EDF for Service Exporters under FEMA from 1 October 2026

GST Composition Scheme: A Boon for Small Businesses

24 Oct 2026

Updated 24 October 2026 · By Regi Tom Antony, FCA, MBA (Australia), ACMA (UK), CGMA (USA), CISA (USA)

Since the first week of October my phone has not stopped. A software company in Infopark wants to know what its bank is asking for. A designer who bills a London agency wants to know whether she is now an "exporter". From 1 October 2026, every exporter of services has to file an Export Declaration Form, or EDF, with the bank for the invoices it raises. For most businesses this is new paperwork, not new tax, but the deadlines are real and they are worth getting right from the first month.

Where the rule comes from

The Reserve Bank notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 on 13 January 2026 (Notification FEMA 23(R)/2026-RB, published in the Gazette on 15 January). They were amended on 22 September 2026 by FEMA 23(R)(1)/2026-RB and came into force on 1 October 2026, replacing the 2015 regulations.

Under the old regime, software exporters filed SOFTEX forms, but most other service exporters simply received their money and the bank reported the inflow. Regulation 3(2) changes that. Every exporter of services must furnish an EDF to the "specified authority". For most people that is your Authorised Dealer bank. Software exporters also deal with STPI, and units in an SEZ file with the Development Commissioner.

The deadlines, in plain words

The basic rule is that the EDF is due within 30 days from the end of the month in which you raise the invoice. So an invoice dated 12 October needs its EDF by 30 November.

There are three sensible reliefs built in. Regulation 3(2)(a) lets you file one consolidated EDF covering all services you exported in a month, to one client or to many. Regulation 3(2)(b) says that for services other than software, you may file the EDF on or before the date you actually receive payment. And under Regulation 3(2)(c), your bank can extend the time if you ask and give reasons.

Then comes realisation. Regulation 5(1) requires export proceeds to be realised and brought into India within nine months from the invoice date for services, or twelve months where the invoice is raised and settled in rupees. When the regulations were first notified in January the periods were fifteen and eighteen months; the September amendment cut them down. If you have clients who habitually pay late, this is the change to watch.

For small invoices there is an easier way to close the record. The proviso to Regulation 4(2) allows invoices of up to ₹10 lakh each to be closed in the bank's EDPMS system on your own declaration that payment has been received, or through a quarterly bulk declaration. That is a simpler way to close each small bill, not an exemption from filing. There is no annual threshold below which the EDF disappears.

What happens if proceeds are not realised

Your bank must monitor open entries in EDPMS and follow up with you on them. If proceeds stay unrealised for more than a year after the due date, Regulation 13 says further exports can be made only against full advance payment or an irrevocable letter of credit. For a consulting firm that is a serious commercial handicap, so open entries should be cleared or extensions sought well before that point.

One point clients appreciate: under Regulation 19(3), the bank may not levy penalties on you for a regulatory delay.

A story from last month

Take Meera (not her real name). She runs a two-person UX studio in Kakkanad as a proprietorship, registered under GST, and bills three overseas clients, one in the US and two in Germany. In October she raised three invoices on different dates.

We set up a simple routine. At each month end, her accountant lists the export invoices raised and files one consolidated EDF with her bank. As hers are not software services, she could instead file on or before each payment date, but she preferred one fixed monthly date. Each invoice is under ₹10 lakh, so when the money comes in, she gives the bank a declaration and the entry closes. We also put a nine-month reminder against each invoice, because one of her German clients pays slowly.

None of this changes her GST position. Her exports still go out under LUT without IGST, as I explain in my note on export of services under GST, the five conditions, LUT and the 2026 intermediary change. The EDF sits alongside that, on the FEMA side.

The question about individuals

The regulations themselves contain no exemption for individuals exporting services. The only personal carve-out is for travellers carrying their own personal effects.

On 7 October 2026, at the press interaction after the monetary policy, the Governor and a Deputy Governor said that individuals need not report transactions of a personal nature, giving examples such as tutoring, small software work and subscriptions to apps or journals. The RBI said FAQs would follow. As I write this on 24 October, I have not found written FAQs on the RBI website, so that assurance has not yet been put on paper.

So my advice depends on how you work. If you earn the occasional fee in a personal capacity, the stated position is reassuring. If you invoice as a business, through a proprietorship, with a GSTIN, or on a regular monthly basis, I would not rely on an oral remark. Write to your bank, describe your receipts, and ask them to confirm in writing whether they expect an EDF from you.

People often ask me whether the bank will stop their payments if an EDF is missing. Nothing in the regulations says so. What the bank must do is track open entries and follow up, and Regulation 13 bites only after a long period of non-realisation. Others ask whether they need to file separately for each invoice; the consolidated monthly EDF is there precisely so you do not. And many ask whether this affects income tax. It does not. I have set out how these pieces connect on our cross-border tax and FEMA advisory page.

If you are unsure whether this applies to you, write to us at letstalk@rtaandassociates.com.

For how this fits with FEMA, treaties and GST more broadly, see our guide to cross-border tax and FEMA advisory.

Related guides

Regi Tom Antony, FCA, MBA (Australia), ACMA (UK), CGMA (USA), CISA (USA)
Regi Tom Antony & Associates, Chartered Accountants, Kochi

This is general information based on the law as at 24 October 2026, not advice for your particular situation.