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Overview of Non-STPI registration & SOFTEX filing

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Overview of the importance of non-Software Technology Parks of India & SOFTEX filing

Non-STPI Registration

Any company, partnership firm, or proprietorship engaged in the development of export-oriented computer software or IT-enabled services can register as a Non-STP unit under Software Technology Parks of India to obtain SOFTEX certification. The RBI through a circular issued in September 2013, introduced a revised procedure for SOFTEX filing, making it mandatory for all exporters. This directive supersedes the previous RBI notification from 2004, which required SOFTEX filing only for invoices exceeding USD 25,000.

To assist exporting units that are not part of the Software Technology Parks of India (STPI) scheme in complying with this regulatory requirement, Software Technology Parks of India introduced services for Non-STP units. Through a straightforward registration process, these companies can obtain STPI approvals for SOFTEX forms. Many exporters, previously exempt from SOFTEX filing, were unaware of the regulatory change and did not submit SOFTEX forms for their export transactions.

Why Do Non-STPI Units Need Registration?

Unlike SEZ and STPI units, which have designated authorities (Development Commissioner & STPI Director) to certify exports, DTA (Domestic Tariff Area) units lack certification authority. STPI is designated by RBI to certify SOFTEX forms for non-STPI units. All IT/ITES companies exporting services via data communication links must file a SOFTEX form for certification. Since STPI is the designated authority for SOFTEX certification, companies must either:

  • Register under the STP scheme, which provides additional benefits beyond SOFTEX certification, or
  • Register as a Non-STP unit solely for the purpose of SOFTEX certification.

STPI is the designated authority for SOFTEX certification, companies must either Register under the STP scheme, which provides additional benefits beyond SOFTEX certification, or Register as a Non-STP unit solely for the purpose of SOFTEX certification. By complying with this requirement, companies ensure proper documentation and regulatory adherence for their software export transactions.

By complying with this requirement, companies ensure proper documentation and regulatory adherence for their software export transactions. Without SOFTEX certification, companies may face issues with:

o   Tax refunds under GST

o   Foreign remittance approvals from banks

o   Export compliance under FEMA

Mandatory SOFTEX Filing for Non-STPI Units:

IT companies engaged in software exports must obtain SOFTEX certification to comply with Foreign Exchange Management Act (FEMA) regulations. SOFTEX filing is required for proof of software exports and is essential for GST refunds and foreign exchange compliance. Non-compliance can lead to penalties under Section 13(1) of FEMA, including fines up to three times the amount involved.

Procedure for Registration of Non-STP Units for SOFTEX Certification:

Companies must register as non-STPI units with STPI to file SOFTEX. Registration is valid for 3 years and must be renewed 3 months before expiry. To complete the registration, the company must Submit an application form along with supporting documents to the jurisdictional Director, STPI.

Processing time for non-STP unit registration: The registration process takes 10 working days from the date of submission of a complete application form, along with supporting documents and the applicable processing fee. Non-STP units can operate from any location in India. However, registration must be done with the jurisdictional STPI Centre.

Proof of non-STP registration: Upon registration, a non-STP unit receives a Registration Certificate from STPI, valid for three years. Renewal applications should be submitted three months before expiry.

Steps for Registration- Registration Process for Non-STPI Units

  • Online Application Submission: Apply via STPI Online Portal and Upload required documents (see list below)
  • Hardcopy Submission: Submit a self-attested hard copy of the application with supporting documents to STPI.
  • Payment of Processing Fee: INR 1,180 (INR 1,000 + 18% GST) and Pay via UPI or Demand Draft (DD) in favor of The Director, STPI Bengaluru
  • Approval Process: STPI reviews the application and documents. and Upon approval, the company receives a Registration Certificate valid for 3 years.

Process for renewing the Letter of Permission for a Non-STP unit :

The Letter of Permission for a Non-STP unit is valid for three years. To renew it:

  • Renewal Process Apply 3 months before expiry. And there is No renewal charges.
  • The unit must approach the jurisdiction Director, STPI during the last three months before expiry. There are no charges for Letter of Permission renewal.

Eligibility: Document on SOFTEX for Non-STPI Units: Required documents include:

  • Companies engaged in Software Development; IT/ITES exports can register under STPI (Non-STP) for SOFTEX certification. following are Required Documents for on SOFTEX for Non-STPI Units
  • Memorandum & Articles of Association.
  • Board Resolution (authorizing setup & signatories)
  • Promoter/Director/Partner Profile
  • Importer-Exporter Code
  • PAN Card Copy
  • Company Profile/Project Report
  • Lease/Rental Agreement
  • Form 32/Dir-12 (Director details)
  • ROC Form 18/INC-22 (Registered office details)
  • Bank Certificate with AD Code

Basic Compliance Requirements for Non-STPI Units:

Post-Registration Requirements

  • Quarterly & Annual Reporting: Registered Non-STP units must submit periodic reports to STPI. Quarterly & Annual Performance Reports must be submitted to STPI
  • SOFTEX Certification Process: All export contracts must be registered before SOFTEX submission. And Each export contract must be registered before submitting SOFTEX. And No additional charges for SOFTEX registration.
  • Service Charges for Non-STP Units: Based on export turnover (see table below). And SOFTEX must be filed within 30 days from the last invoice date of the month and Charges must be paid in advance based on projected exports.

