27 August 2021
We did export of software via datacom channel to Iran to Party A on 30/08/2015 for USD 1000 and payment received via Paypal, another export to Party B on 30/03/2018 for USD 2250 and payment received from 3rd party from Turkey and finally one more export to Party C on 14/09/2018 for USD 7000 and payment received from 3rd party from Turkey.
Our bank (Kotak Mahindra Bank) is refusing to regularise the Softex in the above three cases.
Please advise way forward. Thanks....................Shailendra Bansal
07 July 2024
Regularizing Softex forms for software exports can be a meticulous process, especially when payments are received via third parties or through non-conventional channels like PayPal. Here's a step-by-step guide on how you can approach the issue with Kotak Mahindra Bank to regularize the Softex forms for the mentioned exports:
### Step-by-Step Guide:
#### 1. **Documentation Collection:** - **Export Invoices:** Gather all the export invoices for the transactions. - **Payment Receipts:** Obtain all receipts and bank statements showing the receipt of payments through PayPal and the third-party from Turkey. - **Bank Realization Certificates (BRCs):** Collect BRCs for the payments received. If BRCs are not issued due to the non-conventional payment routes, this will need to be addressed. - **Agreement/Contract:** If possible, provide any agreements or contracts with the buyers (Party A, Party B, and Party C).
#### 2. **Prepare a Detailed Explanation:** - Prepare a detailed explanation for each transaction, highlighting the reason for the payment method (PayPal and third-party payments) and confirming the linkage between the export invoice and the payment received.
#### 3. **Foreign Inward Remittance Certificate (FIRC):** - Request FIRCs from the bank for the payments received via PayPal and from the third party. This certificate can act as proof of inward remittance.
#### 4. **Write to the Authorized Dealer (AD) Bank:** - Draft a formal letter to Kotak Mahindra Bank explaining the situation. Include all the supporting documents and request the regularization of the Softex forms.
### Sample Letter to the Bank: ```text [Your Name] [Your Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date]
The Manager Kotak Mahindra Bank [Branch Address]
Subject: Request for Regularization of Softex Forms for Software Exports
Dear Sir/Madam,
I am writing to bring to your attention the need for regularization of Softex forms for the software exports made by our company. The details of the transactions are as follows:
1. **Export to Party A**: - Date: 30/08/2015 - Amount: USD 1000 - Payment received via PayPal
2. **Export to Party B**: - Date: 30/03/2018 - Amount: USD 2250 - Payment received from a third party in Turkey
3. **Export to Party C**: - Date: 14/09/2018 - Amount: USD 7000 - Payment received from a third party in Turkey
Despite our best efforts, we have been unable to regularize these Softex forms due to the unconventional payment routes. We have attached the following documents for your reference and action:
1. Export invoices for the mentioned transactions 2. Bank statements showing receipt of payments 3. FIRCs (if available) or other evidence of inward remittance 4. Detailed explanation of the payment methods and linkage to the exports
We kindly request your assistance in regularizing the Softex forms for these transactions. We are willing to provide any further information or documentation required to facilitate this process.
#### 5. **Follow-Up:** - After submitting the letter and documents, follow up with the bank regularly to ensure that your request is being processed. Maintain clear communication and be prompt in responding to any additional information or documentation requests from the bank.
#### 6. **Engage with RBI if Necessary:** - If the bank remains uncooperative, you may need to escalate the issue to the Reserve Bank of India (RBI). Submit a detailed complaint explaining the situation and all the efforts you have made to resolve the issue with the bank.
### Legal and Compliance Considerations: - **Export Control Regulations:** Ensure that the exports to Iran comply with any existing export control regulations, as certain transactions with Iran may have been subject to sanctions during the mentioned period. - **Consult a Professional:** It may be beneficial to consult a chartered accountant or a legal professional specializing in export compliance to assist with this process.
By following these steps and ensuring all documentation is thorough and accurate, you can increase the likelihood of successfully regularizing the Softex forms for these transactions.
CAclubindia
