NON STPI License
In today’s world, technology and software are integral parts of every industry. In India, the Software Technology Parks of India (STPI) have been established to promote technology and software exports. As an export-oriented scheme, entities engaged in software exports are required to register either as an STP or Non-STPI unit to avail certain benefits. In this article, we will explore the Non STPI registration process, eligibility criteria, benefits, and the difference between STP and Non-STPI registration in India. So, let’s delve into the world of Non STPI License in India and understand how it can help companies to grow.
A. Definition of Non-STPI Registration
NonPI registration is an essential requirement for entities engaged in the export of software or IT-enabled services. The term Non STPI stands for Non-Software Technology Parks of India. It is a registration process that allows businesses to claim benefits for their software exports and further helps them to avail Government incentives relating to software exports. Any form of entity can obtain Non STPI registration, provided it has some form of software that can be exported outside India. In contrast, STPI registration is mandatory for all software companies situated in India and has a 100% export-oriented scheme. Non-STP entities can also obtain the registration as Non-STPI units to avail Softex certification. The certificate of registration is valid for three years, and units will require to submit quarterly and annual returns before renewing it. Non-STP units must pay a service charge that varies depending on the value of contracts registered, and the amount collected by STPI is slab-wise. Overall, Non STPI registration is an essential requirement for entities looking to export software and claim benefits for their endeavors.
B. Purpose of Non STPI Registration
The main purpose of Non STPI Registration is to avail the various benefits and incentives provided by the Indian government to promote technology and software exports from India. Non STPI registration is required for any unit claiming such benefits. The procedure for Non STPI registration involves liaising with the regulatory authorities and differentiating between STPI and Non STPI registration.
Entities eligible for Non STPI Registration include any company or partnership firm that is into the development of export-oriented computer software/IT enabled services. Non STPI registration is also mandatory for companies that do IT/ITES exports through data communication links, as per the RBI Master Circular on Softex Certification. Therefore, availing Non STPI registration is crucial for companies looking to export software products and services.
The benefits of Non STPI Registration include tax benefits, duty-free imports of hardware and software, and cheaper prices for bandwidth, among others. Non STPI units can also claim several government incentives and benefits, such as reimbursement for export promotion, exemption for land and building purchase, and investment in research and development. The importance of Non STPI registration for software exports cannot be overstated, as it enables businesses to take advantage of government incentives and boost their competitiveness in the global market.
II. Eligibility for Non-STPI Registration
A. Types of Entities Eligible
Any entity that has software to export outside of India can obtain Non STPI registration. This includes both Indian companies and subsidiaries of foreign companies. Even branch offices of foreign companies can apply for registration as Non STPI units. The process for obtaining registration as a Non STPI unit is fairly simple. The entity needs to liaise with regulatory authorities to complete the registration process. No matter what form of entity you belong to, you are eligible as long as you have software to export outside of India. On the other hand, STPI registration is applicable only to Indian companies, subsidiaries of foreign companies, and branch offices of foreign companies. It is important to note that the registration process for STPI and Non STPI units is different. Non STPI registration allows entities to claim certain benefits related to software exports, while STPI registration allows units to enjoy benefits such as no import or customs duty and 100% FDI through the automatic route, apart from obtaining income tax and other governmental scheme benefits.
B. Requirement for Software Export
To avail Softex certification, any business entity that is into the development of export-oriented computer software or IT enabled services is required to register itself as a Non-STPI unit under STPI. It is mandatory to obtain Softex certification, as per the RBI Master Circular, for any company that does IT/ITES exports through data communication links. Non-filing of Softex funds received from Out India is treated as general income rather than as export income. In addition to this, the banker may issue a letter for holding your account, which could lead to a violation of FEMA regulations. To comply with Softex certification requirements, the business entity must be registered as a Non-STPI unit.
The idea of requirement for software export so as to avail Softex certification is to ensure that proper measures are taken by companies to verify that the export of software has actually and genuinely taken place. By having an exclusive/specific/nodal authority for monitoring/grant certification, it ensures that software exporters are playing by the rules and contributes towards a safer global trade environment.
