STPI Handbook

CONTENTS
INTRODUCTION
PROCEDURE FOR SETTING UP STP UNITS
Procedure for Application
Competent Authorities for granting the Approvals
Criteria for Automatic Approval
Procedure for obtaining approval for Sub-contracting
LEGAL FORMALITIES
Procedure for signing the legal agreement
Green cards to STP units
Bonding
Procedure for Bonding
Single all purpose Bond (B-17)
Distinct identity
Multiple locations
Registration-cum-Membership Certificate
Importer-Exporter Code Number
IMPORT BY STP UNITS
Import of Capital Goods
Procedure for obtaining Import Certificate
Approval for enhancement in value of Capital Goods
Certification for Re-Export of imported goods
APPROVAL FOR INDIGENOUS PURCHASE (CT-3)
MONITORING THE PERFORMANCE OF STP UNITS
Monthly progress Reports
Annual progress Reports
EXPORT PERFORMANCE OF STP UNITS

Process for Export Certification

Through data communication links
Physical (floppies, magnetic tapes, CDs, etc.)
On site consultancy
SALES IN DOMESTIC TARRIF AREA
DTA Sale of Software through Data Communication
Eligibility for DTA Sales
Procedure for getting approval by STP units for DTA Sales
POWERS OF APPROVAL OF THE DIRECTOR
Conversion of existing DTA units into STP units
Post Approval Matters
Additional import of Capital Goods
Attestation of list of imported CG
Change of location
Extension of validity of Letter of Permission
Disposal of obsolete capital goods
Import of office equipment
Change in name
Merger of two or more STP units
Valuation of exports declared on SOFTEX form
Inter unit transfer and temporary removal of goods
Approval for expansion of the operations
RE-IMBURSEMENT OF CENTRAL SALES TAX
Procedure for reimbursement of CST
DEBONDING
Procedure for De-Bonding of STP units
Rate of depreciation for debonding of Capital goods from the
DEEMED EXPORTS

STP units

TAX INCENTIVES FOR STP UNITS

Conditions
RELEVANT NOTIFICATIONS
Temporary taking out of computers
Customs duty exemption for Computers and Peripherals donated
units

by STP

FORMS
15-F-01:

Application for setting up units under STPI Scheme for 100% export of Computer
Software
15-F-02:

Format for Letter of Permission issued to the units

15-F-04:

Part-I- Format for Letter of Permission issued to the units

Part-II- Format for Letter of Permission issued to the units
15-F-06:

Format for obtaining approval for DTA Sales entitlement by STP units
15-F-07:

PERFORMA-I - Request for Enhancement in the value of Capital Goods

PERFORMA-II- Performance of the Company
15-F-09

FORM-A- Exporter's Declaration before services are provided

15-F-10

FORM-B- Information to be supplied by the exporter of the payment received in respect

of services rendered
15-F-11

:Application for claiming reimbursement of Central Sales Tax

15-F-12

:Chartered Accountant Certificate showing details of goods purchased

15-F-13

PERFORMA-I- Performance of the Company

PERFORMA-II- List of items to be debonded
PERFORMA-III- Specification of the items to be debonded
15-F-14

:Monthly Progress Report

15-F-17

:Annual Progress Report

15-F-18

:Form of Registration-cum-Membership Certificate

APPENDICES

Appendix I :Format for application for Private Bonded Warehouse License

Appendix II :Format for B-17 Bond
Appendix II :Format of application for IEC number
Appendix IV :Format of Bank Certificate to be given with Appendix III
Appendix V:Format of Profile of the Exporter
Appendix VI :Format for Self Declaration for import of Second hand capital goods (less
than 5 years old and costing less than Rs. 1.00 Crores)
Appendix VII :Format of Chartered Engineer Certificate
Appendix VIII :Format of SDF Form
Appendix IX :Format of the Legal Agreement
Appendix X :Format of Legal Undertaking for Debonding of STP units
INTRODUCTION
In the emerging global economy, Information Technology is the largest, fastest growing
and most profitable industry across the globe. Identifying IT as the future for India and its
vast potential, the Government announced a software policy in the year 1986 making
Software, Exports, Development & Training as a major thrust area for which the
Government formulated the STP Scheme covering aspects like simplifications and
rationalisation of procedures. The Government of India established and registered STPI as
an Autonomous Society under the Department of Electronics (Now Ministry of
Information Technology) on 5th June 1991 with an objective to implement the STP
Scheme, set-up and manage infrastructural facilities and provide other services including
professional training.
Efficient and reliable data communication facility is essential for software development, in
emerging areas like software maintenance, application re-engineering, remote computing
and executing offshore projects, IT enabled services, etc.

