STPI Scheme
STP scheme is a 100% export oriented scheme for the development and export of computer software/hardware using data communication links or in the form of physical media including export of professional services. This scheme is unique in its nature as it focuses on one product/sector i.e. computer software. The scheme integrates the concept of 100% Export Oriented Units (EOUs) and Export Processing Zones (EPZs) of the Government of India and the concept of Science Parks/Technology Parks as operating elsewhere in the world. The unique feature of STP scheme is the provision of Single-Point Contact Services for the member units enabling them to conduct export operation at a place commensurate with international practices. The STPI acts as the front end on behalf of the Government of India to take care of all the statutory needs like project approval, import approval, bonding, export certification etc. It also acts as a resource center for the member computer software-exporting units by offering general infrastructural facilities like ready to use built-up space, centralized computing facilities and High Speed Data Communications (HSDC) facilities. Download Application Form ACTIVITIES The following activities are covered for setting up of a 100% Export Oriented Unit (EOU) under scheme for development of computer software for export. Manufacture/Development of software in India for export. Onsite Consultancy Services for development of software at the client's site abroad. IT enabled products or services such as Back Office Operations, Call Centers, Content Development or Animation, Data Processing, Engineering and Design, Geographic Information System Services, Human Resource Services, Insurance Claim Processing, Legal Databases, Medical Transcription, Payroll, Remote Maintenance, Revenue Accounting Support Centers and Website services "provided payments for such services are received in free foreign exchange". BENEFITS The scheme offers Approves given under single window clearance mechanism Income Tax holiday as per Sec. 10A of the IT Act. Customs Duty Exemption in full on all the imports of Hardware & Software. Center Exercise Duty Exemption in full on indigenous procurement. Central Sales Tax Reimbursement on indigenous purchase. All relevant equipment / goods including second hand equipment can be imported (except prohibited items) Equipment cam also be imported on loan basis / lease. High Speed Data Communication Link provided for the export of software. No separate Import / Export license required. Green Card enabling priority treatment for Government clearances/other services. 100% foreign equity investment in the companies permissible Repartition of foreign currency for payments can be freely
done. Sales in the DTA permissible as per the policy. Use of computer imported for training permissible subject to certain conditions. Depreciation on computers at up to 100% is permissible. Computers can be donated after two years of use to recognized non-commercial Education Institutions/Hospitals without
payment of duty. Net Foreign Exchange Earnings against Export to be achieved over a period of five years. UNIT SETUP Setup Your Unit Who can register? Registration Procedure Steps to Start Operation Location of the STP Unit Starting Operations How to Export Who can register? A Sole Proprietary Concern. A Partnership Firm. An Indian Company. An Indian Subsidiary of a Foreign Company. A Branch office of the foreign company. An existing Software Company operation in India. Conversion of an existing DTA unit to STP unit is also permissible. If an industrial unit is operating both as a domestic unit as well as an STP unit, it shall have two distinct identities with separate accounts. But all the transactions of the imports and exports or supplies affected relating to the 100% EOU activity of the STP unit shall be kept distinctly separate from those made by the other domestic unit of the company. Registration Procedure The following documents to be submitted to STPI, Bhubaneswar:
Application in the prescribed form duly signed by the authorized signatory setting the official seal
(3 copies need to be submitted.) Copy of Boards resolution nominating the authorized signatory. Project report: Justifying the ability of the enterprise as to the potential in manpower expertise, technology segment marketing and customer support arrangements, business plan, type of software development envisaged, copy of Balance Sheet, Profit and Loss a/c, Cash Flow Statement, Profitability Statement, etc. Document evidencing Sole Proprietary concern/Partnership Firm/Company Registration Certificate, Memo of Association, Memo of Articles, Copy of Agreement/MOU/Purchase Order/Letter of Intent with the overseas customer (if any) in support of the business potential. Lease deed/sale deed of the premises In case of an existing unit: Product line to be specified, copy