SOFTWARE TECHNOLOGY PARKS ( STP)
1.
Introduction
2.
Objectives
of the scheme
3.
Salient
Features
4.
STP
Scheme and its benefits
5.
Setting up
of STP
6.
Approval of
STP units
7.
Software
Technology Parks of
India
(STPI)
8.
Advantages
of STPI
9.
Registration
10.
Procedures
11.
Addresses of
the registered office of STPIs
1.
Introduction
Software Technology Parks (STPs)
are export oriented projects catering to the needs of software development for
exports.
The present provisions of
the STP scheme are contained in Chapter 6 of the Foreign Trade Policy 2004-09.
The procedures are included in Chapter 6 of the Handbook of Procedures and
Appendices to the Handbook of procedures issued under the Foreign Trade Policy
2004-09.
Ministry of Information
Technology, (Ministry of Information Technology) Govt. of India has recognised
the potential for software exports and created the Software Technology Park
Scheme (STP). As a Part of this scheme, MIT has taken the
right step at the right time in establishing the Software Technology Parks of
India (STPI), an autonomous society. STPI centres have
been created at strategic locations across the country.
New fiscal incentives offered under this scheme, Infrastructure created by
STPI and the Investor friendly environment have contributed to a steep growth
in the Software Exports. Software Technology Parks Of
India
is an autonomous organization under Ministry of Communications and Information
Technology, Govt. of India.
In early 90s, when
India
was first seen as a potential center for software development and outsourcing,
two main hurdles were identified in this path:
-
Cumbersome Government
policies and procedures
-
Poor communication
Infrastructure
Hence, a need was felt to
form a premier agency which would fight these hurdles as part of its mandate
and aim at making
India
an IT powerhouse. STPI came into existence in 1991 as an autonomous
organization under Ministry of Communication and Information Technology.
STPI Noida center was the
first ones to come up. This center would serve as promoting NCR as an IT Hub
and controlling other STPI centers in secondary cities in north and central
India
. Today STPI Noida has made NCR as the second largest software exporting
region in the country and has also established 10 successful sub centers.
Goal
To contribute to the
prosperity of the national economy through promotion of exports from the
Software & Services Industry by facilitating all the statutory services of the
Govt., strengthening the Communication Infrastructure and by increasing the
quality consciousness in the Industry.
2.
Objective of
the Scheme
-
To act as front-end to the
Software Industry for the Govt. policies and approvals
-
To establish and provide
Data communication facilities, Computer Facilities and Infrastructure
facilities like Office Space and General Amenities.
-
To promote development and
export of software & the services through technology assessments, market
analysis, marketing segmentation, marketing support & related areas.
-
To train professionals and
to encourage design and development in the field of Software Technology and
Software Engineering.
3.
Salient
features of the scheme
1)
STP/EHTP Units
may be set up anywhere in
India
.
2)
An
organisation setting up a STP complex may import, free of duty, the requisite
infrastructural equipment with no export obligation.
3)
The
centralised infrastructure created by STPs can be assessable by the
educational & research community
4)
A STP/EHTP
unit is a duty free custom bonded area
5)
STP units are
exempted from payment of Income Tax for a block of ten years of its operation
under Section 10A and eligible upto Assessment Year 2009-10.
6)
The
sales in the Domestic market are permissible up to 50% of the production in
value terms subject to net foreign exchange earnings
7)
100% foreign
equity is permissible.
8)
STP units are
allowed to make DTA sale of software through data communication/
telecommunication links. This is subject to the condition that the Director of
STPI (Software Technology Park of India) certifies the valuation of such
software sold in DTA. (Circular No. 54/98-Cus, dated 31-7-1998).
9)
STP units are
allowed to import telematic infrastructure equipments for creating a central
facility for export of software without payment of duty. The central facility
so developed by STP units for transmission of data / software for export are
allowed to be utilised by other STP units and units in DTA for export of
software.
10)
Under STP
scheme, the units are allowed to render consultancy services for development
of software “on site” abroad and consultancy fees received by such units in
convertible foreign currencies are deemed to be exports for the purposes of
fulfillment of export obligation under the Scheme.
The STP located in the same
premises or in an adjoining premises which belongs to the same owner are
allowed to share specific goods as mentioned in Notification 52/2003-Cus and
22/2003-CE dated 31.03.2003.
4.
STP
Scheme and its benefits
-
Approvals are given under
single window clearance mechanism.
-
An STP project may be set
up any where in
India
-
Jurisdictional STPI
authorities clear projects costing less than Rs. 100 million with Indian
Investment.
-
100% Foreign equity is
permitted
-
All the imports of
Hardware & Software in the STP units are completely duty free, import of
second hand capital goods also permitted.
