Are start-up complaints on RBI’s software export forms justified?
Mumbai: On Thursday, the Economic Times reported a peculiar problem that the Indian start-up community is faced with and how that is turning into a nightmare.
The problem, as the report states, is that start-ups are required to fill the so-called software-export (SOFTEX) form for each individual export transaction and submit four copies of it, as mandated by the Reserve Bank of India (RBI). The mounting paperwork becomes too much for a nimble start-up to manage and therefore is leading to logistical issues.
An unnamed start-up executive was even quoted as saying that owing to the large number of invoices his company generates each month, he may need to employ someone solely to fill these forms and hire a truck to deliver them to the respective authorities.
Such a struggle, you’d think. In fact, the story generated some level of outrage over Twitter from those who understand the intricate nature of bureaucratic paper work.
@RMantri: It’s dumb, lazy and braindead regulations like these that destroy productivity for startups. http://j.mp/1gPpaOJ Drowned in paperwork.
@Kulpreetyadav: To fill forms for even $1 overseas sales by #startups is a serious headache. RBI needs to fix ceiling/ monthly form. http://m.economictimes.com/small-biz/startups/startups-balk-at-rbis-2013-circular-on-software-export-forms/articleshow/48180370.cms …
@nasscom: @RBI’s guideline of filling 4 copies of export form makes it difficult for #startups. We need the old cap of giving leeway upto 25K $ back.
But then we did a little digging into the dreaded SOFTEX that is eating away at the precious time of our start-up software exporters. Turns out, the paperwork isn’t as bad as it is made out to be. The following are a few facts we figured from just a basic reading of RBI’s guidelines in this matter.
•The requirement to fill such a form before any export transaction has been in practice since May 2000, when the first such form was introduced. This was applicable to any company which exported goods, including software, irrespective of the amount involved.
•In February 2012, RBI had allowed companies which file more than 600 SOFTEX forms a year to submit their papers on a monthly basis, rather than in individual transactions. This was specifically done to aid companies which recorded high volumes of export transactions in their business.
•The SOFTEX form in itself is a simple two-page form which requires the exporters to fill in details regarding the nature of the product being exported, their customers, the bank facilitating the financial transaction, the amount in the invoice and a few other essential details.
•The details of the form can also be filled on an excel sheet and submitted online to the nearest Software Technology Parks of India (STPI) in case of exporters who generate more than 600 SOFTEX forms annually. The STPI would then be responsible for sending copies to whoever is next on the mailing list. Any additional clarifications that the STPI might require regarding the transaction can be addressed within 30 days of the query from the agency.
Thus, managing paperwork for export transactions (which exporters are legally required to report to RBI) sounds less like a dreadful task and more like basic hygiene that a company dealing with foreign buyers would ensure in any case.