ABOUT STPI...

BALASUBRAMANYA B N (CCI STUDENT....) (44679 Points)

28 July 2010

1. WHAT IS STP SCHEME?

A. The Software Technology Park (STP) scheme is for providing facilities to IT industry for undertaking software development and IT enabled services for 100% exports using data communication links in the form of physical exports including export of professional services. Individual units can also be allowed to do business in the domestic (Indian) market up to 50% of the exports. STP units can also undertake commercial training. STP units also regulate the IT business through licensing, acting as a link between the customer and Government authorities and agencies. Under the scheme, IT industries are provided certain concession in duties, levies and taxes.

2. WHAT ARE THE SERVICES PROVIDED BY STPI UNDER STP SCHEME?

A. The major attraction of STP scheme is a single point contact service to the STP unit:

Approval as a STP unit
Approval for enhancement of capital goods
Issuance of green card
Guidance for custom bonding
Certification of imports
Certification of exports
Permission for excise exemption
Permission for DTA sales
Permission for re-export
No objection certificate for change of name
No objection certificate for change of location
CST reimbursement

3. WHAT ARE THE CHARGES FOR STP REGISTRATION?

A.Application processing fees and three years advance annual service charges considering your pojected export turnover.

Application processing fees :Rs. 2500.00

Service charges on the basis of projected exports :

Below Rs. 50 lakhs per annum	Rs. 15000.00 per annum
Rs. 50 lakhs to Rs. 3 crores per annum	Rs. 50000.00 per annum
Above Rs. 3 crores per annum	Rs. 100000.00 per annum

4. WHO CAN BECOME A STP MEMBER AND HOW?

A.Following can become a STP member :

An Indian company
A subsidiary of foreign company
A branch office of foreign company

In order to become a certified member unit under STP scheme, approval from the competent authority i.e. Director, STPI-Mumbai is required. Following documents are required for obtaining approval :

Gist of application
Application in triplicate
Project report
Board resolution
Memorandum or Articles of association
Export order / contract or MOU
List of Directors
Importer - Exporter code number
Proof of STP location premises ( e.g. Leave and licence)
Valid data communication proof (e.g. Receipt of payment, service acceptance letter)
Bank certificate

After approval procedure, STP unit has to sign Export Obligation Agreement under STPI and approach the Assistant Commissioner of Customs for bonding your office area under Section 58 & 65 of Customs Act 1962.

5. WHAT ARE THE OBLIGATIONS ON UNITS UNDER THE STP SCHEME?

A. The obligations on units under the STP Scheme:

The Development/production shall be carried on in customs bonded area.
Regular renewal of customs bonding licence.
Commencement of operations within the gestation period.
Intimation to STPI about the commencement of operations.
Fulfillment of obligations as per the Foriegn Trade Policy.
Realisation of amounts due in stipulated period.
For external borrowings,obtain permissions from Ministry of Finance.
Maintain separate accounts for the operations of STP unit.
Maintain prescribed records and documents.
Obtain Export certification.
Submit Monthly,Quarterly and Annual reports.
Payment of duties on debonding of STP unit.

6. WHAT IS THE ADVANTAGE OF BECOMING A STP UNIT?

A. STP units can avail of following advantages under STP scheme :

Custom duty exemption
Excise duty exemption
Central Sales Tax reimbursement

Corporate tax exemption on 90% export turnover as per Section 10A of Income Tax Act.

· Sales in Domestic Tariff Area (DTA) upto 50% of the FOB value of exports permissible

7. WHAT IS THE INVESTMENT CRITERIA?

A. Only projects having a minimum investment of Rs. 1 crore in plant and machinery shall be considered for establishment as EOUs under the scheme.

8. WHAT KIND OF INVESTMENT IS ALLOWED?

A. 100% foreign direct investment, NRI-repatriable, NRI-non repatriable, resident holding and combination thereof allowed.

9. CAN I SET UP THE OPERATIONS IN MY OWN PREMISES?

A. Software industry being a non-polluting industry can be set up in any location. The STP unit can be an individual unit by itself or it can be one such unit located in an area designated as STP complex

10. IF WE TAKE SOME LOCATION ON RENTAL BASIS THEN CAN WE CHANGE THE LOCATION SUBSEQUENTLY?

A. Surely the location can be changed but with prior approval from STPI.

11. WHAT IS THE MINIMUM TIME FRAME REQUIRED TO BECOME A STP?

A. Depending on the pattern of investment the following time frame is involved:

Type of investment	Authority for approval	Time
100% resident holding and 100% FDI under automatic route of RBI	Director, STPI	One Week

12. HOW MANY COMPANIES ARE EXPORTING UNDER THE STP SCHEME?

A. There are 900 plus units registered from Mumbai under the STP scheme

13. WHAT ARE THE ACTIVITIES COVERED UNDER THE STP SCHEME?

A. The obligations on units under the STP Scheme:

Development of IT Software/ Electronic Hardware for Exports.
Rendering IT enabled services for software exports.
Execution of Onsite Consultancy projects at customer site abroad.

14. BEING A STP UNIT CAN I DO DOMESTIC PROJECT?

A. Yes, STP unit can do the domestic business subject to 50% of foreign exchange earned with prior permission of Director of STPI.

15. IS CUSTOOM BONDING OF THE STP UNIT MANDATORY?

A. Yes, custom bonding of the STP unit is mandatory.

16. CAN WE ENHANCE OUR APPROVED CAPITAL GOODS LIMIT?

A.Yes, Director-STPI can approve the capital goods limit.

17. CAN WE CHANGE OUR COMPANY NAME AFTER STP APPROVAL?

A. Yes, change of company name is possible after STP approval. Certificate from Registrar of Companies needs to be submitted to STPI office.

18. CAN WE CHAGE OUR STP LOCATION AFTER APPROVAL?

A.Yes.

19. DOES STPI HELP IN FINDING SOFTWARE PROFESSIONALS OR ELSE WHAT ARE AGENCIES WHO CAN HELP?

A. The STPI does not have an infrastructure to formally help the upcoming STP units. However, through consultants and advertisement in newspapers the required kind of manpower can be found.

20. WHAT HAPPENS IF A UNIT IS UNABLE TO SUCCEED AFTER TRYING FOR A YEAR OR SO?

A. The unit can cease to become STP member at any moment of time subject to payment of customs and excise duty on the imported and indigenous equipments and the penalty imposed by the appropriate authority under the Foreign Trade Regulatory Act 1992 for non-fulfillment of conditions of approval

21. IS IT MANDATORY TO GET THE COMPANY REGISTERED IN INDIA?

A. Yes, it is mandatory to get the company registered in India with the Registrar of Companies under the Companies Act 1956.

22. CAN I CONVERT EQUIPMENT ALREADY IMPORTED ON LOAN OR FREE OF COST INTO THE EQUITY OF THE COMPANY AT A LATER DATE IF REQUIRED?

A. There is a provision by which with the approval of RBI the capital goods already imported can be converted into the foreign equity of company.

23. CAN WE TAKE CST REIMBURSEMENT AS A STP UNIT?

A. Yes, CST reimbursement can be taken as a STP unit against 'C' Form only.

24. ENTITIES WHO CAN SET UP A UNIT?

A.Entities who can set up a unit are :