About Software Technology Parks of India
Software Technology Park of India (STPI), an autonomous society under the Ministry of Electronics and Information Technology, Govt. of India, has been set up with a distinct focus to boost software exports from the country. STPI is constantly working to promote software and IT / ITES exports and to set up and manage infrastructural facilities under various schemes notified by the Government of India from time to time.
The objectives of the Software Technology Parks of India are:
- To promote the development and export of software and software services including Information Technology (IT) enabled services / Bio-IT.
- To provide statutory and other promotional services to the exporters by implementing Software Technology Parks (STP) / Electronics and Hardware Technology Parks (EHTP) Schemes and other such schemes which may be formulated and entrusted by the Government from time to time.
- To provide data communication services including value added services to IT / IT enabled Services (ITES) related industries.
- To promote micro, small and medium entrepreneurs by creating a conducive environment for entrepreneurship in the field of IT / ITES.
Commonly asked questions and answers are enumerated below.
What is STP and how do you join?
Q. What is STP and what are the advantages of becoming a STP unit?
The Software Technology Park (STP) scheme is a 100% export-oriented scheme for the development and export of computer software using data communication links or in the form of physical media including the export of professional services. The major attraction of this scheme is the single point contact service to the STP units.
- STP units were exempted from payment of corporate income tax up to 31st March 2011 under the erstwhile Section 10A / 10B regime. This income-tax exemption is no longer available; current tax positions are governed by the prevailing provisions of the Income Tax Act and applicable notifications.
- All imports of Hardware & Software by STP units are duty free. Import of second-hand capital goods is also permitted.
Q. Who can become a STP unit and how?
An Indian company, a subsidiary of a foreign company, or a branch office of a foreign company can become an STP unit. Further, in order to become a certified member unit under the STP scheme, approval from the competent authority is required. The following steps are involved in obtaining approval:
- An application in the prescribed format for registering and establishing an STP unit is to be submitted to the Software Technology Parks of India.
- The application should be along with the details of the Software Project in terms of strengths, area of expertise, marketing arrangement, business plans, means of finance.
Q. Can I operate from any location in the country?
Yes, operations under the STP Scheme can be carried out from any location in the country.
Q. Being a STP unit, can I take up domestic projects?
Yes, STP units can undertake domestic projects subject to compliance with the current guidelines issued by STPI regarding Domestic Tariff Area (DTA) sales and any applicable performance obligations.
Q. What is the process to be followed after I become a STP unit?
Subsequent to the approval granted by STPI, the approved unit will be signing a legal agreement, with a list of capital goods and indigenous purchases for attestation, to obtain Private Bonded Warehouse Licence from the Customs Department.
Q. What is import and how can I do the same under STP?
A unit operating under STP Scheme can import capital goods (i.e., Computer Hardware & Software and basic infrastructure support) without paying any Customs Duty, as may be levied to the importer in normal cases.
We assist our clients in obtaining STPI Registration.
About Non-STPI registration
Any business entity engaged in the development of export-oriented computer software / IT-enabled services is required to register itself as a Non-STP unit under STPI in order to obtain export certification from a Designated Authority. As per the RBI Master Direction on Foreign Exchange Management (Export of Goods and Services) Regulations, software exporters are required to obtain certification from STPI / the relevant authorities for software exports through data communication links. Non-compliance with these export certification requirements may result in the receipts being treated as General Income rather than as Export Income for income-tax and FEMA purposes, may cause difficulties in foreign-exchange realisation procedures with the authorised dealer bank, and could lead to a violation of FEMA Regulations.
In order to comply with Softex certification requirements, the business entity is required to be registered as a Non-STPI unit. Commonly asked questions and answers in this regard are enumerated below.
Eight frequently asked questions
1. Who can become a Non-STP unit under STPI and how?
Any company / partnership firm / proprietorship engaged in the development of export-oriented computer software / IT-enabled services may register itself as a Non-STP unit under STPI to obtain export certification. To register, the entity must submit the application form along with supporting documents to the jurisdictional Director, STPI, together with the processing fee as prescribed by STPI (currently Rs. 1,000/- plus applicable GST, subject to revision) in the form of a demand draft or through NEFT / online payment in favour of the Director, STPI.
2. Is it mandatory for IT / ITES companies who are into exports, to get registered as Non-STP unit under STPI?
As per the prevailing RBI Master Direction on Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 (as amended from time to time), any company undertaking IT / ITES exports through data communication links is required to submit the prescribed export certification form to the Designated Authority (STPI / SEZ / other authorised body) for certification. For obtaining export certification from STPI (which is a Designated Authority under FEMA), companies need to register either as STP units under the STP scheme or as Non-STP units with STPI, as per current STPI guidelines. Companies registered under the STP scheme may also be eligible for additional benefits, in addition to certification of their software exports.
3. Once the Non-STP registered unit Letter of Permission (LoP) expires after 3 years, what is the procedure to be followed for renewal of LoP?
The Letter of Permission for Non-STP registration is issued for a period of 3 years. During the last three months prior to the expiry of LoP, the Non-STP registered unit should approach Director STPI for the renewal of LoP. There shall be no charges for renewal of LoP.
4. Once the company gets registered as Non-STP unit, what is the procedure to certify Softex forms from STPI?
Non-STP units should register each of their export contracts prior to the submission of Softex against that contract. The unit also needs to submit its projected exports during the next financial year as well as applicable STPI service charges.
5. What is the proof of Non-STP registration?
The company registered under STPI as a Non-STP unit will be issued a Registration Certificate with a validity of 3 years by the respective jurisdictional STPI Director. Renewal of registration will have to be applied for three months prior to the expiry of the registration.
6. Can a Non-STP unit operate from any location in the country?
Yes, operations as Non-STP unit can be carried out from any location in the country. However, registration has to be made with the respective jurisdictional STPI Centre.
7. What are the entitlements of Non-STP registration?
Once Non-STP units get registered with STPI, they will be entitled for submission of Softex for certification as per prevailing guidelines of RBI. However, Non-STP units should also register each of their export contracts prior to submission of Softex against that contract.
8. Is the Softex submission by Non-STP units mandatory?
As per the prevailing RBI Master Direction on Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 (as amended from time to time), any company undertaking IT / ITES exports through data communication links is required to submit the prescribed export certification form to the Designated Authority for certification. The export certification form is required to be filed within the prescribed timeline as per current RBI / STPI guidelines (currently within 30 days from the date of the last invoice raised in that month, subject to revision).
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