The STP Scheme is a 100% Export Oriented Scheme for setting up of software
development and IT Enabled Services firm in India for the development and export
of Computer software and IT enabled services using data communication links or
physical media. This scheme is unique in its nature as it focuses on one
product/sector, i.e. Computer Software and IT Enabled Services.
The following activities are covered under the scheme:
- Manufacture/Development of software in India for exports.
- 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.
- Sales in the Domestic market are also permitted to the extent of 50% on FOB value of exports with prior permission.
Scheme Benefits & Highlights
- The Central Government, State Government, Public or Private sector undertakings or any combination thereof may set up the Software
Technology Park (STP). A STP unit may be a stand-alone unit or one of the units located in any STP complex.
- A company may set up STP unit anywhere in India.
- Foreign equity permissible upto 100%.
- 100% foreign equity investment in the companies permissible under the 'Automatic Route' of RBI.
- Approvals are given under single window clearance.
- STP units are exempted from Corporate Income Tax till 2010.
- STP unit is a duty free bonded area under section 65 of the Customs Act, 1962.
- 100% Customs Duty exemption on imports of Capital Goods.
- 100% Excise Duty exemption on indigenous Capital Goods procurement.
- Import of Capital Goods on outright purchase, loan, free of cost and lease basis is permitted.
- Re-Export of capital goods is permitted.
- Central Sales Tax reimbursement on indigenous items procurement.
- Green card enabling priority treatment for government clearances / other services.
- Sales in the DTA (Domestic Tariff Area) up to 50% of the foreign exchange earned by the STP unit.
- Inter Unit Transfer between EOU/STP/EHTP/EPZ is permitted.
- Sub-contracting between EOU/STP/EHTP/EPZ is permitted.
- Simplified Net Foreign Exchange Earnings (NFEP) & Export Performance (EP) norms, as applicable at the time of signing STP agreement.
- Simplified depreciation norms on Capital Goods.
- Use of computer system for training purpose permissible, provided no computer terminals has been installed outside the STP units premises.
- Capital invested by Foreign Entrepreneurs, Know-How Fees, Royalty, Dividend etc., can be freely repatriated after payment of Income Taxes due on them, if any.
- The items like computers and computers peripherals can be donated to recognized non-commercial educational institutions, registered charitable hospitals, public libraries, public funded research and development establishments, organizations of Govt. of India, or Govt. of a State or Union Territory without payment of any duties.
Single Window Clearance Services
- Registration under STP Scheme. On approval, a Letter of Permission (LoP) shall be issued with an initial validity of 3 years, by which time unit should have commenced production. Once unit commences production, LoP issued shall be valid for a period of 5 years for its activities.
- Approvals for duty free Imports including Second Hand Capital Goods.
- Approval for Excise Duty exemption for procurement of Indigenous Capital Goods.
- Green Card issuance.
- Attestation of Software Export Declarations.
- Re-export of Capital goods imported on loan basis as well as Repair/Replacement.
- Shift / Inter Unit Transfer of capital goods.
- Permission for Capital Structure Refinement and Project Expansion.
- Permission for Change of Company Name and Location.
- Reimbursement of the CST paid on Domestic Purchases.
- Approval for Sub-contracting.
- DTA Sales permission.
- De-bonding of equipments.
- Renewal of Letter of Permission (LoP) for a period of 5 years at a time.
- Exit from scheme as per policy provision.