Export of Services from 1 October 2026: EDF, Realisation and EDPMS under the FEMA Export and Import Regulations, 2026

The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, notified by the Reserve Bank of India by Notification No. FEMA 23(R)/2026-RB dated 13 January 2026, came into force on 1 October 2026. They supersede the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 (Notification No. FEMA 23(R)/2015-RB dated 12 January 2016). The Foreign Exchange Management (Export and Import of Goods and Services) (Amendment) Regulations, 2026, Notification No. FEMA 23(R)/(1)/2026-RB dated 22 September 2026, also came into force on 1 October 2026 and changed the realisation period before the principal regulations took effect. The following sets out what an exporter of services, including software, now has to do: the Export Declaration Form (EDF), realisation, and closure of entries in EDPMS.

The position until 30 September 2026

Under the 2015 Regulations, a declaration was required for goods and software. For other services, regulation 3(3) of those regulations made the position explicit: where none of the specified forms applied, the exporter could export the services without furnishing any declaration, but remained liable to realise and repatriate the export value. For most service exporters outside the software framework, the obligation was realisation alone.

That ends from 1 October 2026. A single EDF, in the form given at the Annex to the 2026 Regulations, now covers goods and services alike, and the Explanation to regulation 2(1) provides that “services” includes software. Every exporter of services now has a declaration to file with its bank.

Who receives the EDF

Regulation 2(1)(f) defines the “specified authority” to whom the EDF is furnished:

• for services other than software, an Authorised Dealer in the Domestic Tariff Area, and the Development Commissioner of the Special Economic Zone for a unit in an SEZ
• for software, an Authorised Dealer or Software Technology Parks of India (STPI) in the Domestic Tariff Area, and the Development Commissioner of the SEZ for a unit in an SEZ

Where the specified authority is not an Authorised Dealer, regulation 3(3) requires it to forward the duly authenticated EDF to the respective Authorised Dealer. A DTA exporter of services other than software deals only with its bank, and the declaration in the form names the Authorised Dealer to which the export value will be delivered.

When the EDF is due

Under regulation 3(2), an exporter of services furnishes the EDF, specifying the full export value of the services, within 30 days from the end of the month in which the invoice for the services has been raised. Three provisos soften it:

• an exporter who has exported services to one or more recipients in a month may submit a single EDF for all of them
• an exporter of services other than software may submit the EDF on or before the date of receipt of payment
• the Authorised Dealer may, on a request citing reasons for the delay, extend the period for submission after satisfying itself that the request is reasonable

For invoices raised in October 2026, a monthly EDF falls due within 30 days from 31 October 2026. An exporter of services other than software that is paid quickly can instead file on or before the receipt. Where a delay is unavoidable, the request for extension goes to the bank with reasons, preferably before the 30 days run out.

Under regulation 18(1)(b), the Authorised Dealer enters the services EDF in EDPMS within five working days of receiving it.

What the form asks for

The Annex prescribes one form with a part for each type of export. For services, the general information includes the AD code, IE Code, GSTIN, PAN, the mode of realisation, and the name, address and relationship of any third party making payment. Part 2B then takes a line for each service recipient: name and address, country, invoice number, date, currency and amount, net realisable value, contract number and date if any, description of services, SAC code and remarks.

The exporter signs a declaration in Part 4 undertaking to deliver the full value of the services within the period of realisation stipulated by RBI, and to submit the documents relating to the exports to the Authorised Dealer as required.

Because the form carries the GSTIN, SAC code and invoice-level detail, the EDF for a month and the export invoices reported for GST for that month should be prepared from the same data, so that the figures declared to the bank and in the GST returns reconcile.

Realisation within nine months of the invoice

Regulation 5(1)(a) requires the full export value of services to be realised and repatriated within nine months from the date of invoice. Where the export is invoiced or settled in Indian Rupees, the period is twelve months from the date of invoice.

As notified in January, these periods read fifteen months and eighteen months. The September amendment substituted nine and twelve months with effect from 1 October 2026, so the longer periods never came into operation. The 2015 Regulations also allowed nine months, but counted from the date of export. The new rule counts from the date of invoice.

The Authorised Dealer may, on a request citing reasons, allow an extension beyond the specified period if satisfied with them. The consequence of not realising is in regulation 13: if proceeds remain unrealised for more than one year from the due date of realisation, or the extended period, the exporter may undertake further exports only against full advance or an irrevocable Letter of Credit.

Closing the EDPMS entry, and invoices up to ₹10 lakh

Under regulation 4(2), the Authorised Dealer credits export proceeds only after satisfying itself that the transaction is genuine, and closes or updates the EDPMS entry at the same time. For an invoice for services up to ₹10 lakh, or its equivalent in foreign currency, the entry may be closed on the exporter’s declaration that payment has been realised, in full or otherwise. The declaration may also be given quarterly, for bulk closure of entries, which is the simpler course for an exporter with many small invoices.

Short realisation is dealt with in regulation 6. The Authorised Dealer may allow a reduction in the export value on a request citing reasons. Where the export value is up to ₹10 lakh per invoice, the reduction, including non-realisation of the full value, may be permitted on the exporter’s declaration alone.

Set-off, third-party receipts and advances

• Set-off: regulation 7 allows the Authorised Dealer to permit set-off of export receivables against import payables with the same overseas buyer or supplier, or with its overseas group or associate companies, within the realisation period or the extended period.
• Third-party receipts: regulation 8 allows receipts from a third party if the Authorised Dealer is satisfied of the bona fides. The EDF records the third party’s name, address and relationship to the exporter, so this should be known when the form is filed.
• Advances: under regulation 10(1), an advance and the subsequent realisation are routed through the same Authorised Dealer. A change of bank is allowed once both Authorised Dealers have been intimated. Interest payable on an export advance, under regulation 10(4), cannot exceed the all-in-cost ceiling for trade credit under the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018.

The bank’s own procedure

Regulation 19 leaves much of the operational detail to each bank. It requires every Authorised Dealer to frame an internal policy and standard operating procedure covering documents, timelines and charges, extensions, adjustment of under-, over- and non-realisation, and advance receipts, and to disclose the policy and the main features of the SOP on its website. Charges must be reasonable and proportionate, and regulation 19(3) bars the Authorised Dealer from levying charges or a penalty on an exporter for the exporter’s own regulatory delay or violation. The bank’s published SOP is the place to check the attachments it will want with the EDF.

For transactions undertaken before 1 October 2026 that earlier needed RBI approval, regulation 20, inserted by the September amendment, empowers Authorised Dealers to handle them. Exporters already on the Caution List as on 30 September 2026 continue under the orders issued to them until removed from it, under the proviso inserted in regulation 13.

This article is intended for educational purposes only and should not be construed as professional advice. It is based on the law as understood on the date of publication; laws and regulations are subject to change, and it may not reflect later developments. Readers are advised to consult a qualified tax professional on their specific situation before taking any action based on it. CA. Mohit Gaba takes no responsibility for any action taken or decision made on the basis of this article.