Start-up software companies often provide solutions that ease the working and processes of other companies. However, in order to provide effective solutions, they require technical efficiency, knowledge, hardware and finances. To encourage start-ups to export computer software and professional services of global standards, the government has initiated the Software Technology Parks Scheme.
The Software Technology Parks scheme by the government promotes the export of computer software and professional services. This scheme enables start-ups to import duty-free hardware and software solutions that will enable them to deliver software and services that meet international quality standards.
How can a software company benefit from this scheme?
A software company can benefit from this scheme in the following ways:
- Approval to set-up an STP unit anywhere in India
- Single window clearance system for approvals
- Authorisation to re-export capital goods
- 100% foreign equity
- Ease in importing duty-free hardware and software, and second-hand capital goods
- Access to computer system for training purposes
- Central Sales Tax reimbursement on indigenous items procurement
- Central Excise Duty Exemption in full on indigenous procurement
- Up to 50% of export in value terms if sales are made in Domestic Tariff Area (DTA)
- 100% depreciation on capital goods over a period of five years
- Authorisation to donate computer peripherals to recognised non-commercial education institutions, registered charitable hospitals, public libraries, public funded research and development institutions, organisations of Government of India, or Government of a State or Union Territory without payment of duty after two years of their import
Who is eligible to apply for this scheme?
The following companies are eligible to apply for this scheme:
- Indian software companies
- A subsidiary of a foreign company
- A branch office of a foreign company
How can a start-up software company apply for this scheme?
Start-up software companies can apply for this scheme online here.
In order to become a certified member under the STP scheme, the application for this scheme needs to be sent to the Director, Software Technology Parks of India to seek approval for the same.
What documents are required to apply for this scheme?
The following documents are required to apply for this scheme:
- A gist of the application form
- Three copies of the application form
- 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 (example, leave an license)
- Valid data communication proof (example, receipt of payment, service acceptance letter)
- Bank certificate