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Software Technology Parks of India (STPI)

By gkkedia Dt. October 23rd, 2020

In this fast growing world of Electronics and Information Technology, Software Technology Parks of India (STPI) scheme has been announced by the Government vide RBI master circular no 2013-14/14 dated July 01,2013.Accordingly, the Software and IT enabled Exporters are required to get their Invoices Certified through SOFTEX Forms. For this the Entities need to register under the STPI scheme.

The registration can be done either as a STP or Non-STP unit. The brief Introduction of STP unit registration and compliance thereon is as follows.

What is a Non- STP?
Non-STP is any entity (if covered under list given below) that is in the process of becoming an Export-Oriented Computer Software or Information Technology Enabled Service.

It can get itself registered as Non-STP unit with the STPI (Software Technology Parks of India) in order to avail SOFTEX certification. For becoming a non-STP unit with STPI, a company has to get itself registered with STPI.

For becoming a non-STP unit with STPI, the entity desiring registration shall be required to make an application, along with the requisite documents, to the jurisdictional Director.

The application will be accompanied with the prescribed fee in the form of demand draft in favor of the Director of STPI.

Which entities can get registered as non-STP units?
The following enlisted below can get registered as STP units:-

  • Private Limited Companies
  • Public Limited Companies
  • Proprietorship
  • Partnership
  • Limited Liability Partnership
  • One Person Company

Note: Only that entity can get registered as non-STP unit that is into development of Export Oriented Computer Software/IT Enabled Services.

Non-STP Registration Procedure:
The procedure of Non-STP registration in India is quite elaborate and requires multiple compliances.

Application for Non-STP registration has to be made in the prescribed form to the Software Technology Park of India. Legal documents including the Memorandum of Association have to be submitted along with the application. A Board Resolution stating the setting up of the STP unit, duly signed by the persons who are authorized to submit the application form. Resume of the CEO or the person heading the operation 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.
  • 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
  • Export certification
  • Duty payments and debonding the unit.
  • Obtaining permission from the Ministry of Finance for external borrowings.

 
An entity registered as a Non-STP unit with the STPI shall be issued a Registration Certificate (also referred to as the Letter of Permission) by the jurisdictional STPI Director, which shall be valid for a period of 3 years.

Compliances for Non-STP Units:
The registered non-STP units will be required to submit the quarterly and annual reports to the respective STPI centers.

The registered non-STP unit shall be required to file the Softex Forms as per the RBI guidelines.

Service charges have to be paid by the registered non-STP unit on the basis of value of the Export contracts registered.

The non-STP unit shall be required to retain 20% of the service charges deposited in case the forms are required to be returned for non-certification of the Softex forms.

If the non-STP unit exceeds the limit of a particular slab of Softex certified for a financial year, the unit will have to deposit the charges for the next slab by adjusting the amount that has already been paid by it.

Renewal of Letter of Permission:
The Letter of Permission (LoP) issued by the STPI is valid for a period of 3 years. If a non-STP unit wants to renew the LoP, it would be required to approach the Director of the STPI. The application for renewal has to be made during the last three months before the expiry of the LoP.

The renewal of the LoP shall be free of cost.

Procedure for certification of Softex Forms:
A non-STP unit is required to submit Softex Form against each of its export contract. Before, submitting the Softex form, it is necessary that the unit gets its export contract(s) registered. It is also mandatory for the Non-STP unit to submit its project imports in the next financial year to the STPI. The applicable service charges are also required to be submitted.

Services Charges for Non-STP units:
The service charges implemented on a non-STP unit shall be dependent on the value of the registered contracts. The following service charges slabs have been decided:

Time limit for Filing of Softex Forms:
A non-STP unit is required to file Softex Form within 30 days from the date of raising the last invoice in a particular month.

Circumstances for Cancellation of Softex Forms:
Under certain circumstances, when the raised invoice does not receive the desired remittance, the non-STP unit should approach the RBI and ask for cancellation of the certified Softex forms. Some of these situations could be –

  • Penalty raised by the foreign company.
  • Not raising of the credit note.
  • Total cancellation of the project by the foreign company.

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S. No Annual Export Turnover Annual Service Charges (INR)
1 Upto 12.50 lakhs 4,000
2 12.50 lakhs-25 lakhs 8,000
3 25 lakhs – 50 lakhs 16000
4 50 lakhs – 3 crore 55,000
5 3 crore – 10 crore 1,10,000
6 10 crore -25 crore 2,25,000
7 25 crore – 50 crore 2,50,000
8 50 crore- 100 crore 3,50,000
9 100 crore- 500 crore 5,75,000
10 500 crore- 1000 crore 6,00,000
11 Over 1000 crore 6,50,000