FEMA compliance for export of services: eFIRC and Softex

Your export-of-services payment setup is FEMA compliant when four things hold, stated as at 6 October 2026. Each month’s invoices are declared to your AD bank (or to STPI for software) on the Export Declaration Form within 30 days of month end. The full invoice value reaches India within nine months of the invoice date, twelve if you invoice or settle in rupees. Your bank matches each receipt to the declaration in EDPMS and closes the entry. Any gap between invoice and receipt, whether chargeback, refund or platform fee, goes to the bank as a reduction in export realisation.

Softex is the form this regime retired on 1 October 2026. Stripe, a payment aggregator or a merchant of record changes who pays you and in what currency, not who files. The Indian exporter files.

This page covers an Indian company exporting software or other services, the question behind “fema compliance for export of services” and “merchant of record india”. Registering a US company from India covers the Stripe entity question; LRS vs ODI covers a founder’s shares in a foreign company.

What changed on 1 October 2026

The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) were notified on 13 January 2026, gazetted on 15 January 2026 and took effect on 1 October 2026, superseding the 2015 Regulations. A.P. (DIR Series) Circular No. 20 of 16 January 2026 withdrew the export and import Master Directions and 96 circulars from the same date, including the five SOFTEX circulars issued from 25 October 2001 to 5 November 2015, the declaration-form circular of 13 September 2013 and the EDPMS circular of 26 May 2016; RBI references now go through the PRAVAAH portal via your bank. A notification of 22 September 2026 (gazetted 24 September 2026) amended the Regulations before they applied, cutting the realisation period from fifteen months to nine and the rupee-settled period from eighteen to twelve.

Three things from the old order are gone. The SOFTEX form, filed with STPI, EPZ, FTZ or SEZ within 30 days of the invoice or the month’s last invoice (Master Direction paragraph B.5), is replaced by the EDF, with STPI kept as a specified authority alongside the AD bank after consultation feedback. The position that non-software services needed no declaration (Regulation 3(3) of the 2015 Regulations) ended when RBI refused that exemption by reference to section 7 of FEMA. And the write-off caps (5 percent of the prior year’s realised proceeds for self write-off, 10 percent for Status Holders or by the AD bank, paragraph C.23.1) and the goods-only refund rule (paragraph D.2) give way to Regulation 6.

The monthly cycle for an Indian SaaS exporter

Declare. Regulation 3(2): file an EDF with the specified authority within 30 days from the end of the month of invoice. One EDF can cover every export and recipient in the month, non-software services may be declared on or before payment is received, and the AD bank can extend the period. The Annex form lists Internet as a delivery mode. The specified authority is the AD bank for services other than software, the AD bank or STPI for software, and the Development Commissioner inside an SEZ (Regulation 2(1)(f)).
Realise. Regulation 5(1)(a): the full export value is realised and repatriated within nine months from the invoice date, twelve where invoiced or settled in rupees, with AD bank extensions available without RBI approval. Repatriation means arrival in India through an AD bank: Regulation 4(2) of the FEM (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2015 deems you to have repatriated when you receive rupees in India from an overseas bank’s or exchange house’s account with an AD bank; a balance left in an overseas platform wallet is not repatriated. Where proceeds stay unrealised more than a year past the due date, Regulation 13 restricts further exports to full advance or an irrevocable letter of credit.
Close. Regulation 4(2): the AD bank credits the proceeds after satisfying itself of genuineness and closes the EDPMS entry at the same time; for invoices up to Rs 10 lakh the bank may close the entry on your own declaration. The bank enters the services EDF in EDPMS within five working days (Regulation 18(1)). Until 30 September 2026 the eFIRC was the bank’s electronic record of an inward remittance reported into EDPMS under the 26 May 2016 circular, never an RBI certificate; the 2026 text does not use the term, so ask your AD bank what it now issues.
Reconcile the gaps. Regulation 6 lets the AD bank allow a reduction in realisation where you cite reasons and it is satisfied; up to Rs 10 lakh per invoice the bank may permit it on your own declaration. Regulation 7 allows set-off of export receivables against import payables with the same overseas counterparty or its group within the realisation period. Regulation 8 allows third-party receipts where the bank is satisfied of bona fides, so a payout from an entity other than the one you invoiced is a bank question, not an RBI application. Regulation 19 forbids any charge or penalty on the exporter for a regulatory delay.

