A.STPI

1. Introduction

Software Technology Parks of India (STPI) is a society established in 1991 by the Indian Ministry of Electronics and Information Technology with the objective of encouraging, promoting, and boosting the export of software from India. It has two units i.e., Non – STP Unit and STP Unit.

2. Advantages of STPI registration.

• 100% Customs duty exemption on imports.
• 100% excise duty exemption on indigenous procurement.

3. Registration under STPI

There are two types of registrations under STPI.

• STPI registration.
• Non STPI registration.
• When is Non-STPI registration required

4. Registration under STPI

When physical goods are exported, they pass through the Customs Office, whereas when the software is exported, it goes through media or internet (data communication links). To track the export of software, Reserve Bank of India (RBI) has mandated submission of SOFTEX forms. STPI is the administrative authority for software export valuation and certification of SOFTEX form in place of Customs.

As per RBI circular dated 13th September 2013, the exporters of the software will have to declare all the export transactions in SOFTEX, including those less than US$25,000. This means, all companies exporting software, irrespective of the value, must register as Non-STPI units and file SOFTEX forms.

STP Unit Benefits:

1. Simplified Minimum Export Performance norms i.e., “Positive Net Foreign Exchange Earnings”.
2. The sales in the Domestic Tariff Area (DTA) shall be permissible up to 50% of the export in value terms.
3. In case the immovable property is purchased or in case of rented property, the stamp duty on leave and license agreement for 100% EOU unit shall be
4. In 100% EOU, under the electricity bill, the duty component shall be
5. All the imports of Hardware & Software in the STP units are completely duty
6. The green card helps the STP unit to get preferential treatment in matters relating to the implementation of the project at both Central and State Government

1. Copy of Company Incorporation Certificate
2. Copy of Memorandum of Association/Articles of Association
3. Copy of Board Resolution authorizing the person for signing application forms
4. List of Board of Directors
5. Profile of Company and directors
6. Projected financial statements for the next five years
7. Copy of the PAN Card of the Company
8. Copy of the PAN Card of the Directors of the Company
9. Copies of Passport of the Directors for Identity proof
10. Copy of Import Export Code (“IEC”) Certificate
11. Authorised Bank Dealer Letter from bank with AD Code
12. Copy of Master Services Agreement signed with parent company / clients
13. Copy of Lease Agreement / Rental Agreement of office premises
14. Contact details and email ID of company and directors
15. Internet Service Provider (“ISP”) details

1. Compilation of documentation
2. Representation with STPI
3. Preparation of projected financial statements
4. Reporting Compliance –
   • Monthly Progress Reports (MPR)
   • Quarterly Progress Reports (QPR)
   • Annual Performance Reports (APR):
5. Maintain the accounts as under:
   • Maintenance of Sales
   • Maintenance of Fixed Asset Registers
   • Maintenance of Foreign Inward Remittance Certificate file (FIRC) & Bank Realization Certificate (BRC) file
   • Maintenance of Contract file – copies of contracts received from parties.

B. GST

About GST in India

• Goods and Service Tax (GST) is an indirect tax which has replaced excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.
• Goods and Service Tax (GST)is levied on the supply of goods and services. GST Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.

Registration

Registration is based on turnover.  Registration is mandatory if turnover (goods) exceeds INR 40 lakhs per annum or if services turnover exceeds INR 20 lakhs per annum.

Returns – monthly returns and annual returns

• Monthly returns in Form GSTR-1 declaring monthly sales/services details.
• Monthly returns in Form GSTR-3B declaring input and output tax and tax payable.

Reconciliation

• Account Books vs GST Report in Form 2A
• Form GSTR1 vs Form 26AS
• Electronic credit ledger vs General Ledger balance

Specific actions

• GST refund – LSPL has been successful in obtaining GST refund from GST department.
• QRMP scheme – LSPL helps in filing returns under quarterly return and monthly payment mode.