One of the objectives of Software Technology Parks of India is to provide effective data
communication facilities to the esteemed Software Exporters. In persuasion of this
objective the STPI established its own gateways at its nodal centres located in different
parts of the country. STPI has a complete and state of excellent Infrastructure for operating
an International Gateway. STPI has International gateways operating at Noida (Uttar
Pradesh), Mohali (Chandigarh), Jaipur (Rajasthan), Calcutta, Navi Mumbai (Maharashtra),
Pune (Maharashtra), Bangalore (Karnataka), Manipal (Karnataka), Manipal (Karnataka),
Mysore (Karnataka),Bhuvaneshwar (Orissa),GandhiNagar (Gujarat), Hyderabad (Andhra
Pradesh),Trivendrum (Kerala), Coimbatore (Tamil Nadu), Chennai (TamilNadu),
Rangreth- Srinagar (J&K), Indore (MP), Lucknow (UP), Raipur (MP).
The customer premises in India is connected to their client located abroad by gateway
which is located at STPI's Centres through a radio link ,using either point to point or point
(CDMA) to multi point radio (TDMA) Link. This facilitates any company operating in
India or abroad connected to Internet, and to access SoftNET. Today all major software
exporters in India are customers of Softnet (STPI-Datacom).
SoftNet is the data communication network owned by STPI. Following services are
provided under this Umbrella.

softLink

softPoint

Value Added Services

SoftLink : SoftLINK is the TCP/IP based shared Internet service which uses its own
International Gateway for the upstream connectivity. The TCP/IP service is called shared
Internet as the upstream bandwidth is shared among the users. The user connected on the
service has access to the complete Internet services available world wide such as:

E-Mail

FTP - (File Transfer Protocol)

Remote Login

WWW

UseNET

Data base access.

SoftPOINT : SoftPOINT offers POINT-TO-POINT International Leased HIGH

SPEED DATA Communication links of 64 KBPS upto 2 MBPS. The Customer premises
in India is connected to their client located abroad by gateway which is located at STPI
Cente through a radio link using either the point to point or point to multi point radio
(TDMA) Link. The Service is available round the clock and charges are fixed irrespective
of the time and volume of data transferred by the user.

Value Added Service

Web Hosting Services

Domain Name Services

Mail Relay Services

Consultancy Services

The Software Technology Parks of India (STPI) acts as a Single window in providing
services to software exporters. Some of these centres also provide incubation
infrastructure to the Small and Medium Enterpreneurs enabling them to commence
operations without delay.
The Scheme provides benefits & exemptions like:

100% foreign equity permission;

duty free imports, including import of second hand capital goods;

exemption of local taxes for domestic purchases;

sale in domestic market upto 50% of export;

exemption of corporate Income tax for a block of 10 years.

The Scheme stipulates a Minimum Export Obligation for five years at USD 0.25 Million
(approx Rs.1.25 Crores) or 3 times the CIF value of imported capital goods, whichever is
higher. Minimum Net Foreign Exchange Earning as a percentage of exports (NFEP)
should be 10% for STP units.
PROCEDURE FOR SETTING UP STP UNITS
Procedure for Application
Applications for securing both types of approvals (automatic or through the IMSC) is
submitted to the Director, STPI within whose jurisdiction the unit is proposed to be
situated (see page 11 of Form 15-F-01).

An application for setting up a STP unit is received in the prescribed format no. 15F-01 (available from the concerned STPI) from the potential software exporter.

Application should be duly filled in with signatures and rubber stamp on the each
page of the application.

A demand draft in favour of STPI within whose jurisdiction the unit falls for
Rs.2,500/- on account of Application Fee.

Project Report covering details as per the format given at page 11 of form 15-F-01.

Memorandum & Articles of Association (in case the applicant is a company) and
check whether the Computer Software/IT enabled services is one of the objects
in the Main Object para of the Memorandum of Association.

Partnership Deed (in case of Partnership Firm)

The Director acknowledges the receipt of the application and a reference number is given
to each application.
The applicant is thereafter called to give a presentation on the project that he proposes to
undertake with complete profile of the promoters, field of software development,
marketing arrangement, business plan etc. in the STPI office.
On approval of the project by the Director, letter of permission (in format No. 15-F-02) is
issued to the units. The unit is thereafter considered registered under the STP Scheme.
Competent Authorities for granting the Approvals
As per press note no. 2 of 2000 dt. 11.2.2000:

All proposals conforming to the prescribed parameters (specified in Para 2.3) shall
receive automatic approval within 15 days from the Director, STPI. All proposals
for FDI in STP units qualify for automatic route.

A proposal of an existing company issuing foreign equity shall be forwarded by

Director to the Inter-Ministerial Standing Committee (Chaired by the Secretary,
Department of Information Technology) for consideration. IMSC shall grant
approval within 45 days.

Criteria for Automatic Approval

The following will be the criteria for securing automatic approval from the Director, STPI
within whose jurisdiction the unit is proposed to be set up.

The Directors of STPI have been vested with powers to approve projects
irrespective of the value of import of Capital Goods;

The Units meets the requirements of the Customs Authorities in so far as:

It is amenable to bonding by the Customs;

All the manufacturing operations are carried out in the same premises and the
proposal does not envisage sending out of the bonded area any raw material or
intermediate products for any other manufacturing or processing activity;

However, the unit may be permitted to sub-contract part of their production process
through job work by units in DTA of other STP Units including subcontracting abroad on
fulfillment of prescribed conditions.
Procedure for obtaining approval for Sub-contracting
Request in this regard is permitted by the STPI on the basis of factors such as fixation of
Input and Output norms, and is processed by Customs authority on furnishing of
undertaking by the concerned units. If the job is sub-contracted to another STP unit then
only one of them is eligible to claim export benefit.

The unit is required to submit a request letter alongwith the details of materials to be sent
for job work and the goods to be received after the job work is completed.

The minimum export performance for five years should be USD 0.25 Million or 3
times the CIF value of imported capital goods, whichever is higher. Minimum Net
Foreign Exchange Earning as a percentage of exports (NFEP) should be 10%.

