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Do i need an export code?

M Agarwal (Consultant) (228 Points)

29 December 2014

Hi,

I run a sole propritership software company and provide people living abroad with custom softwares and provide consultancy services.
The question might sound stupid, but do I need an export code for export of service?

Thanks.

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10 Replies

RAMESH KUMAR VERMA (Advocate ) (5965 Points)
Replied 29 December 2014

for availing the Export Incentive :

APPENDIX 10
LIST OF SERVICES
SECTORS AND SUB-SECTORS
1. BUSINESS SERVICES
A. Professional services
a. Legal services
b. Accounting , auditing and bookkeeping services
c. Taxation services
d. Architectural services
e. Engineering services
f. Integrated engineering services
g. Urban planning and landscape architectural services
h. Medical and dental services
i. Veterinary services
j. Services provided by midwives, nurses, physiotherapists and paramedical personnel
k. Others
B. Computer and related services
a. Consultancy services related to the installation of computer hardware
b. Software Implementation services
c. Data processing services
d. Database services

for More info:

/share_files/amendment-in-anf-2a-of-handbook-of-procedure-vol-i-appendices-and-aayat-niryat-forms-2009-2014-65125.asp

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M Agarwal (Consultant) (228 Points)
Replied 30 December 2014

Originally posted by : RAMESH KUMAR VERMA
	for availing the Export Incentive : APPENDIX 10 LIST OF SERVICES SECTORS AND SUB-SECTORS 1. BUSINESS SERVICES A. Professional services a. Legal services b. Accounting , auditing and bookkeeping services c. Taxation services d. Architectural services e. Engineering services f. Integrated engineering services g. Urban planning and landscape architectural services h. Medical and dental services i. Veterinary services j. Services provided by midwives, nurses, physiotherapists and paramedical personnel k. Others B. Computer and related services a. Consultancy services related to the installation of computer hardware b. Software Implementation services c. Data processing services d. Database services for More info: /share_files/amendment-in-anf-2a-of-handbook-of-procedure-vol-i-appendices-and-aayat-niryat-forms-2009-2014-65125.asp

Hi Ramesh, Thanks a lot for the info.

What 'Export Incentive' are we talking about here, can you give me an example?

Thanks :)

(Guest)

Hi,

In case your software sales aggregate to Rs. 9L, it will be mandatory for you to register with Service Tax and pay Service Tax.

If you export your softwares, and have a IEC (Import Export Code), you will be eligible for exemtion with service tax.

M Agarwal (Consultant) (228 Points)
Replied 02 January 2015

Originally posted by : Nikhil Agarwal
	Hi, In case your software sales aggregate to Rs. 9L, it will be mandatory for you to register with Service Tax and pay Service Tax. If you export your softwares, and have a IEC (Import Export Code), you will be eligible for exemtion with service tax.

But I get only foreign currency, plus I always reside in India and all my clients outside. I am already exempt,isn't it?

(Guest)

In case you receive only foreign currency, there is a lot of proceduers you will have to follow. Like BRC (Bank reconciliation). etc or else you will recieve a notice from RBI.

Also if you follow all export procedures you may be eligible for duty drawback (i.e. incentive on export from Government, approx. 2% of export invoice).

I would suggest you to take IEC, as it is a very easy procedure and a life long document with no monthly fillings or returns.

In case you are based in Delhi,NCR an IEC can be obatined in 2-3 days time.

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M Agarwal (Consultant) (228 Points)
Replied 02 January 2015

Originally posted by : Nikhil Agarwal
	In case you receive only foreign currency, there is a lot of proceduers you will have to follow. Like BRC (Bank reconciliation). etc or else you will recieve a notice from RBI. Also if you follow all export procedures you may be eligible for duty drawback (i.e. incentive on export from Government, approx. 2% of export invoice). I would suggest you to take IEC, as it is a very easy procedure and a life long document with no monthly fillings or returns. In case you are based in Delhi,NCR an IEC can be obatined in 2-3 days time.

Hi,

I am Kolkata based.

What besides Bank reconcile do I need to do? I am researching about 'reconcile' right now.

duty drawback, but there is no duty on Export of computer software, is there?

I am just a sole developer, I don't own a business right now. Will it change if I start a sole proprietorship?

Thanks ! :D

M Agarwal (Consultant) (228 Points)
Replied 02 January 2015

Hi,

I just read https://howtoexportimport.com/No-Bank-realization-Certificate-BRC-required-for-I-192.aspx and it appears I don't need to get BRC. I do get an FIRC after each transaction.

Do i need to get anything else. Is IEC still required?

Thanks.

(Guest)

You should always follow all procedures, provided your export value is high (maybe 5-10L). In case the value is less, you should not bother about these things because then the cost of maintaing these docs could turn out to be more then the revenue.

There is no duty drawback incentive on export of softwares.

For bank reconciliation, you should contact your bank. The forex incharge in your branch would guide you. They could charge around 500-1500/- per invoice of software.

M Agarwal (Consultant) (228 Points)
Replied 03 January 2015

Originally posted by : Nikhil Agarwal
	You should always follow all procedures, provided your export value is high (maybe 5-10L). In case the value is less, you should not bother about these things because then the cost of maintaing these docs could turn out to be more then the revenue. There is no duty drawback incentive on export of softwares. For bank reconciliation, you should contact your bank. The forex incharge in your branch would guide you. They could charge around 500-1500/- per invoice of software.

Hi Nikhil,

Export value >20Lacs

I see, I need BRC and FIRC both?

I am using freelancing sites online to get work + money. Can you please about what procedures exactly do I need to follow?

Thanks again Nikhil, it means a lot :)

(Guest)

You will get FIRC for all payments and part payment from foreign to you postal address. In case you havent received it you may contact your bank branch.

BRC is just a reconciliation and a final proof that you have exported a sotware and received the foreign exchange on its behalf.