Problem: An Individual (not a company), who is an App Developer, selling his app in consideration of

one-time payment to a Spanish Acquirer. What are the compliances required under FEMA?
Foreign Exchange Management (Export of Goods & Services) Regulations, 2015

Regulations Clause Description

Regulation (1) Export Exporters of goods or software (excluding exports to Nepal and Bhutan) must
3: Declaration submit a declaration to the specified authority, with the following details:
Declaration (i) Full export value of goods or software.
of exports (ii) If the full value isn’t known at the time of export, the expected value based on
prevailing market conditions to receive on the sale of the goods or the software in
overseas market by the exporter.
The exporter must affirm that the full export value of goods will be paid within
the specified period and specified manner.
(2) Number Declarations must be completed in sets as specified by the authority.
of
Declaration
Sets
3) Export of Exporters of services not covered by the specified forms can export without
Services submitting a declaration but must ensure the foreign exchange earned is realized
and repatriated to India as per regulations.
(4) Third- Export proceeds from a third party must be declared by the exporter in the
Party appropriate declaration form.
Payments
Regulation Importer- The Importer-Exporter Code (IEC) number allotted by the Director General of
5: Indication Exporter Foreign Trade (DGFT) under Section 7 of the Foreign Trade (Development &
of importer- Code (IEC) Regulation) Act, 1992 must be:
exporter code  Indicated on all copies of the declaration forms submitted by the exporter
number to the specified authority.
 Included in all correspondence of the exporter with the authorized dealer
or the Reserve Bank, as applicable.
Regulation B.
6: Declaration  Form SOFTEX Declaration- For export of computer software,
Authority in Form audio/video/television software, the declaration must be submitted in
and Handling SOFTEX triplicate.
of  Where to Submit- Submitted to the designated official of the Ministry of
Declaration: Information Technology at STPIs, FTZs, or SEZs in India.
 Certification Process- The designated official will certify all three copies
of the SOFTEX form.
 Distribution of Copies
- Original: Sent to the nearest Reserve Bank office by the official.
- Duplicate: Returned to the exporter.
- Triplicate: Retained by the official.

Regulation General The export value of goods, software, or services must be realized and repatriated to
9: Timeframe Realization India within 9 months (or as specified by the Reserve Bank) from the date of
for Realizing Period (1) export.
 Explanation Definition of Date of Export- For software exports in non-physical form, the
“date of export” is the date of the invoice covering the export.
Regulation Submission Deadline- Export documents must be submitted to the authorized
10: dealer mentioned in the export declaration form within 21 days from the date of
Submission export or SOFTEX form certification.
of export
documents

Foreign Exchange Management (Realisation, repatriation and surrender of foreign exchange)

Regulations, 2015

Regulation Obligation to Upon realizing foreign exchange, the person must repatriate it to India
4: Manner of Repatriate by one of the following methods:
Repatriation Foreign  Sell the foreign exchange to an authorized person in India in
Exchange exchange for rupees.
(1)  Retain or hold the foreign exchange in an account with an
authorized dealer in India as per RBI specifications.
 Use the foreign exchange to pay off a foreign currency debt or
liability, as per RBI guidelines.
Deemed A person is considered to have repatriated foreign exchange when
Repatriation payment in rupees is received in India from a foreign bank or exchange
(2) house via an authorized dealer.

Foreign Inward Remittance Certificate (FIRC):

The full form of FIRC is the Foreign Inward Remittance Certificate. A FIRC is a document that serves
as proof of inward remittances to India. When Indian exporters receive payment in foreign currency, the
FIRC document will act as proof of the transfer. It’s like a receipt of proof for exporters or businesses that
they have received a transfer from outside India.
Requirement
Individual exporters or service providers and businesses receiving international payments in India are
required to obtain an FIRC.
The person receiving the payment from outside India is called a beneficiary. When the beneficiary
receives money in foreign currency, it will be credited to the beneficiary account through an Authorised
Dealer (AD) of the Reserve Bank of India (RBI).
The beneficiary must apply the FIRC request form to the bank.
Once the beneficiary submits the FIRC request form to the bank, it generates an Inward Remittance
Message (IRM) on the Export and Data Monitoring Systems (EDPMS) which is the government
export portal. The IRM number is the FIRC number. After paying the fees, the bank will issue the FIRC
to the beneficiary account. FIRC is also called Advice or Foreign Inward Remittance Advice (FIRA). 1

1
https://cleartax.in/s/foreign-inward-remittance-certificate