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FAQs

1. What is STP Scheme ?
Ans. The Software Technology Park (STP) scheme is for providing facilities to IT industry for undertaking software development and IT enabled services for 100% exports using data communication links in the form of physical exports including export of professional services. Individual units can also be allowed to do business in the domestic (Indian) market up to 50% of the exports. STP units can also undertake commercial training. STP units also regulate the IT business through licensing, acting as a link between the customer and Government authorities and agencies. Under the scheme, IT industries are provided certain concession in duties, levies and taxes.

2. Who can become a STP member and how?
Ans. Following can become a STP member :
  • An Indian company
  • A subsidiary of foreign company
  • A branch office of foreign company

In order to become a certified member unit under STP scheme, approval from the competent authority i.e. Director, STPI is required. Following documents are required for obtaining approval:
  • Export Obligation
  • Application in triplicate
  • Project report
  • Board resolution
  • Memorandum or Articles of association
  • Export order / contract or MOU
  • List of Directors
  • Importer - Exporter code number
  • Proof of STP location premises ( e.g. Leave and licence)
  • Valid data communication proof (e.g. Receipt of payment, service acceptance letter)
  • Bank Certificate
approval procedure, STP unit has to sign Export Obligation Agreement under STPI and approach the Assistant Commissioner of Customs for bonding your office area under Section 58 & 65 of Customs Act 1962.

3. What is the Investment criteria?
Ans. Only projects having a minimum investment of Rs. 1 crore in plant and machinery shall be considered for establishment as EOUs under the scheme.

4. Can we change our company name after STP approval?
Ans. Yes, change of company name is possible after STP approval. Certificate from Registrar of Companies needs to be submitted to STPI office.

5. What is IPLC?
Ans. An IPLC (international private leased circuit) is a point-to-point private line used by an organization to communicate between offices that are geographically dispersed throughout the world. International Private Leased Circuits (IPLC) are the basic building blocks for international communications, providing raw bandwidth for global communications networks. These point-to-point private line services are dedicated to the customer's exclusive use providing quality reliable digital transmission seamlessly integrating data, voice and imaging services. A wide variety of applications are supported by IPLC including internet access, LAN-to-LAN connectivity, telemedicine, video and teleconferencing.

6. What is the advantage of becoming a STP unit?
Ans. STP units can avail of following advantages under STP scheme :
  • Custom duty exemption
  • Excise duty exemption
  • Central Sales Tax reimbursement
  • STP units are exempted from Corporate Income Tax till 2010
  • Sales in Domestic Tariff Area (DTA) upto 50% of the FOB value of exports permissible.

7. Can we change our STP location after approval?
Ans.Yes

8. What happens if a unit is unable to succeed after trying for a year or so?
Ans.The unit can cease to become STP member at any moment of time subject to payment of customs and excise duty on the imported and indigenous equipments and the penalty imposed by the appropriate authority under the Foreign Trade Regulatory Act 1992 for non-fulfillment of conditions of approval.

9. Is it mandatory to get the company registered in India?
Ans.Yes, it is mandatory to get the company registered in India with the Registrar of Companies under the Companies Act 1956.

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Page last updated on February 19, 2015
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