Software Technology Parks of India a step in right direction

Transcription

1 Software Technology Parks of India a step in right direction Ministry of Information Technology, (Ministry of Information Technology) Govt. of India has recognized the potential for software exports and created the Software Technology Park Scheme (STP). As a Part of this scheme, MIT has taken the right step at the right time in establishing the Software Technology Parks of India (STPI), an autonomous society. STPI centers have been created at strategic locations across the country. New fiscal incentives offered under this scheme, Infrastructure created by STPI and the Investor friendly environment have contributed to a steep growth in the Software Exports Goal To contribute to the prosperity of the national economy through promotion of exports from the Software & Services Industry by facilitating all the statutory services of the Govt., strengthening the Communication Infrastructure and by increasing the quality consciousness in the Industry. Objectives To act as front-end to the Software Industry for the Govt. policies and approvals To establish and provide Data communication facilities, Computer Facilities and Infrastructure facilities like Office Space and General Amenities. To promote development and export of software & the services through technology assessments, market analysis, marketing segmentation, marketing support & related areas. To train professionals and to encourage design and development in the field of Software Technology and Software Engineering

2 STP Scheme its benefits Approvals are given under single window clearance mechanism. An STP project may be set up any where in India Jurisdictional STPI authorities clear projects costing less than Rs. 100 million with Indian Investment. 100% Foreign equity is permitted All the imports of Hardware & Software in the STP units are completely duty free, import of Second hand capital goods also permitted. RE-Export of capital goods are permitted. Simplified Minimum Export Performance norms i.e., Positive Net Foreign Exchange Earnings Use of computer system for commercial training purpose is permissible subject to the condition that no computer terminals are installed outside the STP premises. 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 till Assessment 2010 The capital goods purchased from the Domestic Tariff Area (DTA) are entitled for benefits like Excise Duty & Reimbursement of Central Sales Tax (CST). Capital invested by Foreign Entrepreneurs Know - How Fees, Royalty, Dividend etc., can freely repatriate after payment of Income Taxes due on them if any. The items like computers and computers peripherals can be donated to recognized non - commercial educational institutions, registered charitable hospitals, public libraries, public funded research and development establishments, organizations of Govt. of India, or Govt. of a State or Union Territory without payment of any duties after two years of their import. 100% Depreciation on Capital Goods over a period of five years.

3 CHECKLIST FOR APPLICATION PROCESSING: Software Technology Parks of India - Bangalore 1. The application should be in the prescribed format. Form should have been typed neatly. Hand written will not be accepted. Each application should be duly signed by the competent authority on each page of the application along with office seal of the company. 2. Memorandum and Article of Association 3. Board Resolution for setting up the STP Unit and persons authorized to sign. 4. Resume of Person Heading the operation / CEO. 5. List of Permanent Directors with Photographs. 6. IEC copy 7. PAN copy 8. Detailed project report / Business plan consist of Company profile Promoters background Units Area of Expertise / Services offered Marketing Strategy / Marketing Arrangements Manpower Plan Future Plans Others 6. Financials Statement like : Cost of project & Means of finance Projected P&L A/c. Projected Balance Sheet Projected Cash flow / fund flow statement. Export working (As per Transfer pricing guidelines in the case of subsidiaries) 7. Other documents like Copy of FIRCs and letter filed with RBI for receipt of foreign equity (if any). Copy of Master/ Service agreement signe d with parent company / clients Copy of Lease / Rental Agreement List of Directors / Promoters / share holders 8. Receipt for payment of Application processing fee (Rs. 2,500/) Please Refer pt.8 below. 9. Initial Application processing fee of INR 2,500 and advan ce service charges of INR 24,000 at the time of executing the legal agreement. Service charges to be paid annually as per the slabs given in the statutory compliances column.

4 TIME FRAME FOR PROCESSING AND GRANTING APPROVALS: STAGE I: At the first stage, the draft application submitted by the unit will be screened by the STPI authorities. Once, the authorities cleared the draft application, the unit has to submit 2 sets of the fair applications along with the necessary documents. STAGE II: After Stage I, the CEO / Head of the operation of the company should make a presentation to the New Application Processing Committee and The Director of STPI. STAGE III: After completing the Stage II process and subject to the Director & New application processing committee recommendation the unit will be issued with Letter of permission (LOP) / Letter of intent under STP scheme. The STPI license will contain the following parameters. 1. Operation Status of the Unit 2. Item of manufacture (Like Development of software / IT Enabled Services). 3. The capacity of the import of capital goods for the project. 4. Export Obligation Commitment 5. Terms and Conditions a. DTA Sales b. Separate Account should be maintained for STPI c. The unit should have the Private Bonded Warehouse License.