III. Benefits of Non STPI Registration
A. Government Incentives and Benefits
NonPI registration offers several incentives and benefits for software exports. The Government offers several schemes and incentives for software exports that aim to boost the economy and promote the software industry. By obtaining Non STPI registration, software exporters can avail these benefits, such as duty-free import of goods required for export-oriented production, exemption from service tax, and excise duty benefits. Non STPI registration also makes an entity eligible for 100% FDI through the automatic route.
Additionally, the registration enables entities to claim benefits from various government schemes, including the Engineering Export Promotion Council (EEPC) and the National Association of Software and Service Companies (NASSCOM). Non STPI registration is available for all entities that export software from India, making it an attractive incentive for businesses of all sizes.
Non STPI units can also avail the benefit of Softex certification, a requirement for all non-STP units engaged in the export of software. The certificate is issued by STPI after verifying the exports made by Non-STP entities. Overall, Non STPI registration offers a plethora of benefits for entities engaged in software exports, making it a crucial tool for their growth and success.
B. Claiming of Benefits for Software Exports
Once non STPI unit obtains registration, it becomes eligible to claim government incentives and benefits. These benefits include income tax exemptions and duty-free imports of capital goods. Moreover, non STPI units are eligible for claiming foreign tax credit in respect of taxes paid abroad. To claim benefits for software exports, a Non-STPI unit needs to fulfill certain requirements. The unit must file data exports in softex forms with the STPI authorities. Softex forms are mandatory for the export of software and support services. Additionally, the income derived from the export of computer software through non STPI units is exempted from Income Tax under Section 10A of the Income Tax Act. Also, non STPI units are exempted from payment of Central Excise Duty on imported and indigenously procured goods. These benefits make it crucial for software exporters to obtain Non STPI registration, which comes with a validity period of 5 years. Non STPI units can renew their registration by making a fresh application at least three months before the expiry of the validity period.
IV. Non-STPI Registration Process
A. Steps Involved in Non-STPI Registration
Non STPI Registration is a necessary step for entities that wish to claim benefits for software exports from India. The procedure for Non STPI Registration involves liaising with the regulatory authorities for the registration process. The steps involved in Non STPI Registration are straightforward and can be completed efficiently. Applicants must submit the necessary documents and comply with the requirements laid out by the authorities. Non STPI Registration allows exporters to enjoy certain benefits, including tax incentives, and the ability to claim downside protection from currency fluctuations. Moreover, it provides holders with access to Softex certificates, endorsing the export of software from India. Importantly, any business entity that develops export-oriented computer software or IT-enable services is required to register itself as a NON-STP unit under STPI to avail Softex certification. Overall, going through the steps outlined in Non STPI Registration offers software exporters a pathway to enjoy the benefits provided by the government.
B. Service Charge Payment by Non STPI Units
Non STPI registration is an essential step for entities looking to export software and technology products. Once registered, Non STPI units can claim various incentives and benefits offered by the Indian government. However, it’s important for Non STPI units to be aware of the service charge payments required after registration. These charges are not included in the government benefits and must be paid by the Non STPI unit. The amount of the service charge payment is a percentage of the total software exports and varies based on the level of exports. Therefore, Non STPI units need to carefully consider these charges and factor them into their overall financial plan. It’s also important to note that failure to pay the service charges can result in penalties from the regulatory authorities. So, it’s imperative for Non STPI units to make timely payments to avoid any legal issues. By understanding these service charge payments, Non STPI units can better plan their finances and maximize their overall benefits from Non STPI registration.
