1.0 Attention is invited to the Ministry of
Commerce Notification No. 33/(RE)/ 92-97, dated 22nd March, 1994, notifying the
above Scheme. In exercise of the powers conferred in sub-section (1) of section
3 of the Foreign Trade (Development and Regulation) Act, 1992, the Central
Government hereby notifies the following amended Software Technology Park (Sir)
Scheme. 2.0 Software Technology Parks (STP) Scheme : 2.1 The Software Technology Park (STP) Scheme is a
100 per cent Export Oriented Scheme for undertaking software development for
export using data communication link or in the form of physical exports
including export of professional services. 2.2 A Software Technology Park (STP) may be set up
by the Central Government, State Governments, public or private sector
undertakings or any combination thereof. An STP may be an individual unit by
itself or it may be one of such units located in an area designated as STP
Complex by the Department of Electronics. 2.3 The scheme is administered by the Department of
Electronics, Government of India, through Directors of respective Software
Technology Parks which form part of the Software Technology Parks of India, a
society established by the Department of Electronics, Government of India and
registered under the Societies Registration Act, 1860. An application in the
prescribed format for establishing a Software Technology Park unit may be
submitted to the Chief Executive of the Software Technology Park Complex along
with the details of the software project. Such application will be considered
by an Inter-Ministerial Standing Committee (IMSC) constituted under the
Chairmanship of the Secretary, Department of Electronics, Government of India,
notified, vide Gazette No. 294 [G.S.R. No. 526(E)] dated August 13, 1991,
published in sub section (i) of section 3 of Part II of the Extraordinary
Gazette of India and reconstituted by the Notification No. S.O. 177(E), dated
February 22, 1993, published in Part II, section 3, sub-section (ii) of the
Extraordinary Gazette of India. 2.4 An STP unit may import, free of duty, all types
of goods, including capital goods, required by it for manufacture, production
or processing provided they are not prohibited items in the Negative List of
imports. The Software Technology Parks of India (STPI), may also import, free
of duty, all types of goods, for creating the central facility for use by
software development units in the STP Complex. STP units shall also be
permitted to import capital goods on loan from clients for specified periods
for executing specified projects. 2.5 The STP unit will be a duty-free custom-bonded
area. The normal procedure applicable for custom bonding will be followed. 2.6 The entire software (including consultancy
fees, software services and sale of software) developed by the STP unit shall
be exported except the sales in the Domestic Tariff Area (DTA). The sales in
the DTA shall be permissible up to 25 per cent of the production in value terms
made by the STP unit. 2.7 The following supplies shall be counted towards
the fulfilment of the export obligation of the STP unit: 2.7-1 Supplies specified in para 121 of the EXIM
Policy, 2.7-2 Supplies effected in DTA against payment in foreign exchange. 2.8
The STP unit shall be eligible for the following benefits. 2.8-1 Tax holiday: The STP will be exempted from payment of corporate
income-tax for a block of five years in the first eight years of its operation. 2.8.2 100 per cent foreign equity : Foreign equity up to 100 per cent is permissible in
the case of STP units. 2.9 Supplies made from DTA to an STP unit will be
regarded as deemed exports and will be eligible for the benefit specified in
paragraphs 106 and 122 of the Export and Import Policy (1992-97), Such benefits
shall be available provided the goods supplied to the STP unit are manufactured
in the country. 2.10 The provisions of paragraphs 96, 104, 109, 110
and 112 to 117 of Chapter IX of the Export and Import Policy (1992-97)
applicable to export oriented units (EOUs) and units in Export Processing Zones
(EPZs) shall also apply to the STP units subject to the following modifications
: (a) The word "STP" shall be substituted
for the word "EOU/EPZ" "EOU" or "EPZs", wherever
they occur, in the paragraphs. (b) The words "Development Commissioner"
wherever they occur shall be substituted by the words "Chief Executive of
the STP Society*. (c) The word "BOA" wherever it occurs,
shall be substituted by the word "IMSC". 2.11 The export obligation of an STP unit in net
foreign exchange terms shall be as follows : Export obligation = 1.5 X (CIF value of the
hardware imported) + 1.5 X (wage bill). NOTES: (i) The obligation
on the hardware part will be fulfilled over a period of four years. (ii) The obligation on wage bill will be on annual
basis. (iii) Net foreign exchange for this purpose will be
foreign exchange inflows as a result of software exports less foreign exchange
outflows on account of all expenditure whatsoever other than hardware. (iv) If any capital goods imported duty free are
leased from a domestic leasing company, the CIF value of the capital goods
shall be included in the value of the hardware imported. 2.12 Use of computer system in STP for training
purpose will also be allowed subject to the condition that no computer terminal
will be installed outside the STP for this purpose. 3.0 The provisions of the STP Scheme contained in
this notification shall not be applicable to the software units established in
accordance with the EHTP Scheme, to an EOU or software units established in an
EPZ. This notification is issued in public interest. SOFTWARE TECHNOLOGY PARKS SCHEME