Ankit Jain (Advocate) – (2026) 39 Centax 58 (Article)
Service exports from India are currently exempted from EDF/Softex compliances under the FEMA laws unlike export of goods & software. Due to non-reporting in either EDF or Softex, the exporters’ remittance is not tracked on EDPMS portal. They are only required to report their invoices to AD Bank only upon realisations.
1. Introduction
Service exports from India are currently exempted from EDF/Softex compliances under the FEMA laws unlike export of goods & software. Due to non-reporting in either EDF or Softex, the exporters’ remittance is not tracked on EDPMS portal. They are only required to report their invoices to AD Bank only upon realisations.
The service exporters in India have always been keen and prompt to realise their export proceeds since their GST refunds are linked to their exports’ realisations. They are well aware of GST consequences for past and future service exports upon non-realisations of export proceeds. Also, they always had the option to issue Credit Note for un-realised exported within due time and write-off such exports both from the books and tax records.
Simultaneously, RBI have been watching from the sidelines and irked on the advantage available to service exports. Hence, RBI initiated a consultation process in 2024 & 2025 to fill-in this compliance gap.
During such consultations, the stakeholders discouraged invoice-wise reporting by the service exporters for various reasons but was rejected by RBI citing compliance under Section 7 of the Foreign Exchange Management Act, 1999.
Also, RBI had a precedent whereby IT-based service exporters in India were filing SOFTEX forms for their exports and had been complying with the FEMA laws.
2. New Regulations for Ease of Business and Process Standardisation
RBI has thus now introduced the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (‘2026 Regulations’) which will replace the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 (‘2015 Regulations’) from 01.10.2026. Till 30.09.2026, the 2015 Regulations will be effective and followed.
The 2026 Regulations are intended to promote ease of doing business especially for MSME exporters and to empower AD Bank for providing efficient service to their customers.
Further, Master Direction – Export of Goods and Services vide FED Master Direction No. 16/2015-16 dated 01.01.2016 and Master Direction – Import of Goods and Services vide FED Master Direction No. 17/2016-17 dated 01.01.2016 along with certain FEMA Circulars will be also be superseded.
The aforesaid supersession of FEMA master directions and circulars shall be replaced with new FEMA directions and circulars in the due time.
3. Requirement of EDF Filing
Under the 2026 Regulations, all service exporters will be required to report and file Export Declaration Form (‘EDF’) for all their export invoices under the FEMA laws apart from other regulatory filings. Similarly, software exporters will be filing EDF instead of Softex forms.
The service exporters will be required to disclose all relevant details of its export invoices in EDF including category of exporter (whether from DTA, EOU, SEZ, etc.), AD code for export realisations, mode of realisation, contract details & date with customer, recipient country, description of services.
The manner of filing such EDF whether physical or digital (on email or portal or CD) is not yet prescribed but shall be prescribed in the due time.
