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Contributed on April 2, 2020

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NASSCOM’s submission to MeitY on SOFTEX

Blog: NASSCOM Official Blog

Context

NASSCOM attended a meeting with the Joint Secretary, MeitY to review the applicability of SOFTEX Form for Software products to strengthen ease of doing business for software product industry under National Policy on Software Products (NPSP) 2019. During the meeting, which was held in January, a recommendation to do away with the SOFTEX Form for Software Products was made.

Accordingly, NASSCOM had organized an industry consultation on this issue. We also organised an industry meeting (via video conferencing) along with STPI on 12 March 2020. The following points were discussed during the meeting-

1. Whether the industry needs to do away with the Softex form?
2. What is the difference between compliances pertaining to Softex form for software products and services?
3. Is there a need for elimination of physical Softex form and substituting it with an electronic interface?
4. How can the Softex process be simplified?

Based on the inputs during the consultation and the meeting from the industry, we made a submission to MeitY.

NASSCOM’s Submission

Retain the applicability of SOFTEX form but make it a paperless activity

The industry is of the view that the SOFTEX form serves as an important document for various reasons. For example-

•  For export certification, it is the only binding document that is honoured by various authorities in India i.e. GST, IT Department etc. as a proof of genuine export through Datacom / Internet links.
• It is internationally recognized and accepted as a proof of robust system for verification and certification of IT related product / services.
• India is a party to various international trade agreement and conventions and export certification is the requirement as compliance to these agreements.
• In cases of enquiry / audit by Enforcement Directorate, State Tax Authorities, Central Revenue authority etc., SOFTEX has helped exporter in facing the audit and replying to queries easily. Withdrawal of SOFTEX certification may lead to unwarranted situation with enforcement agencies.
• DGFT requires SOFTEX as a proof for technology Transfer.
  Given the importance of SOFTEX form for the industry, we thereby submit that it should not be done away it. The industry will face financial and operational issues in case the SOFTEX form ceases to exist. This will also affect the ease of doing business for the industry.

Improve the SOFTEX cycle

In order to further simplify the process of SOFTEX certification, the industry made the following suggestions:

• Complete SOFTEX cycle should be made paperless sooner and ensure seamless integration with all stake-holders .
• There should be uniformity in the process of SOFTEX certification in STPI and SEZ.
• Technology like Block-chain based solutions for SOFTEX certification should be explored holistically.

NASSCOM would be happy to assist MeitY, STPI & SEZ and separate consultation focusing on improvement of the SOFTEX cycle can be conducted.

If you have any comments/queries regarding this issue, please write to komal@nasscom.in and tejasvi@nasscom.in.

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