5 Competent Authority for approval Director of Software Technology Parks of India or Inter Ministerial Standing Committee (IMSC) Time frame for processing and granting approvals In case the applications are complete in all respect, the time frame for granting approval is generally as below: Director(s) STPI days The above time frame may vary due to unavoidable circumstances. Application must accompany a Demand Draft of Rs. 2500/- drawn in favour of The Director, STPI as processing fees.

6 APPLICATION FOR SETTING-UP UNIT UNDER SOFTWARE TECHNOLOGY PARK (STP) SCHEME FOR 100% EXPORT OF COMPUTER SOFTWARE (Combined Form for Letter of Permission and Foreign Collaboration/Investment)

7 APPLICATION FORM I. Location of the STP unit (Please indicate the jurisdiction of STPI) II. Name of the Applicant Undertaking III. Address in full of the Registered Office of Applicant Undertaking (With Pin Code, Telephone, Fax, Permanent e -mail & web site) IV. Address in full of the pro posed location of the STP unit (With Pin Code, Telephone Fax, Permanent e -mail & web site) V. Whether the applicant has STP unit at other location (Please tick ( ) the appropriate box) Yes No If yes, indicate name of the Location(s): SL. No. Location Name & Address Jurisdictional STPI Approval No. & Date

8 VI. Whether the promoter(s) have promoted any other undertaking(s) which is/are registered under STP Scheme. (Please tick ( ) the appropriate box) Yes No If yes, provide following details: Sl. No. Name of Promoter Name of STP unit promoted Location VII. Status of the Applicant Undertaking (Please tick ( ) the appropriate box) Government Undertaking Limited Company Private Limited Company VIII. Brief Background of the Applicant(s) (Give details of professional background, existing lines of business etc.,)

9 IX. Type of Proposal A. Indicate whether this proposal is for (Please tick ( ) the appropriate box) Establishment of a STP Unit Expansion of existing STP unit Conversion from other scheme to STP unit Conversion from DTA to STP unit B. If the investment is proposed to be undertaken for new undertaking, indicate names Board of Directors / Investor with full details of their addresses & occupation X. Capital Structure for proposed company (Rs. Lakhs) (A) Pattern of Equity Share Holding Investor Central Government State Government Promoters Private Public Percentage (B) Equity Authorized Capital Subscribed Capital Paid -up Capital Existing Proposed

10 (C ) Pattern of Share Holding in the Paid up Capital (Rs in Lakhs) (a) (b) Foreign Holding (i) Direct Participation (ii) Indirect Participation (iii) Total (I+II) Non Resident India Company/Individual Holding (i) Repatriable (ii) Non-Repatriable (c ) Resident Holding (d) (e) (f) (g) Total Equity (a+b+c) Commercial Borrowings External Internal Any other Source Total Investment Existing Proposed Amount % Age Amount % Age XI. Project Export Over 5 s s 1 st 2 nd 3 rd 4 th 5 th Total In Rs. ( Lakhs) In US$ (Millions) (Conversion rate taken 1 US$ = Rs. ) XII. Requirement of Capital Goods (in Lakhs) Particulars 1 st 2 nd 3 rd 4 th 5 th Total (A) CIF Value of Import Capital Goods Import of CG on Direct Purchase, loan, lease or free of cost basis (B) Total Value of Capital Goods to be purchased indigenously

11 XIII. Is any Foreign Collaboration (Whether Financial, Technical Marketing or Consultancy) Envisaged? If so, give followings details Part A [For Financial Collaboration] Foreign Investment (a) Financial Collaborator / Investing company details Name. Address. Country.. (b) Amount of Foreign Equity Investment Amount in Rupees Percentage in Paid-up-Capital Part B [for Foreign Technology Agreement] (a) Technical Collaborator Name Address Country Nature of the Technical Collaboration Terms and conditions of the Collaboration

