India’s software export ecosystem has matured rapidly, with thousands of IT and SaaS businesses serving global clients. Yet, many exporters still face confusion around STPI vs Non-STPI status—often assuming both are tax-driven registrations. In reality, while STPI offers tax-linked benefits, Non-STPI registration is not about incentives at all. It is a statutory compliance requirement under the Foreign Exchange Management Act (FEMA) for software exporters receiving foreign remittances. Ignoring or misunderstanding this distinction can create serious operational risks.
Non-compliance may lead to difficulties in bank regularisation, delays in inward remittance certification, and in extreme cases, freezing or questioning of export proceeds. For software exporters, understanding Non-STPI is not optional—it is essential for compliant, uninterrupted global business operations.
Key takeaways
- Non-STPI registration is a regulatory compliance requirement for software exporters receiving foreign payments—it is not a tax benefit or incentive scheme.
- Completing registration and ensuring timely renewal helps avoid FEMA violations, bank scrutiny, and disruption in receiving foreign inward remittances.
- It is important to understand the difference between STP and Non-STPI units and choose based on operational setup, not perceived financial benefits.
- Maintaining a regular SOFTEX filing routine ensures smooth banking operations and supports faster GST refunds and fewer compliance hassles.
What Is Non-STPI Registration?
Non-STPI registration refers to the formal enrolment of software exporters with the STPI for monitoring and certification, not for incentives. Its focus is regulatory compliance rather than tax or duty benefits. Unlike STP units that operated under a bonded framework, Non-STPI units function as regular Domestic Tariff Area (DTA) businesses without access to duty-free imports.
This registration allows you to file SOFTEX forms, which confirm that your software export is a genuine trade transaction. Banks use this certification to regularise foreign inward remittances and ensure compliance with FEMA rules issued by the RBI.
Who Qualifies as a Non-STPI Unit?
- Private Limited Companies, Partnerships, and Proprietorships.
- SaaS firms, agencies, freelancers, and other IT/ITES exporters.
- Entities exporting IT services or software products through data communication links.
Did You Know?
The DTA units represent standard businesses operating outside STPI parks, paying regular customs duties and taxes while exporting software services.
Key Objectives of the Registration
- Track software exports accurately for national trade statistics.
- Enable STPI to act as the reporting authority appointed by the RBI.
- Support smooth, compliant receipt of cross-border payments through banks.
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Is Non-STPI Registration Mandatory?
Yes. Non-STPI registration is mandatory for anyone exporting software or IT/ITES services from India. A common misconception is that freelancers, small agencies, or early-stage SaaS firms are exempt. That is incorrect.
As per RBI, SOFTEX filing is compulsory for all software exports, irrespective of size or turnover. Since SOFTEX can only be filed through STPI, Non-STPI registration becomes unavoidable.
The FEMA Connection
- FEMA requires declaration of all foreign exchange earnings through prescribed channels.
- SOFTEX forms serve as proof of export for services, equivalent to Shipping Bills for physical goods.
- Failure to report exports or delays in realisation can trigger FEMA scrutiny, notices, or penalties.
Impact on GST Refunds
- Beyond FEMA compliance, non-STPI registration directly affects GST refund claims. Software exports qualify as Zero-Rated Supplies under GST.
- To claim a refund of accumulated Input Tax Credit (ITC), you must show proof of export and foreign currency realisation.
- Banks issue Bank Realisation Certificate (BRC) / Foreign Inward Remittance Certificate (FIRC) only after export reporting aligns with SOFTEX filings.
- If GST officers cannot link refunds to valid export proof, refund claims can be rejected or delayed, blocking working capital.
Difference Between STP and Non-STPI
STP and Non-STPI registrations exist for very different reasons, and understanding this difference helps you choose the right path for your software export business. Instead of looking at them as alternatives, it is better to see them as two frameworks built for distinct operating models and compliance needs.
Purpose and Applicability
- STP registration applies to software exporters operating as 100% Export Oriented Units and looking to claim tax and duty incentives.
- These units commit to exporting their entire output under a controlled regulatory setup.
- Non-STPI registration applies to regular Domestic Tariff Area units exporting software services without seeking fiscal benefits.
- Its primary role is to ensure foreign exchange compliance with banking and FEMA requirements.
Operational Differences
- STP units must operate from approved, customs-bonded premises.
- Any change in location or setup requires regulatory approval.
- Non-STPI units can operate from any office or home location without physical inspections.
- Business expansion or relocation does not require prior permissions.
Cost and Compliance Effort
- STP registration involves higher setup costs, periodic filings, audits, and close regulatory monitoring.
- Compliance is continuous and resource-intensive.
- Non-STPI registration has a lighter compliance load.
- Costs are usually transaction-based or turnover-linked, with minimal ongoing reporting.
Benefit and Incentive Differences
- STP units can import hardware without paying customs duty.
- They may access export-linked fiscal incentives.
- Non-STPI units do not receive duty or tax benefits.
- In return, they face significantly less administrative burden and simpler day-to-day compliance.
STP vs Non STPI
| Feature | STP Unit | Non-STPI Unit |
| Customs duty on hardware | Can import eligible hardware without paying customs duty | Must pay normal customs duty on imports |
| Place of operation | Must operate from approved, bonded premises | Free to operate from any location |
| Level of compliance | High, with regular audits and physical controls | Lower, mostly document-based |
| Primary benefit | Access to tax and duty incentives | Smooth FEMA and bank compliance |
Step-By-Step Non-STPI Registration Process
The non-STPI registration process follows a simple, predictable flow and is fully online. You complete the entire application on the official STPI portal by registering your business as a Non-STPI software exporter. Once approved, your registration enables banks to recognise your export activity and process foreign remittances smoothly.
