SOFTEX: how a software or service export is declared

Two businesses bill overseas clients in dollars. One writes software and transmits it. The other runs a design consultancy. Under the foreign exchange rules they are not in the same position, and the difference is not about size or sector. The Reserve Bank's FED Master Direction No. 16/2015-16 on Export of Goods and Services carries a declaration procedure for software at paragraph B.5, and provides separately at paragraph B.7 that in respect of export of services to which none of the forms specified in the Regulations apply, the exporter may export such services without furnishing any declaration.

Who owes a declaration and who does not?

Paragraph B.7 of the Master Direction is the cleanest statement of the boundary. It provides that where none of the forms specified in the Regulations apply to an export of services, the exporter may export without furnishing any declaration, but shall be liable to realise the amount of foreign exchange which becomes due or accrues on account of such export, and to repatriate it to India in accordance with the Act and the Regulations.

Read the two halves separately, because most people only read the first. No form does not mean no obligation. The realisation and repatriation duty attaches to the service exporter exactly as it attaches to the exporter of goods, and it runs on the same clock: the realisation clock changes on 01-10-2026. What the service exporter is spared is a declaration, not a duty.

What is a SOFTEX form and who certifies it?

It is the declaration for software exports, and unlike an invoice it is valued and certified by someone other than the exporter. Paragraph B.5 of the Master Direction provides that the exporter submits the SOFTEX form in quadruplicate to the designated official of the Government of India at the Software Technology Parks of India or the SEZ concerned, for valuation and certification, and that the invoice value remains subject to the valuation of the export declared on the SOFTEX form by that designated official.

The form itself has been consolidated and moved online. The same paragraph records that a common SOFTEX form was devised to declare single as well as bulk software exports, that software exporters can file single as well as bulk SOFTEX forms in the form of a statement in excel format to the competent authority for certification, and that the Reserve Bank extended the facility for online generation of the SOFTEX form number for both single and bulk off-site software exports, so numbers are no longer allotted manually by regional offices.

What are the deadlines on a software invoice?

There are two, and they are usually confused with each other. The first governs when you invoice. Paragraph B.5 provides that for long duration contracts involving a series of transmissions, the exporter should bill overseas clients periodically, at least once a month or on reaching the milestone, with the final invoice raised not later than 15 days from the date of completion, and that where the contract is for a single operation the invoice is raised within 15 days from the date of transmission.

The second governs when the declaration goes in. The same paragraph provides that the exporter should submit the SOFTEX form to the designated official for valuation and certification not later than 30 days from the date of invoice, or the date of the last invoice raised in a month. DGFT's public eBRC frequently asked questions restate the same 30 day position from the other side of the process. A late invoice therefore compresses a deadline it does not obviously touch, which is the trap in a milestone contract.

Is your work software or a service?

This is the question the paperwork turns on and it is not always obvious. DGFT's public eBRC frequently asked questions describe SOFTEX forms as relating specifically to export of software, and say that any entity making export of software and software related service is required to follow the procedure. The Master Direction routes anything the specified forms do not cover to paragraph B.7 and its no declaration position.

What we could not establish from the instruments is a bright line test that answers every case: the boundary between software related service and a service to which no form applies is not defined in the Master Direction in terms an exporter can apply mechanically to, say, a managed operations contract or a data annotation engagement. Where your work sits near that line, the answer to ask for is your Software Technology Parks of India jurisdiction's, in writing, before the first invoice rather than after the thirtieth.

How does the money close on a service export?

Through the remittance message, not through a document you file. DGFT's public eBRC frequently asked questions record that an exporter cannot generate an eBRC without an Inward Remittance Message, that banks are obligated to report all foreign remittance IRMs to DGFT on an account credited basis, and that reporting the IRM to DGFT does not require the submission of any documents to the bank. For a SOFTEX case the same FAQ directs the exporter to choose the specific purpose code and, within the service category, to select IT.

Two operational notes from the same document matter to anyone billing monthly. Multiple eBRCs can be generated invoice wise from a single SOFTEX by entering the invoice number, so one certified declaration can cover a run of invoices. And where a SOFTEX approval is delayed by more than a month, the FAQ records that banks must send the IRMs to the DGFT portal and exporters can then use the SOFTEX details whenever the approved SOFTEX arrives, so the remittance is not stranded by a certification queue. The electronic bank realisation certificate, end to end covers the generation step itself.

