INTRODUCTION
The rapid growth of India’s technology sector has transformed the manner in which software and IT-enabled services are exported. While business models have evolved from traditional software development to SaaS, cloud computing, managed services and AI-driven solutions, one aspect of the regulatory framework continues to generate considerable uncertainty i.e., the applicability of SOFTEX filing and the role of STPI registration. This position is set to undergo a significant change with the notification of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, vide Notification No. FEMA 23(R)/2026-RB dated 13th January 2026, which are scheduled to come into force from 1st October 2026.
This article examines the legal framework governing software exports, clarifies the distinction between filing of SOFTEX forms and obtaining STPI Registration, highlights the practical implications for software and IT-enabled service exporters, and outlines the key changes proposed under the 2026 Regulations.
The Statutory Framework for SOFTEX Filing
Relevant Legal Provisions:
According to the provisions of sub-section (1) of Section 7 of the Foreign Exchange Management Act, 1999 (“FEMA”), Every exporter of goods shall:
- furnish to the Reserve Bank or to such other authority a declaration in such form and in such manner as may be specified, containing true and correct material particulars, including the amount representing the full export value or, if the full export value of the goods is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions, expects to receive on the sale of the goods in a market outside India;
- furnish to the Reserve Bank such other information as may be required by the Reserve Bank for the purpose of ensuring the realisation of the export proceeds by such exporter.
Further, as per sub-section (3) of Section 7 of FEMA, every exporter of services shall furnish to the Reserve Bank or to such other authorities a declaration in such form and in such manner as may be specified, containing the true and correct material particulars in relation to payment for such services.
In exercise of these powers, the Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 vide Notification No. FEMA 23/2015-RB (“2015 Regulations”).
As per the provisions of clause (viii) of Regulation 2 of the 2015 Regulations, “Software” means any computer programme, database, drawing, design, audio/video signals, any information by whatever name called in or on any medium other than in or on any physical medium.
This definition covers software development services, automation and testing services, SaaS offerings, web-based applications, and other electronically delivered software services.
Depending upon the underlying facts, the definition is capable of encompassing:
- Custom software development;
- Software-as-a-Service (SaaS);
- Cloud-based applications;
- Enterprise software implementation;
- Managed technology services;
- Remote software maintenance;
- Automation and testing services;
- IT-enabled services delivered electronically;
- Application support;
- Software consultancy integrated with implementation; and
- Other digitally delivered technology solutions.
Regulation 3 of the 2015 Regulations states as follows:
- In case of exports taking place through Customs manual ports, every exporter of goods or software in physical form or through any other form, either directly or indirectly, to any place outside India, other than Nepal and Bhutan, shall furnish to the specified authority, a declaration in one of the forms set out in the Schedule and supported by such evidence as may be specified, containing true and correct material particulars including the amount representing:
- the full export value of the goods or software; or
- if the full export value is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions expects to receive on the sale of the goods or the software in overseas market, and affirms in the said declaration that the full export value of goods (whether ascertainable at the time of export or not) or the software has been or will within the specified period be, paid in the specified manner.
The forms specified under the Schedule of the 2015 Regulations are as follows:
- Form EDF: Declaration for Export of Goods
- Form SOFTEX: Declaration for Export of Software.
Distinguishing SOFTEX Filing, Non-STPI Registration and the STP Scheme
Much of the confusion surrounding software export compliance stems from treating “STPI registration” as a single, undifferentiated expression. In reality, three distinct regulatory concepts are involved – (i) registration under the STP Scheme, (ii) registration as a Non-STP unit, and (iii) filing of SOFTEX Forms under FEMA – each serving a different purpose and following a separate procedure.
STPI Registration under the STP Scheme
Registration under the STP Scheme is a policy framework administered by Software Technology Parks of India (STPI), under which an Indian company, a subsidiary of a foreign company, or a branch office of a foreign company may set up a unit for the development and export of computer software as a 100% Export Oriented Unit (EOU). Registration under the Scheme is Voluntary, and is availed by exporters who wish to access the benefits associated with EOU status, which typically include:
- Import of capital goods and other approved inputs without payment of customs duty;
- Access to 100% foreign direct investment through the automatic route; and
- Simplified customs and export procedures, with STPI acting as the single-window nodal authority for the unit.
A company that does not wish to avail these benefits is under no obligation to register under the STP Scheme merely because it exports software. Importantly, however, the absence of STP Scheme registration does not, by itself, dispense with the statutory obligation to declare software exports under FEMA – that obligation, as discussed above, flows independently from Section 7 of FEMA and the 2015 Regulations.
Registration as a Non-STP Unit
Where a company operates from a Domestic Tariff Area and does not intend to register under the STP Scheme, it is nevertheless required to register with the jurisdictional STPI as a Non-STP unit, for the limited purpose of accessing the STPI portal for certification of SOFTEX Forms. Unlike registration under the STP Scheme, Non-STP registration:
- does not confer the status of a 100% Export Oriented Unit;
- does not entitle the company to the customs, duty or fiscal benefits available to STP units; and
- does not otherwise alter the legal or corporate status of the entity.