LEGAL FORMALITIES
Letter of Permission (LOP) issued by the STPI would be construed as a license for all
purposes under the scheme including procurement of raw materials and consumables. The
LOP shall specify the items of manufacture, limit of imported capital goods, projected
export turnover in 5 years, location of STP unit, validity period, Net Foreign Exchange
earnings as a percentage of exports (NFEP), limitation regarding sale of finished goods
and rejects in the Domestic Tariff Area (DTA) and such other matters as may be necessary
and also impose such conditions as may be required. The unit is required to send a letter to
the Director, STPI confirming the acceptance of the terms and conditions as laid down in
the LOP.
Thereafter, the unit shall execute a Legal Undertaking as per format in Appendidx-IX,
with the Director, STPI concerned.
Procedure for signing the legal agreement

The Legal Undertaking is to be executed on a stamp paper of Rs.50/- procured

from the civil court under which the concerned STPI centre falls.

Each page of the Legal Undertaking is required to be signed and stamped by a

person duly authorised in this behalf along with the Common Seal of the Company.

A copy of the Board resolution authorising the person to act as signatory on its
behalf is also required to be enclosed.

The Legal Undertaking after acceptance is signed by the authorised signatory of

STPI and the original is retained. A photocopy of the same is returned to the unit
for record purposes.

Copy of the Legal Undertaking is to be given to the Customs by the unit at the time
of Customs Bonding of the premises.

A unit is required to pay 3-year advance service charges at the time of signing of the legal
agreement on the basis of the projections made by it in the application, subject to a
minimum of Rs. 50,000/- as per the following norms:
Export Projection

Service Charges
Rs. 15,000 per
Exports upto Rs. 50 lacs per annum
annnum
Exports more than Rs. 50 lacs per annum Rs. 50,000 per
but upto Rs. 300 lacs
annnum
Rs. 1,00,000 per
Exports above Rs. 300 lacs per annum
annnum
Subsequent charges will be payable on annual basis as per the above mentioned norms.

In case of failure to fulfill the obligation stipulated in tbe Letter of Permission it would be
liable to penalty in terms of the Legal Undertaking or any other law for the time being in
force. The unit will also be liable for the following:

payment of custom and excise duty on- Plant, machinery, equipment, raw material,
components and consumables.

Penalty under Foreign Trade (D&R) 1922 and Rules made thereunder

Permission under Foreign Trade (Development & Regulation) Act, 1992, and the
Exim Policy is required to be taken by the unit before the products developed for
exports are disposed off in the local market

Green cards to STP units

Green Card enables the units to get priority services from all Government Departments/its
agencies. It helps units to get priority allotment of telephones, electricity connections etc..
As per Ministry of Commerce No.6/Coord./26/91-EPZ dt. 1.1.1994, the Director, STPI
shall issue Green Cards containing particulars of the units, its name, address, location and
details of products manufactured.
The unit must make a single application for the Green card and RCMC.
Green cards are issued to all STP units on acceptance of the legal agreement. It is valid for
two years. After its expiry when the units approach STPI for its renewal, the card is
renewed for another one year after ensuring that the unit has been regularly furnishing
monthly/annual progress reports in the specified format (viz. Monthly progress reports in
format no. 15-F-14 and Annual progress report in format no. 15-f-17).
BONDING
STP units are compulsorily required to carry out their operations in a Custom bonded area
whether it avails the benefits of Customs Duty/Excise Duty exemption or not. Vide
Notification No. 33/94-Cus.(NT) dated 1.7.1994, the power to declare an area as a Custom
bonded area has been delegated to the Commissioner of Customs within their respective
jurisdictions. To get the premises Custom Bonded, the units are required to complete the
following formalities:

Private Bonded Warehouse License from the Customs.

Single all purpose bond (B-17).

PROCEDURE FOR BONDING

A STP unit is required to submit the following documents to get the premises bonded:

Three copies of Floor Plan.

Three copies of tentative list of Capital Goods (along with their value) proposed to
be imported and indigenous goods to be procured for the project.

The Director attests the floor plan and the list of Capital Goods. Two copies of the floor
plan and one copy of tentative list of capital goods are forwarded to the Jurisdictional
Assistant Collector of Customs in the form enclosed at Appendix I Customs will issue a
License called Private Bonded Warehouse License indicating its period of validity and
CIF value of duty free equipment which can be kept within the same. This custom bonding
is valid for 5 years. The unit is required to submit the following documents to the Customs
authorities:

Copy of letter of approval issued by the Director, STPI.

Memorandum and Articles of Association and Certificate from the Registrar of

Companies for its incorporation.

Floor plan duly approved by STPI.

Copy of Purchase/Lease deed of building/premises.

Copy of Legal Agreement executed with STPI.

List of goods proposed to be imported attested by STPI.

Copy of IEC code.

Copy of Green card issued by STPI.

List of Directors of the Company.

B-17 Bond.

