STP scheme is a 100% export oriented unit (EOU) scheme for development and export of software using data communication or physical media, or by onsite consultancy. STPI acts as the front end on the behalf of the Government of India to take care of all the statutory services.
The benefits & highlights of the scheme are given below:
- Approvals are given under single window clearance scheme.
- A company can setup STP unit anywhere in India.
- 100% foreign equity is permitted and approved by jurisdictional Director of STPI.
- All the imports of hardware & software in STP units are completely duty free.
- Import of the second hand capital goods is also permitted.
- Unit shall be a positive net foreign exchange earner. Net foreign exchange earnings (NFE) shall be calculated cumulatively from the commencement of production.
- Use of computer system for commercial training purposes is permissible subject to the condition that no computer terminals are installed outside the STP unit.
- 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.
- The capital goods purchased from the domestic tariff are (DTA) are entitled for benefits like exemption of excise duty & reimbursement of central sales tax(CST)
- Capital investment by foreign entrepreneurs, know-how fees, royalty, dividend etc., can be freely repatriated after payment of income taxes due on them, if any.