Regarding legal compliance on export of software
This query is : Resolved
29 May 2012
I am preparing software accoding to the requirements of clients at abroad. I am sending the same it via e mail and get the sale proceeds in usd.
What r the legal complinace which i needs to do for the above mentioned transaction
What r the legal complinace which i needs to do for the above mentioned transaction
29 May 2012
Statutory Complaince for STP Units
**********************************
Important statutory compliance for STP units are listed below as reference
Accounts :
********
Each of such unit is required to maintain separate accounts for its operations. Separate annual balance sheet will have to be made for each such unit which would be become a part of the main balance sheet of the company. For maintaining separate accounts the following will have to be done:
Maintenance of Separate Cash & Bank book and corresponding vouchers.
Maintenance of sales invoices.
Maintenance of Fixed Assets register.
Maintenance of Foreign Inward Remittance Certificate file (FIRC's) & Bank Realisation Certificate file where the original of the FIRC's and BRCs are kept.
Maintenance of contract file, where copies of contracts received from buyers are maintained.
Preparation of yearly balance sheet for the unit which would ultimately become a part of the balance sheet of the company.
Banking :
*******
Each unit is required to maintain separate bank accounts for its operations. The units is free to have as many bank accounts as it desires but shall have to designate a single branch of bank whom all export documents will be submitted. In other words the work of handling of all shipping documents and realisation of export proceeds will have to be entrusted to this designated bank branch.
bonding and debonding
*********************:-
Bonding is done through a document B-17 Bond which is an agreement of the STPI unit with the Development Commissioner of the STPI. This documents binds the unit for importing duty free procurement against export. Debonding of a unit is to releive itself from this liability and pay applicable duty (if required)
The compliances are related to service tax,VAT,Customs and Direct tax and with STPI authorites.
Pls visit www.stpi.in for details
**********************************
Important statutory compliance for STP units are listed below as reference
Accounts :
********
Each of such unit is required to maintain separate accounts for its operations. Separate annual balance sheet will have to be made for each such unit which would be become a part of the main balance sheet of the company. For maintaining separate accounts the following will have to be done:
Maintenance of Separate Cash & Bank book and corresponding vouchers.
Maintenance of sales invoices.
Maintenance of Fixed Assets register.
Maintenance of Foreign Inward Remittance Certificate file (FIRC's) & Bank Realisation Certificate file where the original of the FIRC's and BRCs are kept.
Maintenance of contract file, where copies of contracts received from buyers are maintained.
Preparation of yearly balance sheet for the unit which would ultimately become a part of the balance sheet of the company.
Banking :
*******
Each unit is required to maintain separate bank accounts for its operations. The units is free to have as many bank accounts as it desires but shall have to designate a single branch of bank whom all export documents will be submitted. In other words the work of handling of all shipping documents and realisation of export proceeds will have to be entrusted to this designated bank branch.
bonding and debonding
*********************:-
Bonding is done through a document B-17 Bond which is an agreement of the STPI unit with the Development Commissioner of the STPI. This documents binds the unit for importing duty free procurement against export. Debonding of a unit is to releive itself from this liability and pay applicable duty (if required)
The compliances are related to service tax,VAT,Customs and Direct tax and with STPI authorites.
Pls visit www.stpi.in for details
20 July 2025
Yes, even for export of software services, an Import Export Code (IEC) is mandatory, unless you fall under a specific exemption (such as service exports via RBI’s SOFTEX mechanism under STPI/SEZ).
✅ Here’s a breakdown of compliance requirements for software exporters like you:
1. Import Export Code (IEC) – Mandatory
Issued by: Directorate General of Foreign Trade (DGFT)
Requirement: Anyone exporting goods or services outside India (including software via email/cloud) must obtain an IEC, even if it’s for software and even if no physical goods are shipped.
Exemption: If registered under STPI or SEZ and submitting SOFTEX forms regularly, you may not need IEC for specific cases — but it's safer and more compliant to get it.
2. SOFTEX Form Filing (For Software Exports)
Filed with: STPI (Software Technology Parks of India) or SEZ authority.
Purpose: Declare value of software exports and certify realization of foreign exchange.
Mandatory: If you’re exporting software and want to be 100% compliant with RBI FEMA norms.
3. GST Compliance
If registered under GST:
Export of software qualifies as export of service (zero-rated).
You can export without payment of tax under LUT or with payment and claim refund.
File GSTR-1 (with invoice details) and GSTR-3B monthly.
4. FIRC/BRC (Foreign Exchange Compliance)
FIRC – Foreign Inward Remittance Certificate (issued by your bank when USD payment comes in).
BRC – Bank Realization Certificate (based on FIRC, used for export proof and refund claims).
5. Income Tax
Declare foreign income under "Income from Business/Profession".
Maintain books of accounts as required under Section 44AA.
Consider Section 10AA if in SEZ for deductions.
✅ Here’s a breakdown of compliance requirements for software exporters like you:
1. Import Export Code (IEC) – Mandatory
Issued by: Directorate General of Foreign Trade (DGFT)
Requirement: Anyone exporting goods or services outside India (including software via email/cloud) must obtain an IEC, even if it’s for software and even if no physical goods are shipped.
Exemption: If registered under STPI or SEZ and submitting SOFTEX forms regularly, you may not need IEC for specific cases — but it's safer and more compliant to get it.
2. SOFTEX Form Filing (For Software Exports)
Filed with: STPI (Software Technology Parks of India) or SEZ authority.
Purpose: Declare value of software exports and certify realization of foreign exchange.
Mandatory: If you’re exporting software and want to be 100% compliant with RBI FEMA norms.
3. GST Compliance
If registered under GST:
Export of software qualifies as export of service (zero-rated).
You can export without payment of tax under LUT or with payment and claim refund.
File GSTR-1 (with invoice details) and GSTR-3B monthly.
4. FIRC/BRC (Foreign Exchange Compliance)
FIRC – Foreign Inward Remittance Certificate (issued by your bank when USD payment comes in).
BRC – Bank Realization Certificate (based on FIRC, used for export proof and refund claims).
5. Income Tax
Declare foreign income under "Income from Business/Profession".
Maintain books of accounts as required under Section 44AA.
Consider Section 10AA if in SEZ for deductions.
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