Stripe, payment aggregators and the PA-CB rules

Most SaaS exporters are paid through a payment aggregator, not a wire. The operative text is RBI’s Master Direction on Regulation of Payment Aggregators of 15 September 2025, which defines a cross-border payment aggregator (PA-CB) as one aggregating cross-border current account payments for its onboarded merchants through e-commerce mode; collecting export receipts is the inward sub-category. Paragraph 11(d) caps each PA-CB transaction at Rs 25 lakh, so larger invoices come by wire. Paragraph 11(h) obliges the PA-CB to give you the documents your AD bank needs to close the EDPMS entry, so closure stays your responsibility. Paragraph 11(i) permits non-rupee settlement only for exporters the PA-CB onboarded directly; an exporter reached through an overseas marketplace or merchant of record is settled in rupees. Paragraph 16(h) routes refunds back through the escrow account unless you manage them directly and have told the payer, and leaves card chargeback rights unaffected, so a chargeback reduces your realised export value.

RBI’s list of authorised payment system operators dated 30 September 2026 shows 36 PA-CB holders; Stripe India Private Limited appears only as an online payment aggregator (PA-O), authorised 15 January 2024, with no PA-CB entry. Stripe’s own documentation, read 6 October 2026, says each Indian account carries one RBI purpose code (P0802 and P0807 are its examples), payouts arrive in rupees with international payouts labelled separately, and Standard Chartered Bank emails a payment advice listing the export charges on payout day. That advice is your starting document for EDPMS closure and GST; how the payment is routed under the PA-CB text is a question for Stripe and your AD bank, and it does not change what you file.

Merchant of record in India: who is exporting to whom

We found no Indian statute, RBI regulation or GST circular that defines a merchant of record, as at 6 October 2026, so the label settles nothing; the contract does. In the usual model an overseas company resells your software to end users in its own name, bills and collects from them, carries their refunds and chargebacks, and pays you a net amount on a periodic statement. On that model the reseller is your customer: your export is a supply to it, your EDF names it, the nine-month realisation clock runs from your invoice date, and its sales to end users are its own business. Verify your agreement against that description before you file on it; some products sold as merchant of record are payment aggregation under another name.

Schedule A · Three ways an Indian SaaS exporter gets paid, and what each does to the file, as at 6 October 2026
Point	Direct wire from the customer	Cross-border payment aggregator (PA-CB)	Merchant of record (overseas reseller)
Your customer of record	The end customer	The end customer; the aggregator only collects	The reseller, if the contract makes it the buyer (verify)
Settlement currency and cap	Foreign currency or rupees; no cap	Rupees unless the PA-CB onboarded you directly; Rs 25 lakh per transaction	As contracted by wire; rupees and the Rs 25 lakh cap if routed through a PA-CB
EDPMS closure evidence	The bank’s inward remittance record	The PA-CB’s documents plus the bank’s record	The reseller’s statement plus the bank’s record; ask your AD bank what it accepts
Chargebacks, refunds, fees	Regulation 6 reduction	Refunds through escrow unless you manage them directly and have told the payer; chargeback rights unaffected; the shortfall goes to the bank as a Regulation 6 reduction	The reseller nets its fee and carries end-user chargebacks; invoice net or take the deduction to the bank under Regulation 6
GST on your supply	Zero-rated export where section 2(6) is met	Zero-rated export where section 2(6) is met	Zero-rated export to the reseller where section 2(6) is met; its resale to Indian consumers is likely its own OIDAR supply under section 14(1) (verify against current text)

If the overseas entity collecting your revenue is one you or your Indian company own, three other pages take over: LRS vs ODI for the shareholding, round-tripping and the two-layer rule for the structure, and intercompany agreements and transfer pricing for the agreement and the Form 48 report.

GST runs on the same clock

Export of services is a zero-rated supply under section 16(1) of the IGST Act. Qualifying turns on section 2(6), whose clause (iv) requires payment in convertible foreign exchange or in Indian rupees wherever RBI permits; CBIC Circular 202/14/2023-GST of 27 October 2023 confirms that rupees through Special Rupee Vostro Accounts qualify. Place of supply defaults to the recipient’s location (section 13(2)). The regimes meet in CGST Rule 96A(1)(b): an exporter under LUT pays IGST with interest if payment is not received within fifteen days after one year from the invoice, or after the FEMA realisation period including any RBI-permitted extension, whichever is later. Whether an extension your AD bank grants under Regulation 5 counts as one permitted by RBI for Rule 96A is not settled in any CBIC text we found; verify with your GST adviser before relying on it. An unrealised portion, even one your bank has allowed as a Regulation 6 reduction, may still trigger Rule 96A; verify the GST position. Two more points to verify against current text: clause 141 of the Finance Bill 2026 proposed omitting section 13(8)(b), the intermediary place-of-supply rule; the Bill became the Finance Act, 2026 (4 of 2026), published 30 March 2026, so confirm the enacted section and its commencement if your arrangement looks like intermediation; and under section 14(1) an overseas supplier of OIDAR services to non-taxable online recipients in India is itself liable for IGST, the reseller’s problem when it sells your product to Indian consumers.

