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Services >> Compliance Services >> STPI, NON-STPI, EOU AND SEZ

About STPI

Software Technology Parks of India is a scheme-based registration policy administered by the Ministry of Electronics and Information Technology. STPI scheme is a 100% export-oriented scheme for the development and export of software via a data communication link or via physical media that also includes the export of software professional services.

STPI benefits:

• No import duty or customs duty.
• The unit can secure 100% FDI (Foreign Direct Investment) through the automatic route.
• Income tax and other government schemes benefits.

BCL India’s Service in the STPI portfolio includes the:

• STPI Registration
  Preparing necessary application along with supporting documents to obtain STPI.
• SOFTEX Filing
  SOFTEX code must be generated from RBI after the export invoice is issued. This code is required for preparing the SOFTEX form. Then, the SOFTEX form is prepared it is submitted to the STPI department along with necessary supporting documents.
• APR/QPR Filing
  QPR (Quarterly Progress Report) is submitted every quarter and APR (Annual Progress Report) is submitted annually. APR is submitted twice, unaudited and audited by Export Oriented Units. The details need to be submitted online and then the online submitted copy needs to be printed and submitted to the STPI department.

About NON-STPI

Non-STPI registration is required for all entities that want to export some form of software outside India even if they don’t fall under The Software Technology Parks (i.e., STP) scheme which is a 100% export-oriented scheme for the development as well as export of computer software. The registration enables the SOFTEX declaration form which has to be filed by companies and other entities for software export. The initiative was introduced by the Reserve Bank of India (RBI) for any software transactions lesser than USD 25,000. Hence all entities have to first register as a Non-STPI unit.

Non-STPI benefits:

• Enables claiming of benefits of software exports.
• Availing benefits of Government incentives relating to software exports.
• Ensures adequate compliance with the law.

Compliance Regulations:

• Entities have to submit quarterly and annual reports as per the required formats
• Whenever a unit is registered as a Non-STPI then compliance has to be met as per the requirements of the RBI. This would also be considered when the SOFTEX Form has to be submitted.
• Service Charges have to be paid to comply with the requirement of the STP.
• 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.

About EOU

The Export Oriented Units (EOU) scheme was introduced as a complementary to the scheme of Free Trade Zone and Export Processing Zone. Units that are undertaking to export their entire production of goods are allowed to set up as an EOU.

EOU benefits:

• Permission to procure raw material or capital goods duty-free, either through import or through domestic sources.
• Eligibility for reimbursement of GST.
• Eligibility for reimbursement of duty paid on fuels procured from domestic oil companies.
• Eligibility for claiming input tax credit on the goods and services and refund thereof.
• Fast track clearance facilities.
• Exemption from industrial licensing for the manufacture of items reserved for the SSI sector.

There are several criteria such as minimum investment, location, special license, GST, and bonding period which are to be taken care of to obtain EOU status and stay compliant with its regulations.

BCL India can help you with:

• Obtaining EOU status:
  Application for setting up of unit under EOU scheme must be made to the Board of Approval. In successful cases, the applicant is provided with a Letter of Permission for setting up an EOU with an initial validity of 2 years for the construction of the plant and installation of the machinery. Further, a person can obtain an extension for a period of up to one year. On starting operation, within a period of 5 years, the EOU will have to achieve positive net foreign exchange earnings cumulatively.
• Approval for non-service sectors:
  Applications for setting up of units other than the service sector (except for R&D, software and IT-enabled services, or any other service activity delegated by BoA), shall be approved or rejected by the Units Approval Committee within 15 days as per criteria.
• Exit from EOU Scheme:
  With the approval of DC, an EOU may opt out of the scheme. These exits shall be subject to a penalty of Excise and Customs duties and industrial policy in force. In case the unit has not achieved obligations, it shall be taxable to a penalty at the time of exit.(Quarterly Progress Report) is submitted every quarter and APR (Annual Progress Report) is submitted annually. APR is submitted twice, unaudited and audited by Export Oriented Units. The details need to be submitted online and then the online submitted copy needs to be printed and submitted to the STPI department.

About SEZ

SEZs (Special Economic Zones) are duty-free spaces where SEZ units operate the business in a more liberal capacity. Entities within SEZs are offered assistance through foreign contributions without much government interference concerning economic laws, tax laws, commercial laws, and corporate laws, including limited or no tariff implications from the Central or State Government.

SEZs in India can be formed for manufacturing goods or rendering services, establishing a Free Trade Zone, serving as a warehousing sector, for export of Goods or Services, serving goods or services to other SEZs and offshore banking.

SEZ Benefits:

• Tax Exemptions (Income Tax, GST etc.)
• Land Acquisition Approvals and State Permission
• Exemption from State or Central Tariff Authority (Export duties, Custom Charges, etc.)
• Foreign Direct Investment (FDI) Approvals
• License Approvals
• Easy approvals for Banking, Insurance and Commercial borrowings
• Budget Benefits, Subsidies, and Special Finance Schemes
• Duty Drawbacks and Developer Schemes

Enterprises that opt to form an SEZ in India have to undergo multiple Central and State Approvals by sufficing statements, declarations, and a list of documents for which BCL India provides a comprehensive service package that includes:

• Registration, closure, merger, de-merger and other arrangements of SEZ/SEZ Units
• Ministerial, Central and State Approvals
• FDI/RBI/FEMA compliance
• Drafting and filing of documents, declarations, trade agreements, project reports, etc
• Tax return filing and allied compliance
• Corporate compliance and much more
• Land, plant or project approvals, etc.
• Export/Import legislation
• Licensing and legal registrations
• Arbitration / Litigation services

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