V. Difference between STPI Registration and Non-STPI Registration
A. Explanation of STPI Registration
STPI registration refers to Software Technology Parks in India, which is a scheme under the Ministry of Electronics and Information Technology. It is designed to develop and export computer software and provide value-added services to IT-related industries. The registration offers several benefits, including exemption from import duty and customs duty, income tax benefits, and securing 100% FDI via the automatic route. Any Indian company, foreign company subsidiary, or branch office can become an STP unit, while any entity with some form of software that can be exported outside India can obtain Non-STPI registration. The registration process involves registering as a new unit, selecting the appropriate unit type and filling out the requisite details followed by approval from the competent authority. Validity of Non-STPI registration is for three years with a mandatory submission of quarterly and annual returns. Non-STPI units will have to pay a service charge which is slab-wise based on the contract values registered by them. The certificate of registration is required to avail benefits of software exports and government incentives.
B. Comparison between STPI Registration and Non-STPI Registration
When comes to choosing between STPI and Non STPI registrations, there are a few key differences to keep in mind. Non STPI registration is mandatory for any company engaged in the export of software in India, while STPI registration is optional. Here are some of the main differences:
1. Eligibility: Any form of entity can obtain Non-STPI registration, while only Indian companies, subsidiaries of foreign companies, or branch offices of foreign companies can become STP units.
2. Government benefits: Both STPI and Non-STPI registrations offer benefits from the Indian government in terms of tax exemptions, but Non-STPI registration also enables claiming of benefits for software exports.
3. Import duty: While STP units enjoy completely duty-free imports of hardware and software, Non-STPI units do not have this same benefit.
4. Service charges: Non-STPI units are required to pay a service charge based on the value of contracts registered, while STP units do not have this same obligation.
Overall, the decision between STPI and Non-STPI registration will depend on your specific business needs and goals. Make sure to consult with a professional to understand which option is best for you.
VI. Validity of Non-STPI Registration
A. Validity Period
The STPI license in India is beneficial for entities engaged in software exports as it provides certain benefits and government incentives. However, it is crucial to note that the certificate of registration issued under Non STPI registration is valid for a period of three years. After the validity period, the unit is required to renew its registration. This is an important aspect to keep in mind to continue availing the benefits of Non STPI registration, which include claiming benefits for software exports and availing government incentives. In addition, Non STPI units are also required to pay a service charge to STPI, which is determined by the value of contracts registered by the unit. It is important to keep track of the validity period to ensure timely renewal and continuation of benefits. With the right adherence to guidelines and procedures, Non STPI registration can be an excellent opportunity for entities engaged in software exports to claim benefits and incentives
B. Renewal of Non-STPI Registration
Renewal of Non STPI Registration is a crucial process for any business entity registered under the Software Technology Parks of India. It is important to keep the registration valid to continue availing incentives and benefits provided by the Government. The registration is valid for a period of 5 years, after which it needs to be renewed. Here are some important points to keep in mind while renewing the Non STPI Registration:
1. The renewal application needs to be submitted at least 2 months prior to the expiry date of the current registration.
2. The application should be submitted along with the required documents and fees.
3. A self-certified copy of the latest Softex form needs to be submitted along with the application.
4. Any change in the details of the business entity should be updated before submitting the renewal application.
5. In case of delay in renewing the registration, a late fee will be charged as per the STPI norms.
Renewal of Non STPI Registration is a simple and straightforward process as long as all the required documents and fees are submitted on time. It is important for businesses to keep their registration valid to continue availing the benefits provided by the Government.
VIII. Final Key-note
A. Recap of Non STPI License Information
To, Non STPI registration is required for units that export software products and wish to claim certain benefits from the government. Any entity can obtain Non STPI registration, as long as it has software that can be exported outside of India. The registration process involves liaising with regulatory authorities and filling out an application form. The certificate of registration is valid for three years and must be renewed afterward. Non-STPI units must submit quarterly and annual returns and pay a service charge to STPI based on the value of contracts registered. Comparing STPI registration and Non STPI registration, STPI units are 100% export-oriented and must obtain STPI registration, while Non-STPI units only need to obtain registration to claim benefits for software exports. By obtaining Non STPI registration, entities can avail government incentives and benefits relating to software exports, without having to pay import duty or customs duty. Overall, Non STPI registration is essential for software exporters in India to maximize their benefits.