FAQs on Non-STPI Registration & SOFTEX Certification

What is the processing time for non-STP unit registration?

The registration process takes 10 working days from the date of submission of a complete application form, along with supporting documents and the applicable processing fee.

What are the Service Charges for SOFTEX Certification:

The charge slabs for different export values are predefined by STPI. And The service charges for non-STP units are based on the value of contracts registered. Service charges must be paid upfront during contract registration, based on the contract value and export projections for that year. The payment can be made via Banker’s Cheque, Demand Draft (DD), Account-to-Account Transfer, RTGS, NEFT, Wire Transfer. Service charges depend on export turnover and must be paid in advance. If a SOFTEX form is not certified due to incomplete submission, STPI retains 20% of the service charges paid for that year.

Frequency of SOFTEX submission :

  • A monthly consolidated SOFTEX in Excel format, as prescribed by RBI, can be submitted for all invoices raised in that month.
  • The submission deadline is 30 days from the last invoice date of that month.

Procedure for canceling certified SOFTEX forms: The unit must approach the regional RBI office to get the certified SOFTEX form canceled.

Annual Export Turnover Service Charges (₹)
Up to ₹12.5 Lakhs ₹4,000
₹12.5L – ₹25L ₹8,000
₹25L – ₹50L ₹16,000
₹50L – ₹3 Cr ₹55,000
₹3 Cr – ₹10 Cr ₹1,10,000
₹10 Cr – ₹25 Cr ₹2,25,000
₹25 Cr – ₹50 Cr ₹2,50,000
₹50 Cr – ₹100 Cr ₹3,50,000
₹100 Cr – ₹500 Cr ₹5,75,000
₹500 Cr – ₹1,000 Cr ₹6,00,000
Above ₹1,000 Cr ₹6,50,000

Notes : SOFTEX filing mandatory as per RBI guidelines. 20% of service charges retained in case of non-certification due to incomplete submissions. If the SOFTEX value exceeds the projected slab, additional charges must be paid for the next slab. STPI Units must submit SOFTEX within 30 days from the last invoice date of the month. For Clarifications

  • Email: blr.exim@stpi.in
  • Phone: 080-66186008/6085

What happens if the certified SOFTEX value exceeds the projected value for a particular year?

  • If a Non-STP unit exceeds the registered value slab, it must pay additional charges for the next slab.
  • Any previous payments will be adjusted against the new applicable charges.

What are the penalties for Non-Compliance ?

  • In case Failure to file SOFTEX forms can lead to FEMA penalties up to three times the transaction value. If Continuous non-compliance may result in a ₹5,000 per day penalty.

Do Non-STP units need to submit any reports?

Yes, once registered with STPI, Non-STP units must submit:

  • Quarterly reports
  • Annual reports

Reports should be submitted to the respective STPI center in the prescribed format.

Why is SOFTEX Filing Important?

  • Registered Non-STP units are eligible to submit SOFTEX forms for certification, as per RBI guidelines. However, each export contract must be registered in advance before submitting SOFTEX. SOFTEX.is important due to following reason.
    • Mandatory for foreign exchange tracking by RBI.
    • Required for GST refunds and compliance with FEMA.
    • Helps businesses establish a track record for export credentials in tenders.

How can SOFTEX be submitted?

SOFTEX can be submitted in soft copy or as a hard copy (in quadruplicate) as per RBI guidelines.

Is SOFTEX submission mandatory for non-STP units?

Yes, according to RBI issued Circular, all companies engaged in IT/ITES exports via data communication links must submit SOFTEX for certification. (RBI Master Circular No. RBI/2013-14/14 (dated July 1, 2013, Para B15), RBI Circular No. 80 (dated February 15, 2012)  & RBI Circular No. 43 (dated September 13, 2013)).

How are certified SOFTEX copies distributed?

Once certified, the SOFTEX copies are distributed as follows:

  • Original – Sent to RBI
  • Duplicate – Retained by the unit
  • Triplicate – Sent to the Authorized Dealer (via the unit)
  • Quadruplicate – Retained by STPI for records

Who allots SOFTEX numbers, STPI or RBI?

RBI allots SOFTEX numbers. Both STP and Non-STP units can generate SOFTEX numbers online from the RBI website based on their requirements.

What is the procedure for certifying SOFTEX forms for a Non-STP unit?

  • Each export contract must be registered in advance before submitting SOFTEX against that contract.
  • The unit must also submit its projected imports for the next financial year and pay the applicable STPI service charges.

When should a unit cancel a SOFTEX form?

A SOFTEX form should be canceled if an invoice is not realized due to:

  • Credit notes issued.
  • Penalties imposed by a foreign client.
  • Project cancellation by the foreign client.

In such cases:

  1. The unit must approach the regional RBI office for cancellation approval.
  2. Once RBI approves the cancellation, the unit must report the same to STPI.

What is the time frame for SOFTEX certification by STPI?

STPI certifies SOFTEX within 30 days from the date of submission of a complete SOFTEX form along with the requisite documents.

What happens if a unit fails to submit SOFTEX forms on time to STPI?

In case of a delay, the unit must:

  • Approach the regional RBI office and request condonation of the delay.
  • Submit the required documents as per Annexure-1 (subject to variation across RBI regional offices).
  • Refer to the RBI website (www.rbi.org.in) for specific guidelines.

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