Documents Required for Application
- Company incorporation documents (MoA, AoA for companies; Partnership Deed for firms).
- PAN card of the entity.
- Import Export Code (IEC) certificate.
- Board Resolution authorising the signatory.
- Project report explaining services offered and export projections.
- Banker’s Certificate confirming account and branch details.
Online Registration Steps
Step 1: Visit the official STPI website and select your state jurisdiction.
Step 2: Create a user account with valid email and mobile verification.
Step 3: Select ‘Non-STPI’ as your unit type during registration.
Step 4: Complete Form-A with company details, director information, and export projections.
Step 5: Upload digitally signed documents in prescribed formats.
Step 6: Review application summary and submit for processing.
Step 7: Make online payment after initial verification.
Registration Fees and Payment
- The standard application fees are typically ₹1,000 plus GST.
- After approval, Annual Service Charges (ASC) apply based on export turnover.
- For example, if your annual export turnover is ₹10 lakh, you fall in the up to ₹12.5 lakh slab and pay an Annual Service Charge of ₹4,000. Similarly, a software exporter with ₹5 crore in exports pays ₹1,10,000 per year under the ₹3–10 crore slab.
How to Renew Non-STPI Registration Online?
If you export software under the Non-STPI route, your registration does not run indefinitely. The Letter of Permission (LoP) or Non-STPI registration is usually valid for three years from the date of issue. To continue exporting without disruption, you must renew it on time.
The renewal process is fully online and relatively straightforward. You need to submit a renewal request on the designated portal along with updated export performance details. The authorities review whether you have complied with reporting requirements and whether your export activity remains consistent with the original approval. Filing early avoids last-minute gaps that can affect your banking and compliance flow.
Renewal Timeline and Deadlines
- Apply for renewal at least three months before your current LoP expires.
- This buffer gives enough time for review and clarifications, if any.
- If the registration lapses, you may not be able to file SOFTEX forms, which can block export realisation reporting.
- Delays can also trigger bank queries on inward remittances.
Documents Needed for Renewal
- Export performance reports covering the last three financial years.
- Updated company documents if there have been changes in name, address, or constitution.
- A copy of the original Letter of Permission.
Simplifying International Payments and Compliance
Many software exporters struggle to match incoming international payments with SOFTEX filings, especially when receipts arrive in parts or through different banking channels. This gap often creates follow-ups from banks and STPI, even when exports are genuine.
Traditionally, exporters relied on the BRC process to prove receipt of funds. This involved manual tracking, branch visits, and repeated coordination with banks. Over time, the focus has shifted to the digital e-BRC self-certification. Modern payment solutions now provide e-FIRC that directly links foreign inflows with export documentation
The Role of FIRC and e-FIRC
- FIRC is official proof that foreign currency has been received in India against an export.
- STPI relies on FIRC details to verify receipts and close SOFTEX submissions.
- Delays or mismatches in FIRC data often trigger compliance queries.
- e-FIRC has replaced paper certificates in most cases, allowing faster access and easier reconciliation.
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- With the Razorpay MoneySaver Export Account, you can receive payments from overseas clients through local bank transfers without opening a foreign bank account.
- The account is created in your business name, which helps banks clearly identify export proceeds and link them to your compliance records.
- Payments received in foreign currency are automatically settled to your Indian bank account in INR, reducing reconciliation effort.
- All international transactions, settlements, and payment statuses remain visible in one dashboard, making follow-ups and reporting simpler.
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Conclusion
Non-STPI registration is not optional paperwork for software exporters—it is a basic safeguard for your business. It ensures that foreign income is reported correctly, banks remain comfortable processing your receipts, and you stay protected from FEMA-related issues. While the process involves documentation and periodic reporting, it creates long-term financial and operational stability.
Treat compliance as a routine, not a one-time task. Timely renewals and regular SOFTEX filing help avoid payment disruptions, support smooth GST refund processing, and reduce bank scrutiny. When handled properly, compliance does not slow you down—it enables predictable growth and cleaner cross-border operations.
FAQs
Q1. Is Non-STPI registration mandatory for all software exporters?
Yes. According to RBI Master Circulars and FEMA regulations, any company or firm exporting software is required to file SOFTEX forms. To file these forms, you must register as a Non-STPI unit with the STPI.
Q2. Who is eligible to apply for Non-STPI registration?
Any business entity in India engaged in the export of IT/ITeS software is eligible. This includes Private Limited Companies, LLPs, Partnerships, and Proprietorships.
Q3. What are the fees associated with Non-STPI registration?
There are two main costs:
- Application Fee: A one-time processing fee of ₹1,000 + GST paid during registration.
- ASC: A yearly fee paid to STPI, calculated based on your company’s annual export turnover
Q4. How long is the Non-STPI registration valid?
Non-STPI registration is typically valid for three years from the date of issue. You must apply for renewal before it expires to continue exporting software and filing SOFTEX without interruption.
Q5. What is the main difference between STP and Non-STPI units?
The main difference lies in intent and compliance. STP units operate as 100% export-oriented entities to claim tax and duty benefits and follow strict controls, while Non-STPI units export software without incentives and focus only on meeting foreign exchange and banking compliance requirements.
Q6. Why is SOFTEX filing important for GST refunds?
SOFTEX filing links your software export invoices with foreign exchange realisation. Banks rely on it to confirm export proceeds, and GST authorities use this data to process refunds. Without timely SOFTEX filing, GST refunds can get delayed or rejected.
Q7. Can I renew my Non-STPI registration online?
Yes. Non-STPI registration can be renewed online by submitting a renewal request through the designated portal along with updated export performance details, before the current registration expires.