Single all purpose bond (B-17)

The STP unit is required to execute a single bond (B-17) as per format given in AppendixII before the Assistant Commissioner of Customs in whose jurisdiction the unit is situated
(in terms of Board's Circular No. 76/99-Customs dt 17.11.99). The Bond amount has to be
equivalent to 25% of the duty leviable on the sanctioned requirement of imported and
indigenous capital goods plus duty forgone on the raw materials to be held in stock for 3
months. The Assistant Commissioner of Customs before whom the above bond is executed
would issue a certificate stating that the unit has executed the bond. On the strength of this
certificate the goods will be allowed clearance under the exemption notification.
Distinct Identity
If an industrial enterprise is operating both as a domestic unit as well as an STP unit, it
shall have two distinct identities with separate accounts including separate bank accounts.
It is, however, not necessary for it to be a separate legal entity, but it should be possible to
distinguish the imports and exports or supplies effected by the STP units from those made
by the other units of the enterprise.
Multiple Locations
A unit may operate from one or more locations falling under the same Jurisdictional Area
of STPI Centre. The unit has to provide valid reasons for having more than one

operational areas under the same STP approval. The unit has to get these Multiple
locations custom bonded and have to maintain different bond registers for each of the
locations as per procedure specified in the handbook.
Registration-cum-Membership Certificate
The registering authority for STP Units is the concerned Director, STPI. A separate
Registration-cum-Membership Certificate (RCMC) shall not be required.
If the party request for RCMC, they may apply in the format no. 15-F-18 (Part-I).
Importer-Exporter Code Number
Every exporter is required to have importer-Exporter Code Number (IEC) mandatorily as
per Foreign Trade (Development & Regulation) Act. However, only one IEC is necessary
for one company, even if it has multiple offices and export operations.
IEC number will be issued by Directorate General of Foreign Trade based on a request as
per format specified in Appendix III along with a Bank certificate as per format in
Appendix IV along with a profile of the Exporter in Appendix V.
The unit should approach DGFT for IEC No. only after obtaining the PAN no.
IMPORT BY STP UNITS
Importer-Exporter Code Number
STP units are free to import all capital goods including office equipment and those
required for creating STP infrastructure unless otherwise the same are in the prohibited
list. Duty free import of equipment is permitted based on an Import Certificate obtained
from STPI along with Proforma invoice duly attested.
In the case of STP units, import of capital goods, including second hand capital goods,
may be permitted in accordance with the list attested by the Director, STPI within whose
jurisdiction the unit falls.
Procedure for obtaining Import Certificate:

STP units are required to give a request letter in format 15-F-04 (Part-I & Part-II)
and three copies of performa invoice.

The items should be relevant to the activity undertaken by the unit.

In case of STP units which has completed one year of operation the unit should
have met the Export Obligation/ NFEP as specified in para 7.0.

The STP units should have submitted the monthly progress report and should be
prompt in paying the service charges for that specific financial year.

The total imports of capital goods of the STP unit should be within the initial
approved CG limit or subsequent enhancement of the same.

The Form 15-F-04 (Part-I) should clearly state the method of import i.e., Outright
Purchase or Loan Basis or Free of Charge Basis.

The invoice should clearly state that,

THE GOODS ARE SENT ON LOAN BASIS if the import is on Loan basis.

THE GOODS ARE FREE OF COST in case the import is on Free of Cost basis.

The invoice should be on CIF value. If it is FOB value, the unit is supposed to add
21.125% to the FOB value and then derive the CIF value. The supplier should sign the
invoice.

A copy of HIGH SEA SALE agreement should be enclosed in case of import of

capital goods through local vendor.

If the material sought to be imported are consumable, spares or components ensure

that the same are relevant to activity of the unit as per the approval letter.

If the capital goods sought to be imported are Second hand, the request letter
should be supported with Self-Declaration from the importer (as per the format
given in Appendix VI if the equipment is five years old and costing less than Rs. 1
Crores. If the Equipment is more than five years old and costing more than Rs. 1
Crores, the request is supported with a Chartered Engineer Certificate (as per the
format given in Appendix VII).

A letter authorizing the STP unit to import duty free goods, along with attested performa
invoice is issued to the unit.
As soon as the goods land at the port of Import the units are advised to immediately file
the Bill of Entry at the customs. The unit may also file Bill of Entry upto 30 days in
advance to save time. This will ensure that there is no procedural delay and the goods are
cleared within a week's time after which demurrage charges are applicable.
As per M.F. Circular No. 58/2000-Cus dt. 10.7.2000 (F.No. 305/60/99-FTT) in view of
RBI's decision to permit authorised dealers to allow remittances towards import of
software through data communication link or internet, the units operating under STP
scheme will be allowed to import software through data-communication link and internet.
Considering that such imports would not be available for physical verification, proper
accountal of such imports in the records maintained by the unit and regular verification of
such records by Customs are necessary. Accordingly the following procedure is to be
followed by such units:

The units shall furnish their annual requirements of software intended to be

imported and estimated foreign exchange outflow against such import to the
Director, STPI.

Immediately after the import of software through data communication link or

internet, the unit shall inform in writing to the Director, STPI and shall get a
certificate certifying the import of software and its value.

The unit shall produce this letter from the Director of STPI to the jurisdictional
Assistant Commissioner of Customs incharge of STP as a proof of import
indicating value etc. within 48 hours of such import.

The unit shall file Bill of Entry along with certificate from Director STPI and
invoice, attested by the Bank, along with other relevant documents within 48 hours
of import to the jurisdictional Assistant Commissioner of Customs or Central
Excise for obtaining notional out of charge.

The documents such as invoice etc. shall be routed through the Bank.

The unit shall account for such import in their records and the same would be taken
into consideration for determining the export obligation and calculation of NFEP.

Approval for Enhancement in the value of Capital Goods:

STP units are required to ensure that they operate within the imported Capital Goods (CG)
limit as indicated in the approval letter. Therefore, before this limit is exhausted, the units
are required to apply for enhancement of the CG limit.
The following procedure is required to be followed for getting the approval for
enhancement in the value of Capital Goods:

A request letter with relevant form no. 15-F-07 is submitted by the STP unit.

