GEN Z FREELANCER NOW FILES THE SAME EXPORT FORM AS A LISTED SOFTWARE COMPANY; KBS SIDHU ASKS RBI TO EXEMPT SMALL EARNERS

Face2News/Chandigarh

 A college student who edits videos for a client in Toronto must now file the same foreign-exchange declaration as a listed software company. KBS Sidhu, retired IAS officer and former Special Chief Secretary, Government of Punjab, has pointed this out in a letter to the Governor of the Reserve Bank of India, Shri Sanjay Malhotra.

Under RBI’s new export regulations, in force since 1 October 2026, every exporter of services must file an Export Declaration Form with the bank within thirty days of the end of the month in which the invoice is raised. Until 30 September, services other than software needed no declaration at all. The rule has no threshold by size. The first declarations fall due on 30 November 2026.

KBS Sidhu, who holds a Master’s degree in Economics from the University of Manchester, UK, has asked for one narrow change. Where an individual or sole proprietor receives up to ₹20 lakh a year for services exported, the bank’s own record of the inward remittance should be treated as the declaration, with no separate form. The figure mirrors the turnover below which a service provider need not ordinarily register under GST.

“The self-employed young Indian with a laptop, a PAN and a bank account is the smallest earner of foreign exchange and the easiest to trace,” KBS Sidhu said. “The bank already sees every rupee that reaches him. Asking him to declare it again only adds paper.”

The declaration is meant to check money parked abroad and round-tripping through inflated invoices. Both, the letter argues, occur at high values and between related parties. A micro digital creator, coder, designer or online tutor is paid only when the money lands in India. According to chartered accountants’ commentary cited in the letter, the form asks for an Importer-Exporter Code and a GSTIN, which many small earners do not hold.

KBS Sidhu has also sought a clarification on payments routed through cross-border payment aggregators, on which most creators depend, and has asked that banks extend time liberally so that no one stands in default on 30 November.
“Compliance that costs more than the receipt will push honest small earnings into informal channels,” he said. “RBI already trusts a small exporter’s word to close an entry of up to ₹10 lakh. The same trust should apply at the filing stage.”

Copies of the letter have gone to the Union Finance Minister and the Union Commerce and Industry Minister. KBS Sidhu first raised the issue in August 2025 in The KBS Chronicle, in a piece titled “The $10 Problem: Let India’s Creators Get Paid”.