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EHTP Scheme

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STP Scheme

Government of India has declared software as one of the extreme focus area for growth of exports.
Therefore, Govt of India announced a special scheme to promote software exports called "The Software Technology Park (STP) Scheme" .

STP scheme is implemented through Software Technology Parks of India(STPI) which is an autonomous Society of Ministry of Information Technology, Govt of India. Shimla is one of the Centres of STPI.

Salient features of the STP Scheme

  • Approvals are given under single window clearance mechanism.
  • Projects costing upto Rs. 100 millions with Indian investment & NRI funds on non-repatriable basis are cleared by local STP    authorities at Centre level itself.
  • 100% foreign equity is permitted.
  • All the imports in the STP units are completely duty free.
  • Import of Goods on loan , free of cost & lease basis is permitted
  • Re-export of capital goods brought on loan/lease/free of cost is permitted.
  • Central Sales Tax can be reimbursed
  • Domestic purchases are completely excise duty free.
  • Domestic purchases are eligible for the benefit of deemed exports to the suppliers.
  • The sales in the Domestic Tariff Area (DTA) are permissible upto 50% of the export in value terms.
  • STP units are exempted from corporate income tax till the year 2010 .
  • Net Foreign Exchange Earning as a percentage of exports (NFEP) and minimum export performance (EP) would be as follows.

NFEP = (A - B)* 100/A

NFEP shall be calculated annually and cumulatively for a period of five years from the commencement of commercial production according to the following formula:


Where NFEP is Net Foreign Exchange Earning as a Percentage of Export

A is the FOB value of exports by the STP unit;
B is the sum total of the CIF value of all imported inputs;

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".

NOTE :-

i) If any input is obtained from another EOU/EPZ/EHTP/STP unit, the value of such input shall be included under B.
ii) If any capital goods imported duty free is leased from a leasing company, received free of cost and/or on loan basis, the CIF value of the capital goods shall be included,pro-data, under B for the period it remains under bond.
iii) For annual calculation of net foreign exchange as a percentage of exports, 1/5th value of the imported capital goods shall be included under B above.
iv) in the case of projects where the investment in land, building, plant & machinery exceeds Rs.200 crores, the value of the capital goods shall be amortised over a period of seven years. i.e. in such cases, only 5/7th of the CIF value of the imported capital goods shall be included under B.
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