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Tax benefit MeitY

STPI — Software Technology Parks

Duty-free imports + tax holidays for software exporters

Maximum benefit
Duty-free imports + export benefits
Typical processing
30–60 days from LoI submission to Letter of Permission (LoP)
Apply on official portal

About this scheme

Software Technology Parks of India (STPI) is an autonomous society under MeitY that operates a network of software technology parks providing single-window clearance and a host of benefits for IT/ITeS/electronics export-oriented units. STPI registration enables duty-free import of hardware/software, service tax exemption on exports, simplified customs procedures, and 100% FDI under automatic route. The scheme has been instrumental in India's software export boom.

What you get

  • Duty-free import of hardware, software, and capital goods for export production
  • Income-tax exemption on export profits (subject to current IT Act provisions and conditions)
  • GST/Service tax exemption on exports (zero-rated)
  • Excise duty exemption on indigenous procurement for export production
  • 100% FDI under automatic route — no separate approval needed
  • Simplified customs procedures — green channel clearance
  • STPI bonded warehouse facility
  • No CAPEX cap — invest as much as required for the project

Who qualifies

Indian-incorporated entity (Private Limited, Public Limited, LLP, OPC) engaged primarily in: (a) software/IT services export, (b) ITeS/BPO services for offshore clients, (c) electronic hardware export, (d) R&D in IT/electronics with export focus. The unit must commit to net foreign exchange earner positive over 5 years (block-of-5 approach). New units get easier approval; expansion of existing units also possible.

Industries (NIC divisions)
PublishingFilm / videoBroadcastingTelecomIT / softwareInformation services
Business types
Private LimitedLLPsOne Person CompaniesPublic Limited

Available across India (central scheme).

How to apply

  1. 1Apply at any STPI regional office (offices in 60+ cities) or online at stpi.in
  2. 2Submit Letter of Intent (LoI) application with project profile, export projections (5-year), promoter KYC, and incorporation documents
  3. 3STPI evaluates the proposal — focus on export viability and technical capability
  4. 4On approval, Letter of Permission (LoP) issued for unit setup
  5. 5Set up the unit, complete bonded warehouse formalities
  6. 6Start operations — annual export performance reporting to STPI
  7. 7Maintain Net Foreign Exchange (NFE) positive — verified every 5-year block

Key terms and conditions

  • NFE positive condition — exports > imports over the 5-year block
  • Annual performance reporting to STPI is mandatory
  • Customs bond on imported capital goods for 5 years (re-export or duty payment if unit exits)
  • Direct tax exemption depends on current IT Act provisions and Sunset Clauses
  • Service to domestic market allowed but subject to taxes (no export benefits on domestic portion)

What disqualifies you

  • Pure domestic-focused IT services not eligible — must commit to substantial exports
  • Non-IT/electronics activities excluded
  • Foreign-incorporated entities can only operate via Indian subsidiary
  • Default on NFE commitments triggers duty recovery on capital goods
  • Services to related parties (group companies) have specific transfer-pricing scrutiny

Documents typically required

  • Incorporation certificate
  • Project profile
  • Export turnover projections
  • Director KYC

Frequently asked questions

Q. My software firm serves only Indian clients — can I still join STPI?
Generally no. STPI is export-focused. You can register but you would not be able to claim export benefits without actual exports.
Q. What is NFE positive?
Net Foreign Exchange positive: over a 5-year block, your foreign exchange earnings (exports) must exceed your foreign exchange outflow (imports + other forex outflows). Most software exporters meet this easily.
Q. Can I have a STPI unit and SEZ unit both?
Yes, but they are separate units with their own books and compliance. Some companies operate parallel STPI and SEZ units in different cities for tax optimisation.

The content above is compiled from public information published by the scheme authority. Eligibility, benefits, and procedures are subject to change. Confirm details directly with the official portal before applying. BharatSeal does not process scheme applications.

STPI — Software Technology Parks — Government scheme on BharatSeal | BharatSeal