B. Importance of Non-STPI Registration for Software Exports.
Non-STPI registration is crucial for entities engaged in the export of software products and technologies. It is mandatory for any business entity that wishes to claim government incentives and benefits. The registration process involves liaising with regulatory authorities and fulfilling certain requirements such as software export. The benefits of Non-STPI registration include exemptions from corporate income tax, duty-free imports of hardware and software, and the ability to take on domestic projects subject to meeting minimum export performance norms.
Furthermore, Non-STPI registration enables entities to avail Softex certification that is mandatory as per RBI Master Circular for any company that does IT/ITES exports through data communication links. Non-STPI registration also allows businesses to claim reimbursement of certain expenses incurred in delivering software export services.
In conclusion, the importance of Non-STPI registration for software exports cannot be overstated. It is the key to accessing numerous government incentives and benefits and also ensures compliance with mandatory regulations.
IX. Documents Required for NON-STPI License in India
1. PAN Card of the Company
2. Memorandum of Association (MOA) and Articles of Association (AOA)
3. Certificate of Incorporation
4. Board Resolution authorizing Director/Authorized Signatory to sign application form and other related documents
5. Bank Account Statement of the Company
6. Lease Deed/Rent Agreement of the office premises
7. PAN Card, Aadhaar Card, Passport/Driving License of the Director/Authorized Signatory
X. Advantages of NON STPI License in India:
1. Lower initial investment cost
2. No requirement of minimum export obligation
3. Easily accessible by small and medium-sized companies
4. No limitation with respect to the location of the company
5. Greater flexibility in decision making and operations
6. No requirement to adhere to a set of guidelines and compliance measures
7. Expedited approval process
XI. Disadvantages of NON-STPI License in India
1. Absence of tax benefits offered by STPI-approved status
2. No access to certain government incentives and schemes
3. Limited scope for expansion and growth due to lack of access to certain resources and facilities
4. Increased competition in the non-STPI segment of the market
5. No waiver on import duty for capital goods and raw materials
6. No access to the duty-free import of software and hardware.
7. No exemption from service tax or sales tax for services performed by the company.
XII. Process of getting NON-STPI License in India
1. Register your business and obtain a Certificate of Incorporation.
2. Apply for a PAN Card for the company and a PAN Card for the directors.
3. Choose the appropriate jurisdictional office for the filing of the application.
4. Obtain a Digital Signature Certificate.
5. Get the necessary certificates from the Registrar of Companies.
6. Draft a Memorandum of Association (MOA) and Articles of Association (AOA).
7. Apply for a Lease Deed/Rent Agreement for office premises.
8. Fill the application form for the NON-STPI license and submit it along with the necessary documents.
9. Pay the required application fees.
10. Await the approval from the concerned authorities.
XIII. Types of NON STPI License in India
1. Export Oriented Unit (EOU) License
2. Software Technology Parks of India (STPI) Registration
3. Special Economic Zone (SEZ) License
4. Advance Authorization License
XIV. Frequently Asked Questions about NON-STPI License in India
1. Is there a minimum export obligation for NON STPI License holders?
Ans: No, there isn’t any minimum export obligation for NON STPI License holders.
2. Are tax benefits available for NON STPI License holders?
Ans: No, tax benefits are not available for NON STPI License holders.
3. What is the process of applying for a NON STPI License?
Ans: The process includes registering your business, obtaining a PAN Card, choosing the appropriate jurisdictional office, obtaining necessary certificates, drafting MOA and AOA, applying for lease/renting office premises, submitting the application form and required documents, paying the application fee, and awaiting the approval from authorities.
4. What are the disadvantages of obtaining a NON STPI License?
Ans: Disadvantages include absence of tax benefits, no waiver on import duty for capital goods and raw materials, limited scope for expansion and growth, and increased competition in the non-STPI segment of the market.
5. What are the advantages of obtaining a NON STPI License?
Ans: Advantages include lower initial investment costs, no minimum export obligation, greater flexibility in decision making and operations, and expedited approval process.