Ok, so I am seeing a lot of posts / news item with headlines that make it look like the RBI / Government wants to wipe all export based startups off the face of the planet. Folks, please calm down. Here’s the A-B-Cs of what that really means:
1) You’ve got to understand that if the RBI / Government wanted to wipe you out, they would’ve done it already.
2) Wiping out export based startups is like shooting your best striker in the foot. Why would India, a country with trade deficit want to make life harder for the people who are helping reduce the trade deficit?
3) The circular was issued in September 2013. It’s a year old already. Please factor that in too.
Now down to some specifics:
1) Firstly, it’s a myth that everyone has to get STPI certification. Only those companies that are registered with STPI have to get STPI certification. STPI is already in it’s sun-set era. The 10 year exemption is over and it has no jurisdiction over companies not registered with it.
2) The intention is to gather information on foreign exchange inflow into the country. Not to control it.
3) The reason it hasn’t been actively enforced yet is that this foreign exchange inflow related information is already supplied by banks to RBI monthly so whatever information you will be supplying is only corroborative.
4) What needs to be done is that you must download a form called “SOFTEX” from the RBI website, fill it up with basic information, sign it and then either submit it to your banker or upload on RBI website. There isn’t too much clarity on this.
Just to clarify, this is to the best of my knowledge. To be 99% sure, I have confirmed this with three other seasoned RBI / Tax practitioners.
So folks, please relax. There’s no need to arrive at massive conclusions based on the media reports!
Guest Post by Jaydeep Halbe, Halbe Innovations