-
RE-Export of capital goods
are permitted
-
Simplified Minimum Export
Performance norms i.e.,
"US $ 0.25 Million or 3
times of CIF Value of imported capital goods whichever is higher & 10% Net
Foreign Exchange Earnings against Export Earnings"
-
Domestic purchases by STP
unit are eligible for the benefit of deemed exports to the equipment
suppliers.
-
Use of computer system for
commercial training purpose is permissible subject to the condition that no
computer terminals are installed outside the STP premises.
-
The sales in the Domestic
Tariff Area (DTA) shall be permissible upto 50% of the export in value
terms.
-
STP units are exempted
from payment of corporate income tax for a block of 10 years (2009-10).
-
The capital goods
purchased from the Domestic Tariff Area (DTA) are entitled for the benefits
like of Excise Duty & Reimbursement of Central Sales Tax (CST).
-
Capital invested by
Foreign Entrepreneurs Know - How Fees, Royalty, Dividend etc., can freely
repatriated after payment of Income Taxes due on them if any.
-
The items like computers
and computers peripherals can be donated to recognised non-commercial
educational institutions, registered charitable hospitals, public libraries,
public funded research and development establishments, organisations of
Govt. of India, or Govt of a State or
Union
Territory
without payment of any duties after two years of their
import.
-
Depreciation on Capital
Goods can be claimed to a maximum limit of 90% over a
period of five years and also the accelerated rate of 10% per quarter for
first year, 8% per quarter for second and 7% per quarter in the third year.
5.
Setting up
of STP
STPs can be set up by
1.
Central
Government,
2.
State
Government,
3.
Public or
Private Sector Undertakings
4.
Or any
combination thereof.
An STP may be an individual
unit by itself or it may be one of such units located in an area designated as
STP Complex by the Ministry of Information Technology.
Under STP Scheme, a software
development unit can be set up for the purpose of development of software,
data entry and conversion, data processing, data analysis and control data
management or call centre services for exports.
6.
Approval of
STP units
Approval shall be granted by
the officer designated by the Ministry of Communication and Information
Technology, Department of Information Technology/Director (STPI). Such officer
shall also exercise powers of adjudication.
Criteria for automatic
approval as under Appendix 14 1B shall be followed.
On approval, a Letter of
Permission (LOP)/ Letter of Intent (LOI) is issued by the Director of the
concerned STP office, the designated officer in the Department of Information
Technology in the Ministry of Communication and Information Technology. This
is construed as license for all purposes.
Besides, the approved unit
should execute a legal undertaking to ensure positive net foreign exchange
earnings and to abide by the terms and conditions of the LOP/LOI
7.
Software
Technology Parks of
India
(STPI)
Software Technology Parks of
India (STPI) was established under the Department of Information Technology,
Ministry of Communications and Information Technology, Government of India on
5th June 1991 with an objective to implement STP scheme, set-up and
manage infrastructural facilities and provide other services like technology
assessment and professional training.
STPI has headquarters at
New Delhi
. STPI’s centres have been grouped under different directories, each group
headed by a Director. Each group acts as a profit center. Annual plans are
prepared by these groups. STPI-Centres as profit centres, meet their expenses
from their corresponding incomes and separate Income & Expenditure account
prepared by the centres. Out of the total income generated from the datacom
income, project consultancies and interest from the banks, the expenditure of
the centres pertaining to the data link charges, establishment and other
administrative expenses are met out from such incomes.
8.
Advantages of STPI
-
STPI
provides incubation facilities for the software exporters, specifically to
the SMEs and start up units. The incubation facilities include ready to use
built up space with plug and play facilities and other backup resources such
as power, DG set, internet enabled workstations, etc.
-
Short gestation periods
and minimal investments in terms of capital have encouraged the software
exporters to start exporting operations.
-
STPI has also been
providing value added services such as web hosting, data centre,
videoconferencing, ISDN connectivity, etc.
Communication:
·
STPI’s
state-of-the-art High Speed Data Communication Network SoftNET,
is available to software exporters at internationally competitive
prices.
·
STPI provides
both fibre and satellite based High Speed Data Communication links and has set
up its own International Satellite Gateways at all its locations.
·
Local access
to International Gateways at STPI centers is provided through Point-to-Point
and Point-to- Multipoint microwave radios for the local loop which has
overcome the last mile problem and enabled STPI to maintain an up time of
nearly 99.9%.
·
The
terrestrial cables (fibre/copper) are also used wherever feasible.
-
With its International and
Domestic fiber bandwidth of capacity STM1, STPI is able to provide Internet
Private Leased Circuit (IPLC) and IP services on fiber. . Implementation or
deployment of the service is faster when compared to conventional bilateral
services.
