Software Technology Parks of India (STPI) Unit

A. Introduction

Software Technology Parks of India (STPI) is a society established in 1991 by the Indian Ministry of Electronics and Information Technology with the objective of encouraging, promoting, and boosting the export of software from India. It has two units i.e. Non – STP Unit and STP Unit.

The Software Technology Park (STP) is a 100 percent Export Oriented Scheme for the development and export of computer software, including the export of professional services using communication links or physical media.

B. Why Non-STP Registration required:

When physical goods are exported, they pass through the Customs Office, whereas when the Software is exported, it goes through media or internet (data communication links). Hence in order to track the export of software, Reserve Bank of India (RBI) announced the issue and submission of SOFTEX forms. STPI is the administrative authority for software export valuation and certification of SOFTEX form in place of Customs.

As per RBI circular dated 13th September 2013, the exporters of the software will have to declare all the export transactions in SOFTEX, including those less than US$25,000. This means, all companies exporting software, irrespective of the value, have to register as Non-STPI units and file SOFTEX forms.

C. 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.

STP Unit Benefits:

1. Simplified Minimum Export Performance norms i.e., “Positive Net Foreign Exchange Earnings”.

2. The sales in the Domestic Tariff Area (DTA) shall be permissible up to 50% of the export in value terms.

3. In case the immovable property is purchased or in case of rented property, the stamp duty on leave and license agreement for 100% EOU unit shall be

4. In 100% EOU, under the electricity bill, the duty component shall be

5. All the imports of Hardware & Software in the STP units are completely duty

6. The green card helps the STP unit to get preferential treatment in matters relating to the implementation of the project at both Central and State Government

D. STP Registration Fees:

Application fees are Rs. 2,950 (Rs. 2,500 + 18% GST) and Annual Service Charge (ASC) to be paid for the first three years in advance including GST. Annual Service charges shall be charged on the projected export turnover.

E.STP Unit Compliance:

1. Reporting Compliance –

a) Monthly Progress Reports (MPR) & Quarterly Progress Reports (QPR):

 All units are required to submit Monthly Progress Reports & Quarterly Progress Reports by 7^th of the month on completion of the previous month and by 10^th of the month on completion of the previous quarter respectively, in the prescribed format. It is a mandatory requirement. Units that are irregular in submitting MPRs & QPRs can be denied benefits of STPI.

b) Annual Performance Reports (APR): 

Annual Performance Report should be submitted as per the prescribed format before 30^th June every year.

2. Other Compliance: 

Distinct Identity: If an industrial enterprise is operating both as a Domestic unit as well as the STP unit, it shall have two distinct identities with separate accounts, including separate bank accounts. It is, however, not necessary for it to be a separate legal entity, provided the company maintains separate records for Domestic Sales and Export Sales effected by the EHTP/STP units.

A. Maintain the accounts as under: 

1. Maintenance of Sales

2. Maintenances of Fixed Asset Registers

3. Maintenance of Foreign Inward Remittance Certificate file (FIRC) & Bank Realization Certificate (BRC) file

4. Maintenance of Contract file, where copies of contracts received from parties are

B. Banking: 

The units are free to have as many bank accounts as it desires but shall have to designate a single branch of the bank to whom all export documents will be submitted. In other words, the work of handling all shipping documents & realization of export proceeds will have to be entrusted to this designated bank branch.

Conclusion: 

India is the topmost offshoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. Export revenue of the industry is expected to grow 7-9 percent year-on-year to US$ 135-137 billion in FY19. The industry is expected to grow to US$ 350 billion by 2025 and BPM is expected to account for US$ 50-55 billion out of the total revenue. IT units should become an STP unit and take the benefits from it.