SOFTWARE TECHNOLOGY PARKS OF INDIA

What is Software Technology Parks of India?

STPI stands for Software Technology Parks of India. When it comes to the information technology sector, India is one of the leading countries. Software Technology parks have been one of the significant contributing entities to the information technology sector.
The Software Technology Parks of India (STPI) are a society which was established by the Indian Ministry of Electronics and Information Technology in India. STPIs aims at promotion and boosting of the Software Exports from India. Training, consulting, and implementation services via internal engineering resources are also provided.
These also indulge in System Integration, Services Cover Network Design, Maintenance and Operations of application networks and other facilities available in varied areas. In India, STPIs also follow to ISO 9001 certification. The process management of the STPIs is based on the Quality Management System.

Advantages of Software Technology Parks of India:-

1. Exemption in full of Customs Duty on imports
2. Exemption in full of Central Excise Duty on indigenous procurement
3. Equipment from abroad can be imported on a loan or lease basis
4. Permission of 100% Foreign Direct Investment via automatic route
5. Permission to import al necessary equipment or goods including second hand equipment, except the legally prohibited items
6. Using the imported computer for permissible training, subject to certain conditions
7. Accelerated rates of depreciation up to 100% is permissible on computers
8. Sales in the Domestic Tariff Area (DTA) with up to 50% of the exports permissible
9. As per Section 10A of the Income Tax Act, the STPs are given Income tax holiday
10. The STPs have green card enabling priority treatment for government clearances and such other services

The obligation on STP units:-

1. Development or production can be carried out only in the customs bonded area
2. The operations have to be commenced within the gestation period
3. Giving intimation to the STPI regarding the commencement of operations
4. The constant renewal of the customs bonding license
5. Maintaining the necessary records and documents
6. Obtaining Export certification
7. Duty payments and debonding the unit
8. Obtaining permission from the Ministry of Finance for external borrowings

Procedure for Registration of STIP Units:-

1. Application for STPI registration has to be made in the prescribed form to the Software Technology Park of India.
2. Legal documents, including the Memorandum of Association, have to be submitted along with the application.

3. A Board Resolution stating the setting up of the STP unit, duly signed by the persons who are authorized to submit the application form.
4. Resume of the CEO or the person heading the operation
5. Detailed Project that has the following elements:
• Profile of the company
• Background of the promoters
• Areas of expertise and the proposed services to be offered
• Marketing strategies and arrangements
• Manpower plan
• Future plans
• A detailed list of capital goods that have been planned for procurement, from India as well as abroad
• A copy of the floor plan of the STP, duly certified by an architect
• Details of the foreign collaborator
• A summarized write up on the parent company and the activities that have been proposed for being carried out by it
• Copy of the invoice issued by the Internet Service Provider
• Copy of the Rent Agreement, if any
6. Financial statements of the company, including:
• Projected Balance sheet
• Projected P&L Account
• Workings of Export
• Projected Cash Flow and fund flow statement
• Financials for five years that projects income from capital expenditure, cash flows, and operations
• Details pertaining to the estimated number of employees and the wage bill for the initial five years
• Details pertaining to the aggregate foreign exchange outgo and comings in the first five years
• Other documents like the copy of the service agreement that has been signed with the parent company/clients/PO or the Master Services Agreement.
• Filing the Monthly SOFTEX form, quarterly and annual returns, with STPI within the regulated time frame and the prescribed fee.

Documents /Information required to be provided to RBI for obtaining permission for delayed submission of Softex :-

1. Import/Export (IE) Code.
2. Reason for late submission (valid reason expected and supporting documents to corroborate exporters’ argument for delay).
3. Proof of submission of Softex Forms for the previous years.
4. Proof of submission of Softex Forms for the subsequent years.
5. Total number of Softex Forms to be submitted, giving full details as to the amount of each Softex Form, along with the month and year of the invoice pertaining to the Softex Form.
6. Copy of rejection letter if any.
7. Name of STPI/SEZ Center to which Softex Forms are being submitted.
8. Condonation given if any, earlier:
a. Date of Condonation
b. Total number of Softex Forms
c. Period of Softex Forms
9. Undertaking (on letterhead of the Non-STP unit – Stamp and signed by an authorized signatory) that no Softex Forms, other than the ones mentioned in the letter are pending for submission to STPI.
10. Whether actual exports of the lot of Softex Forms not submitted to STPI has already been effected, if yes, when?
11. If exports have already been effected, whether export proceeds have been realized?
12. The name of the AD Bank and its code.
13. Details of invoices as certified by AD Bank, viz, Invoice value, number, date and currency, client name, Softex Number, amount realized and date of realization, FIRC number, etc.
14. Undertaking from exporter (on letterhead of the Non-STP unit – Stamp and signed by an authorized signatory) (confirming lapses for delay in submission of Softex Forms would not recur in future).