We had published a Blog in 2016 on Sofex form confusion. It became one of the most-read pieces on our blog. Read here for ready reference.
Since then, we have been exhorting the Government to remove the Softex and, more specifically, after GST came into existence. Softex forms have been replaced by RBI in a recent notification with a single form called the Export Declaration Form (EDF), for both Goods and Services. This Blog helps you decipher the Gazette Notification No. FEMA 23(R)/2026-RB given here (Click to read) dated 13 Jan 2026.
While we have been advocating for bold reform by the RBI and related foreign trade regulators, the RBI has delivered only on one part. A 100% digital transformation of regulatory systems could help India move from the 6-7% growth bracket to the 9-10% growth bracket. Unfortunately, the current policy step misses this opportunity. We hope there will be corrections to adopt a bold stance soon.
We have analysed below what this current notification has in store for the exporters in the Software or Services sector from October 01, 2026, the date when this notification comes into force.
What does it mean for the software sector?
Is Softex abrogated?
The Softex form will not exist from 1st October 2026, but the export declaration will remain. RBI has mandated one single form known as the export declaration form (EDF). All goods and services (including Software) exporters will file EDF forms.
Is it still mandatory to get STPI certification?
RBI, through this notification, now recognises Authorised dealers as “Specified Authority” at par with STPI in DTA. Hence, STPI certification will not be mandatory, and Software, IT, or ITeS businesses in DTA will have the option to get it certified by bankers after 1 October 2026.
However, if an authorised dealer, i.e. your bank, wants STPI or SEZ to certify, then it may not be possible to bypass STPI. So this remains to be clarified after the banks notify their process, as the RBI has left the process to the banks.
Software definition
RBI has issued an interim relief earlier, asking IT-Enabled Services to be exempted from STPI /SEZ certification and to directly file with banks under the purpose code P802. This relief had come very recently, less than a year ago. Why code 802 came into existence is not known in the public domain.
The notification defines “Software” as “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.”
It is a very ambiguous definition, and it seems to include everything intangible. Effectively, this means only services that are delivered physically onsite in a cross-border geography will be out of the scope of this definition. After this notification, the distinction between Software, IT Services, and IT-enabled services will vanish. There is no clarity in the use of the purpose code in the notification. Perhaps this will evolve into standard operating procedure by banks in future and remove some of the anomalies.
It would have been better to accommodate this for the clear classification and separate purpose code for the following, or a way to map it with HSN and Service Accounting Code (SAC) as used by CBIC.
What and who is a specified Authority?
The notification does not define ‘specified officer’ but names them. The way this is defined will still keep some confusion alive.
| (i) Commissioner of Customs in the Domestic Tariff Area (DTA) and Development Commissioner of Special Economic Zone (SEZ) in SEZ, for goods; |
| (ii) An Authorised Dealer in DTA and Development Commissioner of Special Economic Zone (SEZ) in SEZ, for services other than software; and |
| (iii) An Authorised Dealer or Software Technology Parks of India (STPI) in DTA, and Development Commissioner of Special Economic Zone (SEZ) in SEZ, for software. |
Only RBI can clarify why they used ‘and’ as a connector in (i) and (ii) and why they used an ‘or’ in (iii).
For now, it means that for Software as defined in the notification, it is either an Authorised Dealer or STPI in the Domestic Tariff Area (i.e. units not in SEZ) and an Authorised dealer or DC SEZ in a Special Economic Zone.
Conclusion
The Software or IT and ITeS businesses will file the new EDF instead of the SOFTEX form after 1st of October 2026. The DTA units have an option to get EDF certified by Authorised Dealers (your bank) or STPI, and Authorised Dealers (your bank) or DC SEZ in a Special Economic Zone.
All services exporters other than Software must now file an export declaration. This is a change, as earlier services exporters other than Software (IT and IT-enabled) services did not need to file an export declaration.
The operating process is largely left to Authorised Dealers, hence the Banks’ digital transformation in this area becomes the key, and what process the Banks adopt will be critical to ease of doing in business as the notification on its applicability after 1st October 2026.
Disclaimer: The write-up here and ideas expressed should not be construed as legal advice. This is written with the industry practitioners’ approach on policy implications for the Software sector, for the purpose of benefiting the Industry members.