12 Part C [Additional Information for Foreign Collaboration] (i) Whether your foreign investors have had or has any Financial/Technical Collaboration or trade mark agreement in India in the same or allied field for which approval has been sought? And (Please tick ( ) the appropriate box) Yes No (ii) If so details there and the justification for proposing the new ve nture/technical Collaboration (including the marks) XIV. Net Foreign Exchange Earnings as Percentage of Exports (NFEP) Foreign Exchange Inflow Value in Rs. Lakhs 1 st 2 nd 3 rd 4 th 5 th Total Total 5 years in US $ In million (i) Fore ign Equity (ii) Borrowings from parent/ collaborator Company (iii) Commercial Borrowings (External) (iv) Any other funds (Give Details) (v) Export Earnings (A) Total Foreign Exchange Inflow

13 Foreign Exchange Outgo on (i) CIF Value of Import CG {Please repeat figure given at (Sl.No.3) of CG amortization Table} (ii) Import of Raw Material & Components (iii) Import of Spares & Consumables (iv) Repatriation of dividends and profits to Foreign Collaborators (v) Royalty (vi) Lump sum know-how fee (vii) Design & Drawing fee (viii) Payment on training of Indian Technicians abroad (ix) Payment to Foreign Technicians (x) Commission on exports (xi) Foreign Travel (xii) Amount of interest to be paid on External Commercial Borrowings/deferred payment credit (specify details) xiii) Any other payments (specify details Total FE Out flow (i.) to (xiii) (B) Net Foreign Exchange Earnings (A-B) Net Foreign Exchange Earnings % = (A B) x100 > 0 A Value In Rs. Lakhs 1 st 2 nd 3 rd 4 th 5 th Total Total 5 years in US $

14 XV. Export Performance Minimum Export Performance as a percentage of Net Foreign Exchange Percentage of Exports The minimum Performance (EP) as per Appendix I of EXIM Policy as amended on 01/04/2003 is as follows:- Name of the Sector Computer Software & I T Enabled Services Minimum NFEP Positive Net Foreign Exchange EOU/EHTP/STP unit shall be a positive net foreign exchange earner. Net Foreign Exchange Earnings (NFE) shall be calculated cumulatively for a period of five years from the commencement of production according to the formula given below. Items of manufacture for export specified in the letter of permission (LOP)/ Letter of Intent (LOI) alone shall be taken into account for calculation of NFE. Positive NFE = A B > 0 Where NFE is Net Foreign Exchange Earning A) is the FOB value of exports by the EOU/EHTP/STP unit; and B) is the sum total of the CIF value of all imported inputs and the CIF value of all imported capital goods, and the value of all payments made in foreign exchange by way of commission, royalty, fees, dividends, interest on external borrowings during the first five year period or any other charges. "Inputs" mean raw materials, intermediates, components, consumables, parts and packing materials. If any goods are obtained from another EOU/EHTP/STP/SEZ unit, or procured from an international exhibition held in India, or bonded warehouses or precious metals procured from nominated agencies the value of such goods shall be included under B. If any capital goods imported duty free or leased from a leasing company, received free of cost and/or on loan basis or transfer, the CIF value of the capital goods shall be included pro-rata, under B for the period it remains with the units. For annual calculation of NFE the value of imported capital goods and lump sum payment of foreign technical know-how fee shall be amortized as under: 1 st - 10 th : 10%

15 CG Amortization Table (Rs. In lakhs) Sl. Particulars No 1 CIF Value of Capital G oods imports (As indicated in XII of the Application) 2 CG Amortization for the purpose of Calculating NFE. ( 1 st 10 th 10% ) 1 st 2 nd 3 rd 4 th 5 th Total 3 Total amortized CG value to be taken to FE outflow table For Example:- CG Amortization Table Sample (Rs. In Lakhs) Sl. Particulars No 1 CIF Value of Capital Goods imports 2 CG Amortization for the purpose of Calculating NFE. ( 1 st 10 th 10% ) 3 Total amortized CG value to be taken to FE outflow table 1 st 2 nd 3 rd 4 th 5 th Total

