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Export
of software and Law.
As
per the survey of National Association of Software and Service Companies
( Nasscom) , Indian software export have grown 57% to Rs.17150 crore
($4bn) in 1999-2000.
The projections show a substantial growth in the exports from India.
The software export includes onsite software development , offshore
software development , consultancy services, Software implementation
services etc.
We in this article will discuss the provisions of laws which one
must know to comply and the importance of Importer-Exporter Code
Number and softex form and other declarations.
Some of the relevant provisions of Acts and regulations that we
will cover here are:
1. Foreign Exchange Management Act 2000( FEMA ),
2. Foreign Exchange Management (Export of goods and services) Regulations,
2000,
3. The Foreign Trade( Development and Regulation) Act 1992,
4. Export and Import Policy for the period 1997-2002 (EXIM policy),
5. Hand Book of Procedures Vol-I
EXPORT AND SOFTWARE DEFINED:
Under Foreign Exchange Management (Export of goods and services)
Regulations, 2000 :
U/s2(iv)'export' includes the taking or sending out of goods
by land, sea or air, on consignment or by way of sale, lease, hire-purchase,
or under any other arrangement by whatever name called, and in the
case of software, also includes transmission through any electronic
media ;
(viii)'software' means 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 ;
Under EXIM POLICY
3.19 "EOU" means Export Oriented Unit.
3.20 "EPZ" means Export Processing Zone.
3.22 "Exporter" means a person who exports or intends
to export and holds an
Importer-Exporter Code number.
3.31 "Manufacture" means to make, produce, fabricate,
assemble, process or bring into existence, by hand or by machine,
a new product having a distinctive name, character or use and shall
include processes, such as refrigeration, repacking, polishing,
labelling and segregation. Manufacture, for the purpose of this
Policy, shall also include agriculture, aquaculture, animal husbandry,
floriculture, horticulture, pisciculture, poultry, sericulture,
viticulture and mining.
3.32 "Manufacturer Exporter" means a person who exports
goods manufactured by him or intends to export such goods.
3.33 "Merchant Exporter" means a person engaged in trading
activity and exporting or intending to export goods.
3.37 "Person" includes an individual, firm, society, company,
corporation or any other legal person.
3.47 "Services" include all the tradeable services covered
under General Agreement on Trade in Services and earning free foreign
exchange.
3.48 "Service Provider" means a person providing
(i) supply of a "service" from India to any other country;
(ii) supply of a "service" from India to the service consumer
of any other country in India; and
(iii) supply of a "service" from India through commercial
or physical presence in the territory of any other country.
Importer-Exporter
Code Number (IEC No)
U/s 7 of the Foreign Trade( Development and Regulation) Act 1992
No person shall make any import or export except under an Importer-Exporter
Code Number (IEC No) granted by the Director General of Foreign
Trade.
Application for Grant of IEC No.
Handbook rule no 4.7
An application for grant of IEC number shall be made by the Registered/
Head Office of the applicant to the licensing authority concerned,
in the form specified in Appendix-2A
and shall be accompanied by documents prescribed therein.
S/5.Indication of importer-exporter code number :-
The importer-exporter code number allotted by the Director General
of Foreign Trade under Section 7 of the Foreign Trade (Development
& Regulation) Act, 1992 (22 of 1992) shall be indicated on
all copies of the declaration forms submitted by the exporter
to the specified authority and in all correspondence of the exporter
with the authorised dealer or the Reserve Bank, as the case may
be.
Declaration
as regards export of goods and services :-
[Under s/3 of the Foreign Exchange Management (Export of goods and
services) Regulations, 2000]
(1)Every exporter of goods or software in physical form or through
any other form, either directly or indirectly, to any place outside
India, other than Nepal and Bhutan, shall furnish to the specified
authority, a declaration in one of the forms set out in the Schedule
and supported by such evidence as may be specified, containing true
and correct material particulars including the amount representing
-
(i)the full export value of the goods or software; or
(ii) if the full export value is not ascertainable at the time of
export, the value which the exporter, having regard to the prevailing
market conditions expects to receive on the sale of the goods or
the software in overseas market, and affirms in the said declaration
that the full export value of goods (whether ascertainable at the
time of export or not) or the software has been or will within the
specified period be, paid in the specified manner.
(2)Declarations shall be executed in sets of such number as specified.
(3)For the removal of doubt, it is clarified that, in respect of
export of services to which none of the Forms specified in these
Regulations apply, the exporter may export such services without
furnishing any declaration, but shall be liable to realise the amount
of foreign exchange which becomes due or accrues on account of such
export, and to repatriate the same to India in accordance with the
provisions of the Act, and these Regulations, as also other rules
and regulations made under the Act.
U/s 4.interalia Exemption is provided :
export of goods or services may be made without furnishing the declaration
in the following cases, namely:
d) goods or software accompanied by a declaration by the exporter
that they are not more than twenty five thousand rupees in value;
TYPES OF DECLARATIONS :
Form GR
To be completed in duplicate for export otherwise than by Post including
export of software in physical form i.e. magnetic tapes/discs and
paper media.
Form SDF
To be completed in duplicate and appended to the shipping bill,
for exports declared to Customs Offices notified by the Central
Government which have introduced Electronic Data Interchange (EDI)
system for processing shipping bills notified by the Central Government.
Form PP
To be completed in duplicate for export by Post.
Form SOFTEX
To be completed in triplicate for declaration of export of software
otherwise than in physical form, i.e. magnetic tapes/discs, and
paper media.
s/6.Authority to whom declaration is to be furnished and the
manner of dealing with the declaration :-
A.Declaration in Form GR/SDF
(1)(i)The declaration in form GR/SDF shall be submitted in duplicate
to the Commissioner of Customs.
(ii)After duly verifying and authenticating the declaration form,
the Commissioner of Customs shall forward the original declaration
form/data to the nearest office of the Reserve Bank and hand over
the duplicate form to the exporter for being submitted to the authorised
dealer.
B.Declaration in Form PP
(2)(i)The declaration in form PP shall be submitted in duplicate
to the authorised dealer named in the form.
(ii)The authorised dealer shall, after countersigning the declaration
form, hand over the original form to the exporter who shall submit
it to the postal authorities through which the goods are being despatched.
The postal authorities after despatch of the goods shall forward
the declaration form to the nearest office of the Reserve Bank.
C. Declaration in Form SOFTEX
(3)(i)The declaration in form SOFTEX in respect of export of computer
software and audio/video/television software shall be submitted
in triplicate to the designated official of Department of Electronics
of Government of India at the Software Technology Parks of India
(STPIs) or at the Free Trade Zones (FTZs) or Export Processing Zones
(EPZs) in India.
(ii)After certifying all three copies of the SOFTEX form, the said
designated official shall forward the original directly to the nearest
office of the Reserve Bank and return the duplicate to the exporter.
The triplicate shall be retained by the designated official for
record.
D.Submission of duplicate declaration forms to the Reserve Bank
On realisation of the export proceeds, the authorised dealer shall,
after due certification, submit the duplicate of the GR/SDF, PP
or as the case may be, SOFTEX form to the nearest office of the
Reserve Bank.
S/10.Export on Elongated Credit Terms :-
No person shall enter into any contract to export goods on the terms
which provide for a period longer than six months for payment of
the value of the goods to be exported :
Provided that the Reserve Bank may, for reasonable and sufficient
cause shown, grant approval to enter into a contract on such terms.
© Zarana Khona 2000. zarana@indiaitlaw.com
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