The STP scheme is a 100 percent export oriented scheme for the development and export of computer software, including export of professional services using communication links or physical media.
This scheme is unique in its nature as it focuses on one product/sector, i.e. computer software. The scheme integrates the government concept of 100 percent Export Oriented Units (EOUs) and Export Processing Zones (EPZs) and the concept of Science Parks/Technology Parks, as operating elsewhere in the world.
"The unique feature of the STP scheme is the provisioning of single-point contact services for member units, enabling them to conduct exports operations at a pace commensurate with international practices"
- Approvals are given under single window clearance scheme.
- A company can set up STP unit anywhere 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 is also permitted.
- Simplified Minimum Export Performance norms i.e., "Positive Net Foreign Exchange Earnings"
- Use of computer system for commercial training purposes 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 up to 50% of the export in value terms.
- STP units are exempted from payment of corporate income tax up to 2011.
- The capital goods purchased from the Domestic Tariff Area (DTA) are entitled forbenefits like exemption of excise Duty & reimbursement of Central Sales Tax (CST).
- 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 after two years of their import.
- 100% Depreciation on Capital Goods over a period of five years.
Units undertaking to export their entire production of goods and services may be set up under the Electronic Hardware Technology Park (EHTP) Scheme. Such units may be engaged in manufacture and services.
Commensurate with the policy to give a special thrust to export of electronic hardware, such units would be encouraged to be set up under the aforementioned export oriented scheme.Scheme Benefits and Highlights
- EHTP unit may import free of duty all types of goods, including capital goods as defined in the EXIM Policy, required by it for manufacture, services, production and processing or in connection therewith.
- The units shall also be permitted to import goods, including capital goods, free of cost or on loan from clients required for the approved activity.
- EHTP units may procure goods required by them for manufacture, services, production and processing or in connection therewith, duty free, from bonded warehouses in the DTA set up under the Exim Policy.
- Positive Net Foreign Exchange Earnings against Export Earnings to be achieved over a period of five years.