-
To provide better Quality
of Service (QoS) to the customers in terms of latency and reliability, STPI
is tied up with Tier – 1 Service provider in
USA
for Internet backbone, which is provided to the customer who are availing
STPI’s Internet Service.
STPS set up privately:
State Governments/Private
Software Technology companies have set up Software Technology Parks such as
1)
TIDEL Park, RR
Industries Ltd., IT Park and Hallmark Foundations at Chennai,
2)
IT Park at
Bangalore
,
3)
ICICI
Infotech
Park at
Hyderabad
,
4)
Infinity
at Kolkata,
5)
Fortune
Tower at
Bhubaneswar
,
9.
Registration
An entity has to become a
member of STPI to establish a STP unit. To become a member, an application in
the prescribed format for registering an STP unit is to be submitted to
Software Technology Parks of India. The Competent Authority for approval is
The Director of
the Software Technology Parks of India.
Time frame for processing and granting approvals.
The time taken for granting
approval is generally 15 working days if the applications are complete in all
respects:
Application must accompany
a Demand Draft of Rs. 2500/- drawn in favour of "The Director Software
Technology Parks of India, (name of STPI of that jurisdiction") as processing
fees.
10.
Procedures
-
Application for setting up
unit under STP Scheme
-
Implementation of Letter of Permission / Approval
-
Legal Undertaking for STP
Scheme
-
Registration-cum-Membership
Certificate (RCMC)
-
Application for obtaining
Importer-Exporter Code (IEC)
-
Application for obtaining
Green Card
-
Format for Private Bonded
Warehouse Board
-
Application for Import of
Capital Goods
-
Self Declaration for
Import of Second Capital Goods
-
Chartered Engineer
Certificate for Import of Second Capital Goods
-
Bond Register for imported
capital goods
-
Application for Bonding
request
-
Re-warehousing Certificate
-
Sticker for imported
capital goods
-
Re-Export Invoice
-
Re-Export Bond Register
-
Shifting Invoice
-
Application for DTA sales
-
Application For
Sub-Contracting
-
Format for maintenance of
record on imported CG
-
Sample Application format
for obtaining SIL
-
Application for
enhancement in CIF value of CG
-
Exports Declaration for
Off Shore Exports
-
Application for
reimbursement of CST
-
Sample format of form
C.T.3 (Indigenous Purchases)
-
Format of Bond Register
for Indigenous Purchases
-
Format of Monthly Report
-
Format of Quarterly Report
-
Sample format of
application for obtaining/renewal of Private Bonded Warehouse License
-
Format of Annual Report
-
Format of Tentative Annual
Report
1.
Submission of application
a. An
application in the prescribed format for registering a STP unit establishing a
is to be submitted to Software Technology Parks of India.
b. The
application should be along with the details of the Software Project in terms
of strengths, area of expertise, marketing & business plans, funding sources.
c. Each
application should de duly signed in initials by the competent authority on
each page of the application along with office seal of the company.
d. The
application should be supported by Certificate of Incorporation, under the
Companies Act of 1956, Memorandum of Association, Articles of Association, of
the company. In case of registered companies under Companies Act of 1956
e.
Resume of the Chief Executive heading the STP operations.
f. Head
of the operation/CEO should make a presentation to the commitee on completion
of application formalities.
List of
Enclosures
1.
Memorandum &
Articles of Association for registered firms (public and private limited)
2.
Partnership
Deed for partnership firms
3.
Board
Resolution:
4.
Permanent
account Number
5.
Importer Exporter Code (IEC) - Enclose copy.
6.
Banker's
Certificate:
1.
A certificate
from the bank covering duration of maintaining company account with the Bank.
7.
RBI permission
in case of Foreign Equity:
8.
Form 32 giving
List of Directors on Board:
a.
Applicable in
case of Private / Public Ltd companies.
b.
List of
Directors / Partners with specimen signature:
c.
List of
Directors / Partners of the company with names, addresses, contact numbers,
email, specimen signature. For proprietary concern, details of proprietor.
9.
Project
Report: There is no prescribed format Some important aspects to be covered in
the Project Report:
a.
Background of
company and promoters
b.
Area of
expertise in software development and IT-enabled services
c.
Profiles of
key personnel in the organisation
d.
Strengths and
achievements of the company like potential market for software products /
project developed by the company and in-house expertise in the area of
specialization
e.
Financial
arrangements and feasibility of the proposed setup
f.
Marketing
tie-up, if any
g.
Export
performance for last three years in cases of existing firms & last years
Balance Sheet
h.
Export Orders
in hand / in pipe-line / under registration.
10.
Brochures of
the products or Annual Report for the previous year
11.
Export Order:
Not mandatory for STP registration but, it is preferable to have export order
in hand at the stage of STP registration.
12.
Proof of
Premises:
13.