The unit should have achieved 10% NFEP. In case of units registered before 1st
April, 1999, Net FE should be >/= Total Export Obligation;
Where Export obligation = 1.5 times CIF value of hardware imported including
software + 1.5 times of the annual wage bill
And Net FE = Total export earnings FE outflow (other than CG)

The unit should have submitted its performance report certified by a Chartered
Accountant as per format no. 15-F-07 (Proforma I & II).

The Director thereafter signs the permission of CG enhancement and the same is issued to
the party.
Certification for Re-Export of imported goods
The units may re-export the capital goods for the following reasons as per applicable
custom notification:

Re-Export of Capital Goods on completion of the project or bond period.

Re-Export of Capital Goods for Repair.

Re-Export of Capital Goods for Replacement.

A request letter is required to be furnished by the unit with sufficient reasons for re-export
along-with following documents:

A copy of Import certificate with relevant invoice issued by the STPI

A copy of Import certificate with relevant invoice issued by the STPI

A copy of Import certificate with relevant invoice issued by the STPI

The Director signs the Re-Export Invoice/ List of items and the certificate of Re-Export
which is issued to the STP unit.
Goods or parts thereof on being imported and found defective or non-functional after use
may be re-exported for repair purpose abroad for which STPI permission is necessary. The
unit has to get a certificate from bank if any FE outflow has taken place or not. Based on
this they have to take a GR waiver from RBI. After getting the GR waiver the unit has to
approach the customs to finally re-export the items for repair. While importing back no
separate permission is required if the repair is free of cost.
Goods or parts thereof on being imported and found defective or otherwise unfit for use or
which have been damaged after import may be exported, and goods in replacement thereof
may be supplied free of charge by the foreign supplier as imported against a marine-cumerection insurance claim settled by an insurance company. Such goods shall be allowed
clearance by the Customs authorities without an import license provided that:

The shipment of replacement goods is made within 24 months from the date of
clearance of the previously imported goods through the customs or within the
guarantee period in the case of machine or parts thereof where such period is more
than 24 months old.

No remittance shall be allowed except for payment of insurance and freight

charges where the replacement of goods is by foreign suppliers subject to payment
of Insurance or freight by the importer and documentary evidence to this effect is
produced at the time of making the remittance.

APPROVAL FOR INDIGENOUS PURCHASE (CT-3)

The following procedure is required to be followed for obtaining approval for purchase of
excise duty free indigenous goods by STP units:

A request letter with three copies of Performa invoice from the supplier.

The consignment of Capital Goods should be destined to the STP unit.

The goods to be procured should be relevant to the items to be manufactured by the

unit as per the approval letter.

Thereafter an approval letter for indigenous purchase is issued to the STP unit.
MONITORING THE PERFORMANCE OF STP UNITS
The monitoring authority for STP units is the Director, STPI within whose jurisdiction the
unit is situated. All the information required by the Office of the DGFT etc. is obtained
through him.

Guidelines for monitoring of the performance of the units are given in Appendix 16E of
the Handbook of procedures.
Monthly Progress Reports (MPRs)
All STP units are required to submit MPRs by 10th of every month, which can also be
done online. It is a mandatory requirement. Units that become irregular in submitting
MPRs can be denied services by STPI. MPRs are required to be submitted as per format
no. 15-F-14.
Annual Progress Reports (APRs)
All STP units are required to submit APRs every year by April 10 every year, which can
also be done online. This is also a mandatory requirement. Units that become irregular in
submitting APRs can be denied services by STPI. APRs are required to be submitted as
per format no. 15-F-17.
EXPORT PERFORMANCE OF STP units
The export obligation of the STP units getting registered after April 1, 1999 and existing
units applying for expansion of their projects has been modified. Instead of Export
obligation, Net Foreign Exchange Earnings as a percentage of exports (NFEP) would be
calculated.
For the Units who have got registered before April 1, 1999, the Export obligation would
be calculated as follows:
Export Obligation = 1.5 times CIF value of the hardware imported including software +
1.5 times of the annual wage bill
In case of units which get registered after April 1, 1999, the Scheme stipulates that the
minimum Export Obligations for five years should be USD 0.25 Million or 3 times the
CIF value of imported capital goods, whichever is higher. Minimum Net Foreign
Exchange Earning as a percentage of exports (NFEP) should be 10% for STP units (on
annual basis or for 5 years).
NFEP shall be calculated annually and cumulatively for a period of five years from the
commencement of commercial production according to the following formula:
NFEP=AB x 100A
Where, NFEP is Net foreign exchange earning as a percentage of export.
A is the FOB value of exports by 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. Input means raw materials, intermediates, components,
consumables, parts and packing materials.
Notes:

If any input is obtained from another STP unit, the value of such input shall be
included under B.

If any capital goods imported duty free is leased from a leasing company, received
free of cost and/or loan basis or transfer the CIF value of the capital goods shall be
included or excluded, as the case may be pro-rata, under B for the period it remains
under bond.

For annual calculation of net foreign exchange as a percentage of exports, imported

capital goods and lump sum payment of foreign technical know-how fee shall be
included under B.

