What Payment and Reporting Rules Apply to SEZ and EOU Units in India?

The export payment and reporting rules for SEZ and EOU units are two layers of law. RBI's FEMA rules decide how export money is declared, received and tracked, and they apply to these units like any other exporter. The SEZ Rules and the Foreign Trade Policy add a separate performance test called net foreign exchange (NFE) earnings, reported to the Development Commissioner.

• Declaration: Every exporter declares the full export value on the Export Declaration Form (EDF). For a unit in an SEZ, the specified authority for goods, services and software is the Development Commissioner of the SEZ (Regulation 2(1)(f)).
• SOFTEX: The separate SOFTEX form for software exports is gone from 1 October 2026. RBI superseded its SOFTEX circulars, including the one on SOFTEX procedure at SEZs, and software is now declared on the EDF (A.P. (DIR Series) Circular No. 20, para 4 and Annex A). See SOFTEX form filing.
• Realisation: The full export value must be realised and repatriated within nine months from the invoice date for services or the shipment date for goods, or twelve months if invoiced or settled in rupees (Regulation 5(1)).
• Tracking: The AD bank records the EDF and every export receipt in EDPMS and marks the entry off once the value is realised (Regulation 18(1)).
• NFE: An SEZ unit must achieve positive net foreign exchange, calculated cumulatively for five years from the start of production (SEZ Rule 53, as substituted in 2019). EOUs have the same test under Foreign Trade Policy para 6.04.
• Reporting: An SEZ unit submits an Annual Performance Report in Form I to the Development Commissioner (SEZ Rule 22(3)). An EOU files quarterly and annual reports to its Development Commissioner (Handbook of Procedures para 6.11).

In practice, the AD bank handles the FEMA side, and the Development Commissioner handles the NFE side. A unit needs clean records for both, because export receipts reported to the bank also feed the NFE figures in the annual report.

The SEZ and EOU export payment and reporting rules apply to every approved unit in an SEZ and every unit under the EOU, EHTP, STP or BTP schemes. The FEMA rules also apply to ordinary exporters, so the difference lies mainly in where the EDF is filed and in the NFE test.

An SEZ or EOU unit declares each export on the EDF, receives payment through its AD bank and gets the EDPMS entry closed. It then rolls the year's exports and foreign exchange outflows into its annual performance report. The order below follows the 2026 regulations and the SEZ Rules.

1. Invoice: raise the export invoice in the currency agreed with the overseas client. The nine-month realisation clock for services starts from the invoice date (Regulation 5(1)(a)).
2. EDF: file the EDF for services or software within 30 days from the end of the month in which you raised the invoice. One EDF can cover all exports to one or more recipients in that month (Regulation 3(2)). SEZ units file with the Development Commissioner.
3. Forwarding: where the specified authority is not an AD bank, such as the SEZ Development Commissioner, that authority forwards the authenticated EDF to the AD bank (Regulation 3(3)).
4. EDPMS entry: the AD bank enters the service EDF in EDPMS within five working days of receiving it (Regulation 18(1)(b)).
5. Receipt: the AD bank credits the export payment after checking that the transaction is genuine and closes or updates the EDPMS entry at the same time (Regulation 4(2)). See EDPMS closure.
6. Annual report: after the financial year, an SEZ unit files its Annual Performance Report in Form I, certified by a chartered accountant (Form H, condition 7). Form I reports the year's NFE and the cumulative NFE position (Form I as substituted in 2019).

SEZ and EOU export payments depend on a short list of documents and fixed deadlines. The EDF and invoice support each export, the AD bank's EDPMS record proves realisation, and the annual performance report proves NFE. The exact list a bank asks for is set in its own published policy.

If an SEZ or EOU unit misses payment deadlines, the FEMA consequences are the same as for any exporter. If it misses the NFE test, the Development Commissioner can take action under the SEZ Rules or the Foreign Trade Policy, which can end in penal action under foreign trade law.