What is exempt, and what does exemption not do?

There is an exemption route and it is narrower than its name suggests. Paragraph B.12 of the Master Direction provides that the requirement of declaration of export of goods and software in the prescribed form will not apply to the cases indicated in Regulation 4 of Notification No. FEMA 23(R)/2015-RB dated 12-01-2016, and adds immediately that exporters shall however be liable to realise and repatriate export proceeds as per the FEMA regulations.

We could not open the text of Regulation 4 of that notification on an official host at the time of checking, so this guide does not list the exempt cases and you should read the regulation as in force before relying on one. What the Master Direction does state plainly is the part that matters commercially: an exemption from declaring is not an exemption from bringing the money home, and it is the second obligation that produces the bank calls.

What should a service exporter keep?

The file is smaller than a goods exporter's and every item in it does real work.

• The contract and the milestone schedule. The invoicing rhythm in paragraph B.5 is derived from the contract, so the contract is what shows an invoice was raised on time.
• The invoice, dated. Both clocks run from it: 15 days for raising the final invoice on a long contract, 30 days for the declaration.
• The certified SOFTEX, where one is owed. Valued and certified by the designated official, and the reference the eBRC is later built against.
• The credit advice with its purpose code. For a service export the money is the export, which is the point made in FIRC and inward remittance.
• The realisation position per invoice. Not per client and not per year, because the obligation attaches to the export.

Where to go from here

A service export has fewer documents than a goods export and each one carries more weight, so the adjacent guides are about proof rather than logistics.

• What the credit proves. FIRC and inward remittance covers why realisation is a condition of an export of services and not of goods.
• The certificate the schemes read. The electronic bank realisation certificate, end to end.
• The clock on the money. The realisation clock changes on 01-10-2026.
• The tax side of a zero rated supply. The two GST refund routes, where the services file is the one that needs the bank certificate.
• Certificates against reported remittances. eBRC is a sibling service that works on electronic bank realisation certificates against the remittances banks report.

Purser treats a service export as a record with dates on it, so the invoice, the declaration deadline and the realisation position sit together rather than in three systems. Purser never submits to a government portal and it never sends an outbound message without a recorded human approval event, so the filing with your certifying authority stays yours. Purser Outbound keeps the file.

Frequently asked questions

Does a service exporter have to file a declaration?

Not where no prescribed form applies. Paragraph B.7 of the Reserve Bank's FED Master Direction No. 16/2015-16 on Export of Goods and Services provides that in respect of export of services to which none of the forms specified in the Regulations apply, the exporter may export without furnishing any declaration, but shall be liable to realise the foreign exchange that becomes due or accrues on account of the export and to repatriate it to India.

When must a SOFTEX form be submitted?

Paragraph B.5 of the Reserve Bank's FED Master Direction No. 16/2015-16 provides that the exporter should submit the SOFTEX form to the designated official of the Government of India for valuation and certification not later than 30 days from the date of invoice, or the date of the last invoice raised in a month. DGFT's public eBRC frequently asked questions restate the same 30 day position.

Who certifies a SOFTEX form?

A designated official of the Government of India at the Software Technology Parks of India or the SEZ concerned. Paragraph B.5 of the Reserve Bank's FED Master Direction No. 16/2015-16 provides that the form is submitted in quadruplicate for valuation and certification, and that the invoice value is subject to the valuation of the export declared on the SOFTEX form by that designated official, so the certified value governs rather than the invoice alone.

How often must a long software contract be invoiced?

Paragraph B.5 of the Reserve Bank's FED Master Direction No. 16/2015-16 provides that for long duration contracts involving a series of transmissions the exporter should bill overseas clients periodically, at least once a month or on reaching the milestone, with the final invoice raised not later than 15 days from the date of completion. Where the contract is for a single operation, the invoice is raised within 15 days from the date of transmission.

Can one SOFTEX cover several invoices for eBRC purposes?

Yes. DGFT's public eBRC frequently asked questions state that multiple eBRCs can be generated from a single SOFTEX by entering the invoice number in the eBRC, and that for multiple invoice numbers the exporter generates multiple eBRCs. The same document records that where a SOFTEX approval is delayed, banks must still send the Inward Remittance Messages to the DGFT portal and the exporter uses the SOFTEX details once the approval arrives.