Supplies made to bonded warehouses by STP units are treated as exports for the purpose
of domestic sales entitlement.
DTA sale against foreign exchange is counted towards NFEP/EP, provided the payment is
made from EEFC account of the buyer only.
Process for Export Certification:
Before commencement of the project, STP units are required to submit a copy of the
Contract/Purchase order with the client abroad.
STP units are permitted to export computer software in following forms:

Through data communication links

Physical (floppies, magnetic tapes, CDs)

On site consultancy

After completion of the project, the STP units will get the exports attested from STPI in
the following forms:

SDF form as per format in Appendix VIII, for physical exports.

PP form for parcel exports.

Form A & B for consultancy export.

SOFTEX form for exports through datacom links.

Once the above forms are attested, the remittances should be received within 180 days of
the date of attestation by STPI.
The procedure and the documents to be submitted are as follows:
Through data communication links
When export of software is made through data communication, it will be declared on
SOFTEX form (which are available for sale to exporters through regional offices of

Reserve Bank and STPI centres). The form has to be submitted to the concerned STPI
within 21 days of raising the invoice as per the guidelines of RBI.
Invoicing

In respect of long duration contracts involving series of transmissions, the exporter

should bill their overseas clients periodically i.e. at least once a month, or on
reaching the milestone as provided in the contract entered into with the overseas
client and the last invoice should be raised not later than 15 days from the date of
completion of the contract. It would be in order for the exporters to submit a
combined SOFTEX Form for all the invoices raised in a month on a particular
client, including advance remittances received.

In respect of contracts involving only one shot operations', the invoice should be
raised within 15 days from the date of transmission.

The exporter should submit the SOFTEX form to the concerned STPI for
valuation/certification not later than 21 days from the date of invoice of the last
invoice raised in a month.

Each exporter would be required to designate a particular branch of an Authorised Dealer

for the purpose of handling the export documents and realisation of the export proceeds.
The STP units are required to submit the following for the declaration of export through
Data Communication Link:

SOFTEX Form in triplicate (duly completed).

Three copies of Invoice.

A copy of the contract/purchase order with client.

Back-up form with proof of data-communication.

Attestation charges in case of non-STP units as per the following:

Invoice value upto USD 100

Invoice value USD 101 USD 500
Invoice value USD 501 USD 1000
Invoice value USD 1001& above
Disposal of SOFTEX Forms

:Rs. 100 per invoice

:Rs. 250 per invoice
:Rs. 500 per invoice
:Rs. 1000 per invoice

After approval by the Director, STPI, the original attested SOFTEX Form alongwith
Invoice is sent to the Exchange Control Department of RBI under whose jurisdiction the
exporter is located and a duplicate copy is given to the exporter. Within 21 days from the
date of certification of the SOFTEX form, the exporter should submit the duplicate copy
along with a copy each of the supporting documents to the authorised dealer. This will be
retained by the authorised dealer till further full export proceeds have been realised and
thereafter will be submitted to RBI duly certified under cover of an appropriate return
called R-supplementary return along with a copy of attested invoice.
Time limit for realisation of export value

The full value of software exported as declared on the SOFTEX form should be realised
on due date of payment or within 180 days form the date of invoice, whichever is earlier.
Physical (floppies, magnetic tapes, CDs, etc.)
All exports by non-postal channels of computer software prepared on magnetic tape or any
other physical media are required to be declared on SDF Forms along with the invoices
and shipping bills. These documents have to be submitted to STPI for valuation of the
software to be exported. After valuation all the documents and the software have to be
submitted to customs for exports. The software has to be escorted by customs from the
bonded area to the port of export.
The STP units are required to submit the following for the declaration of the Export
through floppies, magnetic tapes, CDs etc.:

SDF Form in triplicate (duly completed).

Three copies of Invoice.

A copy of the contract/purchase order with client.

Attestation charges in case of non-STP units.

After approval by the Director, STPI attested SDF Form alongwith Invoice is sent to
Customs and a duplicate copy is given to the party.
On site consultancy:
The unit provides services by deputing the professionals at the client's site abroad. The
declarations for getting remittances through RBI are given in Form A and Form B.
The units are required to submit Form A along with the Contract agreement/ purchase
order before the consultants of the software developing unit are deputed abroad to provide
software consultancy services to overseas clients.
FORM-A:

A copy of Purchase order/ Agreement with the client is submitted at STPI with
Form-A (Format no. 15-F-09) in triplicate prior to attestation of Form-B.

A number is given for registration of form-A against the purchase order/ agreement
from the register Form-A&B'. After approval by the Director, one copy of attested
form-A is given to the unit and one copy will be sent to RBI directly from STPI.

After completion of the project or as soon as payment in respect of the consultancy

services have been received, the exporter shall submit the required information in Form-B.
This is necessary so as to enable STPI to authenticate figures of exports for discharge of
export obligations.
FORM-B:
For attestation of Form-B (Format No. 15-F-10), the following documents are required:

Three copies of Form-B duly filled up

Three copies of Invoice.

Copy of the FIRCs, if foreign currency is already realised.

After approval by the Director, a covering letter with two copies of attested form-B
alongwith invoices are given to the party.
Both Form A & B after attestation from STPI has to be submitted to the bank (authorised
dealer) for realisation of the money.
SALES IN DOMESTIC TARRIF AREA
The entire production of STP units shall be exported subject to the following:

Unless specifically prohibited in the LOP, rejects may be sold in the DTA, on
payment of duties as applicable to sale under para 9.9(b) of the Policy on prior
intimation to the customs authorities. Such sales shall be counted against DTA sale
entitlement under para 9.9(b) of the Policy. Sale of rejects upto 5% of FOB value
of exports shall not be subject to achievement of NFEP.