16 XVI. Staff proposed to be employed in the Software Development / IT Enabled (should be in incremental) Existing Proposed 1 st 2 nd 3 rd 4 th 5 th Total M F M F M F M F M F M F M F Managerial Supervisory(Project Leader or Manager) (i) Technical (ii) Non Technical Other Categories (Specify) Total

17 XVII. Details of development / IT Enabled Service activities (A) Area of Expertise in Software Development Enterprise Application Software Application Software System Software Web Development ERP, SCM, CRM Financial and Banking Software Production management and Inventory control Others (please specify) Technology Software (IC/ASIC/Telecom) IC Design VLSI / ASIC Embedded Software Telecom Software Other (please specify) IT Enabled Se rvices Back office Operation Call Centre Data Processing Engineering and Design Insurance Claim Processing Medical Transcription Remote Maintenance Others (specify) Any other please specify

18 (B) Item Code : Indian Trade Classification as per Harmonized system XVIII Data Communication Requirement STPI provides worldwide datacom service through its own gateways. It provides International Private Leased Circuits (IPLCs) and Internet Services (IP) to the Software Exporters. Units may contact the respective centers for detailed information on service types and charges 1. Type of Service IPLC IP 2. Bandwidth 64 kbps 128 kbps 256 kbps 512 kbps 1024 kbps 2048 kbps 3. Local Loop: Microwave Fiber Copper XIX. Establishment time required for commencement of development/export from the date of issue of permission XX. Whether the applicant/party has submitted any other application(s) for Letter( s) of Intent/Permission is/ are pending. If so, the details thereof including the items of manufacture, proposed capacity, location and investment. XXI. Whether the applicant has been issued any Industrial License of Letter of Intent so far under 100% Export Oriented Unit (EOU)/Export Processing Zone (EPZ) Scheme under Normal Industrial Licensing Scheme for domestic tariff area. If so, full particulars of each Letter of Intent/ Industrial License/ Permission Letter issued to him with reference number, date of issue items of manufacture and progress of implementation of each such Letter of Intent/Industrial License/Permission Letter.

19 XXII) a) Indicate whether the applicant or the Undertaking or any of the Partner/Director of the Undertaking who is a Partner/Directo r of another Company or its associate concerns. b) If answer to part (a) is in affirmative, then give details. XXIII) (a) Indicate whether the applicant or the Undertaking or any of the Partner/Director who is also a Partner/Director of any other company or its associate concern have been debarred or placed in abeyance from getting any License/Letter. XXIV) Indicate whether the applicant or Undertaking or any of the Partner/Director who is also a Partner/Director of another company or its associate concern have been issued notice by the Government of India, or Letter of Intent/Permission Letter. XXV) If reply to part (a) and/or (b) is in affirmative, then give details.

20 UNDERTAKING I/We hereby undertake that (i) The Capital equipment (hardware/software) required for software development, imported by us would be used for production of computer software for 100% export in STP Scheme. (ii) The unit is amenable to bonding by Customs; (iii) That I/We will abide by other conditions, which may be stipulated by the Department of Electronics, Government of India. (iv) I/We hereby declare that above statements are true and correct to the best of my/our knowledge and belief. I/We fully understand that any Letter of Intent/Permission letter granted to me/us on the basis of the statement furnished is liable to cancellation or being made ineffective, in addition to any other penalty that the Government may impose or any other action that may be taken having regard to the circumstances of the case, if it is found that any of the statements or facts therein are incorrect or false. (v) I/We Undertake to fulfill the Export Obligation as per Export-Import Policy in force (Signature with full name) Designation : Place : Relationship: Full Address : Date: Seal/Stamp of the Company Note: Wherever the information desirous is to be attached in annexure