• One-year rule: Proceeds unrealised beyond one year from the due date or extended date mean further exports only against full advance or an irrevocable letter of credit (Regulation 13). See export proceeds not realised.
• Watch list: An SEZ unit with negative NFE in its first and second years goes on a watch list. If it is still negative at the end of the third year, it gets a show cause notice (SEZ Rules, Annexure-I).
• Penal action: If negative NFE continues to the fifth year, the Development Commissioner starts penal action under Rule 25 (Annexure-I). Failure to achieve positive NFE attracts action under the Foreign Trade (Development and Regulation) Act, 1992 (Rule 54(2)).
• Late APR: Wrong or late annual returns can lead to withdrawal of permission for authorised operations, or a stop on further imports and domestic sales (Form H, condition 7).
• EOU breach: An EOU that fails positive NFE or its approval conditions faces penal action under the Foreign Trade (Development and Regulation) Act and possible cancellation of its Letter of Permission (FTP para 6.05(c)).

Ask your AD bank for an extension before the realisation period ends, citing reasons (second proviso to Regulation 5(1)). For an NFE shortfall caused by adverse market conditions or hardship, apply to the Board of Approval for up to one more year on the five-year block (proviso to SEZ Rule 53; FTP para 6.04). See extension of export realisation period.

The timeline for SEZ and EOU compliance runs from each invoice to the end of the five-year NFE block. Monthly EDF filing and the nine-month realisation window come from RBI. The annual performance report and the five-year NFE review come from the SEZ Rules or the Foreign Trade Policy.

• Old SOFTEX: Still preparing SOFTEX forms after 30 September 2026. Software exports now go on the EDF (Regulation 2(1)(f)(iii)).
• Old APR date: Working to the old 180-day APR window. The SEZ Rules replaced it with nine months on 9 July 2026 (SEZ (Second Amendment) Rules, 2026; 2016 amendment).
• Rupee receipts: Assuming every domestic receipt counts towards NFE. Services rendered in the domestic tariff area count only when paid in free foreign exchange, or in rupees that RBI treats as such (Rule 53, item A(h)).
• Ignoring outflows: Leaving foreign commission, royalty, fees or interest out of B in the NFE calculation (Rule 53, item B(a)).
• Wrong account: Receiving SEZ foreign exchange into an account other than the unit's Foreign Currency Account when the unit holds one (Regulation 4(D)).
• Late extension: Asking the AD bank for more time only after the nine months have run out, instead of while the period is running (Regulation 5(1)).

Every rule, deadline and form on this page is linked to its official source, checked on the dates below.

1. Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (Notification No. FEMA 23(R)/2026-RB, amended up to 22 September 2026), Regulations 2(1)(f), 3, 4(2), 5(1), 13, 18(1) (checked 9 Oct 2026)
2. RBI A.P. (DIR Series) Circular No. 20 dated 16 January 2026: Export and Import of Goods and Services, Paragraph 4 and Annex A (items 60, 63 and 76 on SEZ SOFTEX and realisation) (checked 9 Oct 2026)
3. RBI Master Direction: Export of Goods and Services (superseded from 1 October 2026), Paragraphs A.2(i) and B.5(iv)(c) (checked 9 Oct 2026)
4. Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 (FEMA 10(R)/2015-RB), Regulation 4(A) and 4(D) (checked 9 Oct 2026)
5. Special Economic Zones (Amendment) Rules, 2019, G.S.R. 200(E) dated 7 March 2019 (substituted Rule 53 and Form I), Rule 53 (A, B, proviso) and Form I (checked 9 Oct 2026)
6. Special Economic Zones Rules, 2006, with amendments up to July 2010 (SEZ India), Rules 22(3), 22(4), 25, 54(2), Annexure-I and Form H condition 7 (checked 9 Oct 2026)
7. Special Economic Zones (Second Amendment) Rules, 2026, G.S.R. 609(E) dated 9 July 2026, Paragraphs 2 and 3 (Form H condition 7; Annexure-I item 1) (checked 9 Oct 2026)
8. Special Economic Zones (Amendment) Rules, 2016, G.S.R. 1094(E) dated 21 November 2016, Paragraphs 2 and 3 (checked 9 Oct 2026)
9. Foreign Trade Policy 2023, Chapter 6: EOUs, EHTPs, STPs and BTPs (DGFT), Paragraphs 6.04, 6.05(c), 6.11(b) and (c) (checked 9 Oct 2026)
10. Handbook of Procedures 2023, Chapter 6: EOUs, EHTPs, STPs and BTPs (DGFT), Paragraphs 6.10, 6.11 and 6.12 (checked 9 Oct 2026)
11. Integrated Goods and Services Tax Act, 2017, section 16: Zero rated supply (CBIC), Section 16(1)(b) (checked 9 Oct 2026)