Commerce Ministry Clarifies SOFTEX Filing for SEZ and DTA Transactions

The Ministry of Commerce and Industry issued a clarification regarding the mandatory filing of SOFTEX Forms (Software Export Declaration) for transactions involving Special Economic Zone (SEZ) units and Domestic Tariff Area (DTA) units.

Key Points of the Clarification

SEZ to SEZ Transactions (Not Required): The Ministry clarified that the filing of SOFTEX Forms is not required for invoices raised by one SEZ unit to another SEZ unit. These transactions are typically governed by SEZ-specific rules and do not constitute an ‘export’ in the context of foreign exchange regulations requiring the SOFTEX declaration.
SEZ to DTA Transactions (Required): Conversely, the filing of SOFTEX Forms remains mandatory for transactions involving the supply of IT/ITES (Information Technology/IT-Enabled Services) from an SEZ unit to a unit located in the DTA. This is because supplies from an SEZ to a DTA unit are treated as ‘exports’ or deemed exports from the perspective of the SEZ unit under the Foreign Trade Policy, necessitating the declaration of the foreign exchange realized (or deemed to be realized) through the SOFTEX Form.
Purpose of SOFTEX: The declaration ensures that the Reserve Bank of India (RBI) and the Directorate General of Foreign Trade (DGFT) monitor the realization of foreign exchange earnings for the export of software services.