This scheme 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 for Export development using data communication links or in the form of physical media including export of professional services. The unique feature of the STP scheme is the provisioning of single-point contact services for member units.
The benefits under the STPI:
- Approvals are given under single window clearance mechanism. An STP project may be set up any where in India.
- Jurisdictional Directors have the powers to approve import of capital goods (net of taxes) not more than US$ 20 million.
- 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 are permitted. Simplified Minimum Export Performance norms.
- Use of computer system for commercial training purposes is permissible subject to the condition that no computer terminals are installed outside the STP The sales in the 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 DTA are entitled for benefits like exemption of excise Duty & reimbursement of Central Sales
- Capital invested by Foreign Entrepreneurs, Know-How Fees, Royalty, Dividend etc., can be freely repatriated after payment of Income Taxes due on them, if The items like computers and computers peripherals can be donated to recognized non-commercial institutions, organizations of GOI or UTS without payment of any duties after two years of their import.
- 100% Depreciation on Capital Goods over a period of five years. Net Foreign Exchange Earnings to be positive.
- Domestic purchases by STP unit are eligible for the benefit of deemed exports to the equipment suppliers.
- Use of computer system for commercial training purpose is permissible subject to the condition that no computer terminals are installed outside the STP Sales in the DTA shall be permissible up to 50% of the export in value terms.
- STP units are exempted from payment of T for a block of 10 yrs (up to 2009-10). The capital goods purchased from the Domestic Tariff Area [DTA] are entitled for the benefits like levy of Excise Duty & Reimbursement of CST.
- Capital invested by Foreign Entrepreneurs Know – How Fees, Royalty, Dividend etc., can freely repatriated after payment of Income Taxes due on them if any. Depreciation on Capital Goods above 90% over a period of five years and also the accelerated rate of 7% per quarter during the first two years subject to an overall limit of 70% in the first three years.
- Call centre permitted under the STPI scheme.
All Services as listed in appendix.54 of hand book of procedures are eligible Service providers eligible for recognition as ’Service Export House’.