An IEC is mandatory for goods but, under paragraph 2.05 of the Foreign Trade Policy 2023, needed for services only to claim FTP benefits. The eBRC is DGFT’s record, not the bank’s: banks push inward remittance messages to DGFT and exporters self-certify their eBRCs (Trade Notice 33/2023-24 of 10 November 2023; a mode of export field for services was added on 21 April 2025). The eBRC serves FTP benefits; the bank’s EDPMS record serves FEMA.

Who does what on the retainer

This is a monthly cycle, not a one-off opinion, so it sits on the fractional general counsel retainer. On the retainer Infinilex’s in-house chartered accountant and company secretary capacity runs the EDF, EDPMS and GST reconciliation, and Infinilex counsel qualified in India sign the FEMA positions and prepare the reduction, set-off, third-party receipt and extension requests your company puts to the AD bank. The dates sit beside the ROC and tax deadlines on the India compliance calendar; a missed filing on the capital side runs through FEMA, ODI and LRS compliance. STPI certification remains open to software exporters who want it; STPI’s own charges are set out in its Non-STP unit FAQ and are not Infinilex fees.

Frequently asked questions

Is Softex still required for SaaS exports from India?

Not for exports invoiced from 1 October 2026. For September invoices still inside the old 30-day window, ask your STPI centre or AD bank which form it will take. The 2026 Regulations replaced Softex with a single Export Declaration Form for goods and services, filed with the AD bank or STPI within 30 days from month end, and A.P. (DIR Series) Circular No. 20 withdrew every SOFTEX circular from the same date. Under Regulation 20 any pre-October export that once needed RBI approval now goes to the AD bank.

What is an eFIRC and do I need one for every Stripe payout?

Until 30 September 2026 an eFIRC was the electronic record of an inward remittance that AD banks reported into EDPMS under a 2016 RBI circular. It is a bank record, not an RBI certificate. The 2026 text does not use the term, so ask your AD bank what it now issues. Under the 2026 Regulations every export remittance is entered in EDPMS and closed against your declaration, so each payout must be matched to an invoice, and a cross-border payment aggregator must give you the documents the bank needs. For invoices up to Rs 10 lakh the bank may close the entry on your own declaration.

Indian company receiving USD via a merchant of record: what filings are needed?

Four things. A monthly Export Declaration Form, filed within 30 days of month end, naming the reseller as recipient if your contract makes it the buyer (verify the agreement first). Realisation of the full invoiced value within nine months of the invoice date (twelve if settled in rupees), any fee shortfall going to your bank as a Regulation 6 reduction unless the invoice is already net. EDPMS closure of each receipt, typically against the reseller's statement and the bank's record; ask your AD bank what it accepts. And for GST, a zero-rated export to the reseller where section 2(6) is met.

How are chargebacks and refunds handled under FEMA for a SaaS exporter?

As a reduction in export realisation under Regulation 6 of the 2026 Regulations: you ask your AD bank citing the reason and it may allow the reduction if satisfied; up to Rs 10 lakh per invoice the bank may permit it on your own declaration. Where a payment aggregator collected the money, refunds flow back through its escrow account unless you manage refunds directly and have told the payer, and the customer's chargeback rights are untouched, so its statement is your evidence. Check the unrealised portion against Rule 96A as well; a FEMA reduction does not by itself settle the GST position.

Does Infinilex handle export-of-services FEMA compliance for an Indian SaaS company?

Yes, as a monthly cycle on the fractional general counsel retainer rather than a one-off opinion. Infinilex's in-house chartered accountant and company secretary capacity runs the Export Declaration Form, EDPMS and GST reconciliation, and Infinilex counsel qualified in India sign the FEMA positions and prepare the reduction, set-off, third-party receipt and extension requests your company puts to the AD bank. Infinilex is a legal, compliance and structuring consultancy with offices in Noida, New York and Dubai. Email is answered within one working day.

Next step

Exporting software or services from India?

Send us three things: how customers pay you (wire, aggregator or merchant of record), which AD bank you use, and when your current setup started. We will tell you what the file should contain under the 1 October 2026 text and what is open.

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Thirty minutes with Prashant Sharma, the founder, who does the work himself. You leave with next steps either way. Email is read by the founder and answered within one working day.

FEMA compliance for export of services: eFIRC, Softex, merchants of record and chargebacks for Indian SaaS exporters