Sale in DTA in any mode, including on-line data communication, shall be

permissible upto 50% of FOB value of exports.

DTA Sale of Software through Data Communication

M.O.F (DR) Circular No. 54/98-Cus (F.No. 305/210/97-FTT dated 21.7.1998) clarifies
that the units can sell their software through data communication link as sale of software
to DTA through data communication link within permissible limit is allowed.
Eligibility for DTA Sales
The STP Scheme provides for DTA sales depending on the export obligation achieved (as
per para 7.0). STP Units are permitted DTA sales upto 50% of FOB value of exports
subject to fulfillment of minimum export obligations. STP units wishing to sell in DTA are
required to apply to STPI for obtaining DTA entitlement. After the DTA entitlement is
issued by STPI, STP units can do DTA sales in following forms:

Physical

Consultancy Services

Through Data-communication links

The following DTA sales by STP units are eligible for export obligation benefit:

Supplies to other STP/100% EoU/EHTP units;

Supplies in DTA against payment in foreign exchange;

Supplies in DTA under global tender conditions;

Supplies eligible for Deemed Export benefit (as per para 12.0).

Procedure for getting approval by STP units for DTA sales

The STP units are required to submit the following documents to get approval of STPI for
DTA sales:

A request letter with relevant form no. 15-F-06;

The unit should meet Export Obligation;

The unit should have achieved 10% NFEP;

The unit should have submitted the performance report in format no. 15-F-13
(Proforma-I) certified by Chartered Accountant.

POWERS OF APPROVAL OF THE DIRECTOR

As per Ministry of Industry Press Note No. 9 of 1997 dt. 7.7.1997 apart from the original
powers under the Policy and Handbook, the Directors have been delegated with the
following powers:
Conversion of existing DTA units into STP units
Existing DTA units may also apply for conversion into an STP unit, but no concession in
duties and taxes would be available under the scheme for plant, machinery and equipment
already installed.
Where the unit has:
(i) an outstanding
export
: To be subsumed in the export
commitment
performance of the unit
under EPCG
Scheme
: Apply to the Advance Licensing
(ii)Outstanding Committee for reducing export
export
commitment in proportion to the
commitment
quantum of duty free material
under the
actually utilised for production. The
Advance
unutilised material (imported against
Licensing
the Advance License) shall be
Scheme
permitted to be carried forward
under the STP Scheme.
The applications, which fulfil the above criteria, should be submitted in the prescribed
form as mentioned in para 2.1, to the Directors of STPs, as the case may be. All other
proposals should be submitted to the Secretariat for Industrial Assistance in Department of
Industrial Policy & Promotion, Udyog Bhavan, New Delhi. The application form shall be
submitted in 10 copies accompanied by Crossed Demand Draft for Rs. 2500/- drawn in
favour of Pay and Accounts Officer, Department of Industrial Development, Ministry of
Industry, payable at the State Bank of India, Nirman Bhavan, New Delhi.

The existing STP units may also apply for conversion/merger to EOU unit and vice-versa.
In such cases fresh application needs to be filed with the Director, STPI in the same format
as for new STP units as mentioned in para 2.1.The units will continue to remain in bond
and avail the permissible exemption in duties and taxes as applicable under the relevant
scheme.
Post Approval Matters
Government is conscious of the fact that the project parameters need revision during
implementation of the project, necessitating amendments in the approval letters. For
expeditious disposal of such cases, powers have been delegated to the Directors of STPs
for the following types of proposals:
Additional import of Capital Goods:
To allow enhancement in the total value of imported CG: Procedure for obtaining approval
has been provided in Para 4.2.
Attestation of list of imported CG:
To attest the list of imported CG required for the project, within the value approved
(procedure as prescribed in Para 4.1.1).
Change of location:
To permit change of location from the place mentioned in the approval letter to another,
provided:

there is no other change in terms and conditions of the approval;

the new location is within the territorial jurisdiction of the Director STPI;

the new location also conforms to the locational policy announced by Department
of Industrial Policy and Promotion.

Procedure for issuing Approval for Change of Location:

The following documents are required to be submitted to the STPI for issuing approval for
change of location:

A request letter alongwith three copies of floor plan where the operations are
proposed to be shifted. The floor plan should mention the address and dimensions
of the new location.

The Director signs the approval letter for change of location and the same is issued to the
unit.
Extension of validity of Letter of Permission:
In case of genuine reasons for delay in implementation of the project, the jurisdictional
Director can extend the validity of LOP by three years beyond the initial validity period, to
enable applicant to implement the project.

Disposalofobsolete capital goods:

As per Circular No. 49/2000-Cus dt. 22/5/2000 (F.No.305/33/2000-FTT) units are allowed
to destroy obsolete capital goods and spares without payment of duty with prior
permission of Customs. Such destruction shall be carried out in the presence of
Customs/Central Excise officers. The officers supervising destruction may exercise due
caution to ensure that capital goods are destroyed fully rendering them unfit for further use
and give them certification to that effect. After destruction of capital goods, if the remains
have scrap value, the same may be cleared by the unit in DTA on payment of duty
applicable to scrap.
Import of office equipment:
To import office equipment, upto 20% of the total CG value approved, subject to a
maximum of Rs. 25lacs.
Change in name:
to authorise change in name of the company provided the new company undertakes to
takeover the assets and liabilities of the existing unit.
Procedure for obtaining approval for change of name:
STP Units requesting for change of name are required to submit the following documents
(as applicable):

Copy of undertaking/resolution (both from the old and new organisation) that all
assets and liabilities are taken over by the organisation under the new name.