The registration is obtained by submitting an application, together with the prescribed supporting documents (including incorporation documents, a board resolution authorising the registration, and particulars of the software export activity), to the Director of the jurisdictional STPI centre, along with the applicable processing fee. On verification, STPI issues a Letter of Permission / Certificate of Registration as a Non-STP unit, ordinarily valid for three years and renewable on application prior to expiry. Once registered, the Non-STP unit is required to register each export contract with STPI and to submit periodic performance reports, in addition to filing SOFTEX Forms for certification against each qualifying export.
SOFTEX Filing: Procedure and Compliance
As discussed above, Regulation 3 of the 2015 Regulations requires every exporter of software – whether or not registered under the STP Scheme – to furnish a declaration in Form SOFTEX in respect of software exported. In broad terms, the filing process involves:
- Generation of a SOFTEX number (single, or in bulk for high-volume exporters) linked to the underlying export transaction(s);
- Filing of the SOFTEX Form on the STPI online portal, together with the export invoice(s) and a Statement of Invoice, for verification and certification by the designated authority;
- Where periodic invoices are raised on the same overseas client, a combined SOFTEX Form may be filed for all invoices raised on that client in a calendar month, subject to the last invoice being raised within the period specified for completion of the relevant milestone or contract;
- Submission of the SOFTEX Form and supporting documents, ordinarily within 30 days of the invoice date, or of the last invoice in a monthly batch; and
- On certification, presentation of the certified SOFTEX Form to the exporter’s Authorised Dealer Bank, which reconciles the export against the inward remittance in the Export Data Processing and Monitoring System (“EDPMS”) and issues a Bank Realisation Certificate.
It may be noted that invoices below USD 25,000 were, until 2013, exempt from SOFTEX filing; that exemption was withdrawn with effect from September 2013, and filing is presently required in respect of all software export transactions, irrespective of invoice value. Delay in filing, or failure to file, SOFTEX Forms may result in the underlying export remaining unreconciled in EDPMS, difficulties in obtaining a Bank Realisation Certificate (which is, in turn, relevant to GST refund claims on zero-rated exports), and exposure to proceedings for contravention of the reporting requirements under FEMA.
Regulatory Update: Prospective Changes Effective 1st October 2026
The RBI has, vide Notification No. FEMA 23(R)/2026-RB dated 13th January 2026, notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (“2026 Regulations”), which are scheduled to come into force from 1st October 2026, superseding and replacing the 2015 Regulations. The material changes proposed under the 2026 Regulations, in brief, are:
- Consolidation of Forms: the separate SOFTEX Form and Export Declaration Form (EDF) are merged into a single, unified EDF applicable to all categories of exports — goods, services and software;
- Expanded Specified Authority: for software exports from Domestic Tariff Area units, the Specified Authority is expanded to mean either STPI or the exporter’s Authorised Dealer Bank, as against STPI being the sole Specified Authority at present;
- Software Reclassified as ‘Services’: software is brought within the broader definition of “services”, simplifying the regulatory architecture; and
- Operational Transition: the internal operating procedures governing the role of Authorised Dealer Banks as Specified Authority are yet to be issued. Until such procedures are notified and become operationally effective, the existing SOFTEX / Non-STP framework under the 2015 Regulations continues to apply in full.
Once operationalised, exporters that elect to route their export declarations through their Authorised Dealer Bank may find the practical need for continuing Non-STP registration correspondingly reduced, subject to an evaluation of any continuing obligations at the time of transition. Until formal operational guidelines are issued by the Reserve Bank of India and corresponding systems are established by Authorised Dealer Banks and/or STPI, however, software exporters should continue to comply with the SOFTEX / Non-STP framework as it presently stands, while tracking developments in this regard closely as the effective date approaches.
Concluding Remarks
The requirement to file SOFTEX Forms is a statutory obligation traceable to Section 7 of FEMA and the 2015 Regulations framed thereunder; it does not depend on whether an exporter has chosen to register under the STP Scheme. Registration under the STP Scheme is an optional policy framework availed by exporters seeking EOU-linked benefits, whereas Non-STP registration is simply the mechanism that lets a DTA-based software exporter file SOFTEX forms and meet its reporting obligation under FEMA. This position will evolve once the 2026 Regulations take effect from 1st October 2026, with the SOFTEX / Non-STP framework giving way to the unified EDF and Authorised Dealer Banks joining STPI as a Specified Authority; until then, however, the existing framework continues to apply in full. Software and IT-enabled service exporters particularly those who have historically remained outside the STPI framework in the belief that SOFTEX compliance applies only to STP or SEZ units would be well advised to review their export arrangements, regularise their compliance position, and track the 2026 transition closely as the effective date approaches.
This article is published for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such for any specific transaction or compliance matter. Readers are advised to seek professional counsel for advice tailored to their specific circumstances. © R&A Associates.