will result in several problems. Most software products go through the media or internet that utilises the data communication links. In order to facilitate software exporters, RBI introduced SOFTEX form for regularising the transactions. It appointed Software technology parks of India (STPI) as the administrative authority for software export valuation which approves the SOFTEX form instead of customs.
How does SOFTEX form works?
SOFTEX form issued by Reserve Bank foreign exchange department is mainly designed for software exporters who want to submit an application with ease. Companies engaged in the BPO, KPO, call centres, and data processing also should file the form in order to avoid future complications. The forms are available in online and exporters should submit them within 30 days of export invoice or last invoice issued in a month. STPI will evaluate them with special attention and send the documents to RBI for further processing. The approved softex shall be available for download in the STPI online portal.
Who should file SOFTEX form?
All companies that provides IT and IT enabled services are required to be registered with the STP or SEZ and should file SOFTEX form in order to comply with foreign trade policy. Exporters registered with STP and SEZ should also file the form with the concerned STPI director. Exporters should know the rules and regulations from concerned authorities before filing the form which will ultimately help to avoid unwanted issues. Software companies willing to export their products should consider availing the benefits of becoming an STP unit for generating high revenues. At the same time, they should know the procedures in detail before registering with the STP.
Things covered by RBI under the software category
The RBI mentions some products under software category for both IT and ITES firms. In fact, it included both software and software services enabling exporters to file SOFTEX form accordingly. There are several things covered in software services and exporters should know about them in detail. Some of them include design, development, implementation, consulting, implementation, etc. The ITES companies that deliver services through BPO, KPO, call centers, and data processing with a telecom or internet also comes under software category. Exporters should determine the category clearly before processing the form.
Guidelines for software exporters including SaaS companies
Software companies that don’t operate under STP or SEZ can get remittances without filing SOFTEX form. On the other hand, they should consider register their unit soon for reducing risks. This is because not getting classified as ‘STPI’ or ‘non-STPI unit‘ by the government may lead to several problems in the future. Moreover, exporters have to face complex service tax rules and other things that can result in several complications. Software companies including SaaS organisations should file SOFTEX after registration with STPI or SEZ that can help export products without any difficulties.
What are the advantages of SOFTEX form?
Software companies engaged in export business should declare their values correctly for receiving payments from banks as soon as possible. SOFTEX form covers all the aspects of RBI allowing exporters to digitalise everything easily. It gives ways to execute the process at different levels that can save more time. Apart from that, it makes feasible ways to process an application with minimal documentation thereby helping to obtain optimal results. The form even helps to reduce errors and mistakes while exporting software products. It is an important one to fill every field in SOFTEX form carefully because overwriting is not allowed during the submission process.
How to file SOFTEX form?
An authority signatory should sign and seal the form for further processing. Besides that, exporters should submit the relevant documents when filling details in Section B. Exporters having multiple invoices should club them into a SOFTEX form. Those who export software products for the first time should attach a certificate obtained from concerned authorities. ITES companies should enclose a certified copy of “datacom service provider” while processing the form. It is advised that Exporters should seek support before processing the form.
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