of the Audited Annual Accounts for the last 2 year to be furnished. DD for Rs.2500 drawn in favour of STPI. Steps to Start Operation Upon accord of approval for the 100% EOU the proposed unit has to respond by submitting a willingness letter to abide the terms and conditions of the approval. Legal agreement to be executed in the prescribed from on Rs.100 stamp paper, duly signed by the authorised signatory. DD for Rs. 24,000/- drawn in favour of STPI, Bhubaneswar as an advance towards annual service charges (to be paid in advance) has to be deposited with STPI, which will be adjusted after the financial year, is over as per the following scale. Upon executing the legal agreement, the unit attains the status of 100% export oriented unit under the STP scheme and it as to fulfill the obligations as set forthin the legal agreement, such as commencement of production with in the stipulated period, fulfillment of export obligations, etc. Location of the STP Unit IT Software industry is exempted from zoning regulations for the purpose of establishing the industry. Therefore the STP unit can be established in any location. The units can be established in the STPI Incubation Complex, Priyadarshini market/Tower 2000/Fortune Tower/Infocity or its owned or leased accommodation anywhere within the jurisdictional area of the STPI, Bhubaneswar and the Customs Circle and the premises of the unit shall be amenable to customs bonding. Starting Operatio For allotment of the Importer/Exporter code, apply in the prescribed from to the Addl. DGFT Bhubaneswar. Furnish to STPI a list (in triplicate) of capital goods to be imported, procured indigenously which are relevant to the manufacture / development of the soft ware undertaken by the unit giving the details such as name of the items, quantity, rate for item, total value, rate of duty, value of duty etc. Which are relevant to the manufacturing/development of software. This list will be endorsed by the STPI and given to the unit for filing the same with customs & central Excise. Obtain clearance from STPI for custom bonding license and then apply in the prescribed form to customs & central Excise dept. For private bonded warehouse license. Furnish documents evidencing the owned / leased premises where you propose to carry on the operation of software development together with floor plan of the premises. License is granted in 2 weeks. Furnish a copy of the above license to STPI, Bhubaneswar. If STPI data communication Link is required, apply to STPI in the prescribed form along with deposit of money equivalent to registration fee, installation charges and one-quarter tariff. The link will be given on priority basis to meet the customer requirement. For more details please contact or visit one of our STPI locations. Imports: For import of capital goods which are relevant to the manufacturing /development of software, apply to STPI, BBSR
in the prescribed form duly enclosing the proforma invoice from the seller, for issue of import certificate. In case of items imported on loan basis, please furnish supporting document to show that they are on loan. Second hand capital goods may also be imported. Leasing of capital goods can be sourced from a Domestic/ foreign leasing company. Import / Indigenous procurement of office equipment permitted upto 20% of the total value of the capital goods installed. How to Export Software developed can be exported through Data communication Link / physical Media or software can be developed at customer site abroad by deputing software professionals of the unit. Export of software developed in India: 1. Through Data Communication Link: As soon as the software is exported using Satellite Data Communication link, a software declaration in the prescribed form called SOFTEX form has to be submitted duly filled in, in TRIPLICATE to the STPI for clearance within 30 days from the date of Invoice along with the following documents. Invoice (3 copies). Customer agreement /W.O / P.O Project Details in the from prescribed by STPI, Bhubaneswar. Data transmission details in support of the export of software (in the prescribed form). In cases where data communication link is obtained from a service provider other than STPI, please furnish appropriate documents in support of such connectivity. 2. Physical Media: Obtain GR Form from RBI and submit the same, duly filled in, Along with the customers agreement, invoices in duplicate and shipping bills in triplicate to STPI, BBSR., for clearance. After clearance by STPI, all the documents have to be submitted to Customs for their clearance for export. In case the export is to be made through Postal channel, the PP form, duly filled in and countersigned by the authorised banker, along with the customer’s agreement and invoices have to be submitted to STPI, for clearance. After clearance, the documents should be presented to the Post Office for dispatch.