List of
proposed Plant & Machinery in Four Copies
2. Implementation
of Letter of Permission / Approval
As a project is approved
under STP Scheme the unit has to convey its acceptance to the Terms &
Condition attached to the Letter of Permission/Approval The following process
is involved in implementing the LoP / LoA.
3. Signing of Legal Agreement with STPI
The approved unit is
required to sign a Legal Agreement (LA) with STPI. This LA is mandatory as
commitment for fulfillment of Terms & Conditions of the approval (Export
Obligation etc.) The LA will be executed guaranteeing operations for a period
of FIVE years
§
The LA is to
be executed on Indian Non-Judicial stamp paper of Rs. 100/- procured from the
local civil court
§
It should be
signed by the duly authorized person along with official seal (Common Seal) of
the company in case of "Limited Company").
§
Each page of
the LA should be initialed by the Authorized Signatory with official seal.
§
The DIRECTOR
STPI will sign the LA, after acceptance. The original is retained by the STPI
and a Photocopy will be given to the unit.
Enclosures:
(i)
A Cheque/DD
for Service Charges as applicable from time to time in favour of The Director
STPI.
(ii)
List of
Capital Goods to be imported during the operation with approximate cost for
the project giving details of SL.no ,Description and cost
(iii)
List of
Indigenous Equipment to be purchased giving details of SL.no, Description and
cost.
The DIRECTOR STPI will
attest the List and a letter will be issued to Asst. Commissioner of Customs
with a copy to the unit.
4.
Registration-cum-Membership Certificate
Every approved STP unit is
required to obtain Registration cum Membership Certificate. RCMC for obtaining
benefits of STP Scheme. This certificate is valid for FIVE year ending 31st
March of the licensing year
5.
Importer - Exporter Code
Every Exporter is
required to have Importer - Exporter Code (mandatory as per Foreign Trade
Development & Regulation Act). However, only one IE Code number is sufficient
for one company even if it has multiple offices and export operations. In
case. The company doesn’t have one; the entity has to apply to Director
General of Foreign Trade (DGFT). STPI can also liaison to obtain IEC to STP
applicant
6.
Green Card
An entity can obtain a Green
Card Green Card after signing the LA at no additional cost. It helps the STP
unit to get preferential treatment in matters relating to implementation of
the project, at the level of both Central and State Governments for allotment
of steel, cement, land, finance and other clearances and also allotment of
foreign exchange by RBI, telephones / telex /electricity of foreign exchange
by RBI, telephones/telex/electricity connection, etc. Green Card will be valid
for a period of five year from the date of issue
7.
Customs Bonding (Private Bonded
Warehouse License)
Every STP member is required
to get its premises Custom Bonded whether, it avails the benefits of Customs
Duty/Excise Duty exemption or not. At the present it is mandatory requirement.
The STP unit has to approach
Customs Department to bond the area where it is proposed to start STP
operations. Apply to the jurisdictional Deputy Commissioner (DC), Customs in
the standard form in triplicate with a copy of the following documents,
§
Initial
Application, Memorandum & Articles of Association & Project Report submitted
to The Director STPI.
§
Letter of
Approval from the Director STPI allowing the 100% EoU status to the unit or
Letter of Intent/Permission from SIA as the case may be. Copy of Legal
Agreement
§
Purchase/Lease
deed of building/Premises
§
Floor
plan of the premises.
§
Tentative list
of imported and indigenous CG for setting up the 100% EoU along with the
estimated cost duly certified by Director STPI.
§
"Registration-cum-Membership Certificate" issued by The Director STPI.
§
Importer-Exporter Code
§
Certificate of
incorporation of Companies
§
Green card
issued by STPI.
§
List of
Directors of Company
§
3 Photographs
of Head of the unit.
If all the documents as
indicated above are found to be in order, such licenses are to be issued for a
period of 5 years.
The designated officers,
Deputy Commissioner, Customs will perform the following :
§
Issue of
license for Custom Bond Warehousing & in Bond Manufacture under section 58 &
65.
§
Acceptance of
the required bond.
§
Issue of CT3
forms to enable the unit to procure indigenous CG without having to pay the
excise duty.
After obtaining Private
Bonded Warehouse license from Customs a copy of the same should be forwarded
to STPI.
8. Application for Import of
Capital Goods
Obtaining certification of import from STPI
STP units can import all
capital goods those required for creating STP infrastructure unless otherwise
the same are in the prohibited list. STP units are allowed to import equipment
on Outright Purchase or Loan or free cost or Lease basis after applying for
import certificate in the prescribed format.
Procedure to apply for
Import Certificate:
a)
Application
procedure as per the standard application format.
b)
Proforma
Invoice: The invoice should necessarily state:
a.
Name and
Location of STP unit
b.
Name of
Supplier and Country of Origin