21 Statutory compliance for STP units Software Technology Parks of India - Bangalore Important statutory compliance for STP units are listed below as reference: Accounts: Each of such unit is required to maintain separate accounts for its operations. Separate annual balance sheet will have to be made for each such unit which would be become a part of the main balance sheet of the company. For maintaining separate accounts the following will have to be done: a) Maintenance of separate Cash & Bank book and corresponding vouchers b) Maintenance of sales invoices. c) Maintenance of Fixed Asset register d) Maintenance of Foreign Inward Remittance Certificate file (FIRC s) & Bank Realization Certificates file where the original of the FIRC s and BRCs are kept. e) Maintenance of contract file, where copies of contracts received from buyers are maintained. f) Preparation of yearly balance sh eet for the unit which would ultimately become a part of the balance sheet of the company. Banking: Each unit is required to maintain separate bank accounts for its operations. The units is free to have as many bank accounts as it desires but shall have to designate a single branch of bank whom all export documents will be submitted. In other words the work of handling of all shipping documents and realization of export proceeds will have to be entrusted to this designated bank branch, Mandatory Statuto ry Obligation & Records : The following are the details of other mandatory statutory obligation and records that have to be kept at the unit: a) Import Certificate: A copy of the import certificates issued by STPI permitted imports for the unit should be maintained. This should have the full debits etc., as per the actual imports. b) Export Certificate: A copy of the certified export forms attested by STPI should be maintained. c) Bill of Entry File: Copies of all the Bill of Entries for the import of materials have to be maintained in this file. This should be maintained in the same order as per the prescribed format d) Performance Reports File: Monthly & Quarterly performance reports have to be given to STPI. A copy of the return duly receipted by the authority must be maintained in the MPRs & QPRs file separately.

22 Annual Performance Return : ly performance report to be given to the Authority in the prescribed form as sought by them. Annual performance returns to STPI should be promptly given, as the authority on the basis of this return works out the actual export obligation etc., for the STP Unit. (Format of Annual Report is at Annexure XXXII) Service Charges to STPI: Each STP unit is required to pay service charges to STPI as per following: Export Turnover for the Revised Annual Service Charge Up to Rs. 25 lakhs Rs. 8,000/- Above Rs. 25 lakhs - Rs. 50 lakhs Rs.16,000/- Above Rs. 50 lakhs - Rs. 3 Crore Rs. 55,000/ - Above Rs. 3 Crore - Rs. 10 Crore Rs.1,10,000/- Above Rs. 10 Crore - Rs. 25 Crore Rs. 2,25,000/- Above Rs. 25 Crore - Rs. 50 Crore Rs. 2,50,000/- Above Rs. 50 Crore - Rs. 100 Crore Rs. 3,50,000/- Above Rs. 100 Crore - Rs. 500 Crore Rs. 5,75,000/- Above Rs. 500 Crore - Rs Crore Rs. 6,00,000/- Above Rs Crore Rs. 6,50,000/- Rs, 24,000 /- will be paid as Advance service charges at the time of executing Legal Undertaking.

23 Database - Details to be submitted along with the STP Application NAME OF THE COMPANY : Details of the following addresses: Registered Office: Other STP locations, bonded under STPI license (Bangalore Jurisdiction), along with Telephone Numbers URL Address : Area of Expertise: Details of the Head of the Organization (in Bangalore) Name & Designation: Contact Details: Tel No with Extn: Fax No: Mobile No: Direct No: Office Address of the Head of the Organization: Contact Person (for Technical/ Datacom Services) Name & Designation: Contact Details: Tel # with Extn: Fax #: Mobile No: Direct No: Office Address of Contact Person (Technical):

24 Contact Person (for Admin/ Financial Details) Name & Designation: Contact Details: Tel No with Extn: Fax No: Mobile No: Direct No: Office Address of Contact Person (Admin): Contact Person (for Export Import Details) Name & Designation: Contact Details: Tel No with Extn: Fax No: Mobile No: Direct No: Office Address of Contact Person (EIG) The above information provided is for updation of our database and will be used for important correspondences from STPI. Please Note: Any change in future with regard to the details furnished above should be informed to STPI immediately by Fax: or TEL #: , ::::::::::: FAX #: :::::::::::URL:

25 Company Database Details to be submitted along with application Sl. No Particulars Details 01 Name of the Company 02 Type of Company i.e. FE, MIC, SME 03 CEO Name / HOO 04 Tel. Nos Web Address 05 Parent Company details - Founder's Name - Brief on Activity / Area of Expertise - Revenue (globally) - Head count (globally) 06 V.C. Funding (Details of VC and amount 07 raised to be specified) Indian Operation Investment Country of Origin Services offered from Indian Entity. others 08 Remarks by STPI Send a softcopy of company database to info@blr.stpi.in and hardcopy to be attached with the application.