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Submission to MEITY: Nasscom Raises Industry Concerns and Advocates for Easing export-related FEMA and SOFTEX Compliances
Submission to MEITY: Nasscom Raises Industry Concerns and Advocates for Easing export-related FEMA and SOFTEX Compliances

August 11, 2025

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The recently introduced Draft Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2025 by the Reserve Bank of India (RBI) proposes some additional compliance processes and measures that are perceived as onerous compliance requirements negatively impacting the ease of doing business for service exporters.

In this regard, recognising the industry-wide need for overarching reforms in service exports compliances, Nasscom led the industry consultation with the Ministry of Electronics and Information Technology (MEITY). On Friday, August 1, 2025, we had a meeting with MEITY to discuss issues related to SOFTEX and EDF, along with other compliance related challenges.

This consultation facilitated broad-based feedback from software and service exporters to help shape a more modern, seamless regulatory framework. Our primary suggestion to the government was to maintain a single integrated portal for export certifications and reduce duplication of filings.

Why Compliance Reform Is Essential?

Under the existing regime, software exports are reported using a separate form called SOFTEX, administered by the Software Technology Parks of India (STPI). This form is tailored to the nature of software exports digital delivery, recurring billing, and no physical movement of goods.

However, the RBI has proposed an Export Declaration Form (EDF) for software exports. This move risks increasing the paperwork and complexity for software exporters, many of whom already navigate multiple overlapping systems including GST, STPI, EDPMS, and AD Banks. Without thoughtful streamlining, this could add costs, create delays, and disrupt the smooth flow of service export revenues.

Our Key Recommendations: A Smarter Compliance Framework

  1. Unifying Compliance Through the GST Portal

We recommended integrating the SOFTEX framework into the GST system - the single platform already used by all software exporters to file returns (GSTR-1 and GSTR-3B). With a few enhancements to capture export-specific data, the GST portal can serve as a single digital window for all export reporting and certifications.

Benefits:

  • Eliminates duplicate filings and reconciliations
  • Ensures consistent, real-time export data
  • Saves time and compliance costs
  • Improves regulatory oversight and auditability

Further, as a transitional arrangement, we have suggested the government to continue with SOFTEX rather than introducing a new EDF form as the industry is already using SOFTEX and is well aware of its requirements.

  1. Extend Submission Timelines for Practical Compliance

Under the draft Regulations, documentation for services must be submitted within 21 days of invoice issuance. For large enterprises managing global invoices, this is too narrow. We suggested that a more feasible timeline: 30 days from the end of the invoice month maintaining accountability without overwhelming exporters.

  1. Remove Invoice Value Limits

The proposed EDF restricts consolidated invoice filings to ₹1 lakh, which is highly impractical. We have recommended for removing this value-based cap and suggests that limits (if any) should be based on the number of forms, not invoice amounts aligning the process with operational realities.

  1. Reframe the Cap on Advance Payments

Many large software projects require full advance payments exceeding ₹25 crore. A one-size-fits-all cap doesn’t reflect the scale and diversity of India’s tech exporters. In its submission, we advocated for a flexible threshold so that it caters to the wider IT industry.

Additionally, in our submissions, we also highlighted the need to streamline the entire process and avoid multiple filings of similar nature.

  1. Clarifications Needed in the Draft Regulations

Shifting the responsibility of export certification to AD Banks without a clear framework or defined fees may result in slower processing, increased costs, and procedural confusion. Thus, we urged that the existing SOFTEX framework continue during the transition and that overlapping obligations be avoided. We also recommended that RBI issue clear implementation guidelines so that legitimate third-party payments are routinely accepted by banks.

For more details, kindly write to: vertika@nasscom.in and ayush@nasscom.in with a copy to policy@nasscom.in.  


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Ayush Raj
Associate - Public Policy

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