Copy of certificate from Registrar of Companies ratifying the change.

Copy of Memorandum and Articles of Association.

The new Company should be promoted by the original applicant of the STP unit.

The reason justifying the change in the name.

The Director gives the approval letter for change of name which is issued to the party.
Merger of two or more EOU units:
to permit merger of two or more units into one unit provided the units fall within the
jurisdiction of the same Director.
Director has been authorised to do valuation of exports declared on SOFTEX form
by the units as per RBI A.D.(MA Series) Circular No.35 dated 25.11.1999.
Inter unit transfer & temporary removal of Goods:
STP units are permitted to supply/transfer goods imported by a unit to another STP unit
after obtaining approval from STPI. The inter unit transfer is permissible as per applicable
customs notifications. The unit can apply to STPI for Inter unit transfer of Capital Goods

for the purpose of shifting for the purpose of repair/demonstration; and shifting from one
location to another location.
As per M.F.(DR) Circular No. 41/99 (F.No. 314/16/99-FTT)dt.30.6.1999, STP units may,
temporarily take out of the bonded premises duty free laptop computers and video
projection systems for working upon by authorised employees provided that the procedure
as envisaged in Circular No. 17/98-Customs, dated 16.3.1998 is followed.
Procedure for obtaining approval for Inter unit transfer and temporary removal of Goods:

A request letter with Shifting Invoice/List of items is required to be submitted by

STP units.

The shifting should be done to another private bonded warehouse.

If the shifting is for demonstration purpose the STP unit should submit the
following documents:

Copy of Bill of Entry.

Copy of Import permission with invoice.

List of items to be removed along with its relevant details.

In case of transfer of goods if there is any commercial transaction involved, the

obligation towards duty free imports is transferred to the transferee. If there is no
commercial transaction involved, the export obligation on the imported goods
remains with the original importer, but in both the instances amount equal to the
invoice effecting the transfer is reduced from the approved value of Goods of the
transferee and the same value is added to the approved value of Goods imported.

The Director signs the approval letter alongwith List of items. The original copy of
approval letter alongwith the list of items is issued to the STP units.
Approval for Expansion of the Operations:
STP Units requesting for expansion of the operations are required to submit the following
documents (as applicable):

A request letter alongwith three copies of floor plan where the operations are
proposed to be expanded.

The floor plan should mention the address and dimensions of the new location.

A performance report in Format no. 15-F-13 (Proforma-I) certified by a Chartered

Accountant.

The Director signs the approval letter for expansion of the Operations and the same is
issued to the party.
RE-IMBURSEMENT OF CENTRAL SALES TAX

The Director STPI has been empowered to disburse the claims for CST. The units are
entitled to a full reimbursement of Central Sales Tax (CST) paid by them on the purchases
made from the DTA for the production of goods and services on the following terms and
conditions:

The supplies from DTA to STP units must be utilised for production of goods
meant for export and may include raw material, components, consumables, packing
materials, capital goods, spares, material handling equipment etc. on which CST
has been actually paid by the STP units.

While dealing with the application for reimbursement of CST, the Director shall
see that the purchases are essential for the production of goods meant for export.

Procedure for reimbursement of CST

Application for CST reimbursement is to submitted to concerned STPI as per the

format given at 15-F-11.

The reimbursement of CST, shall be admissible only to those units who get
themselves registered with the Sales Tax Authorities in terms of Section 7 of
Central Sales Tax Act, 1956 and furnish a photostat copy of the same.

Reimbursement is limited to the payment of CST against C-Form only. Claims

shall be admissible only if payment is made through the separate bank account
maintained by STP unit.

Following documents are required to be enclosed with the application:

Fellow Chartered Accountant Certificate showing details of goods

purchased and their receipt, as per the format 15-F-12.

The proof of registration with central sales tax authorities.

A statement of supplies indicating details of invoices C-forms payments etc.

duly certified by FCA.

Counterfoil of original C-forms issued by the party to the supplier

alongwith photostat copies.

The STP unit shall also intimate the name of the person who is authorised by them
to sign the C Form and furnish three copies of his specimen signature which will
be kept in the relevant file of the unit maintained by the STPI.

The reimbursement will be made on quarterly basis. No claim for reimbursement

will normally be entertained if not claimed within a period of six months from the
completion of the quarter in which the claim has arisen. In case of procurement of
goods against payment in installments, the CST reimbursement claim may be made
in the quarter in which the full payment has been effected against the invoice. In
exceptional cases, the Director may consider delayed applications after satisfying
that the delay was due to genuine reasons.

Only one consolidated claim for a quarter will be admitted for reimbursement of
CST. If any supplementary claim is received within the specified time limits, such
application shall be considered after imposing a cut of @10% on the entitlement.

After approval of the Director, the case is sent to finance division of the STPI for
preparation of demand draft in favour of the concerned unit.
DEBONDING
As per Public Notice no. 12/2000 dt. 15.5.2000, STP units may apply for debonding either
on their completion of the bonding period or on their inability to achieve the Export
Obligation, or any other requirement. The Exim Policy vide M.F. (D.R.) Letter F.No.
305/136/92 FTT dt.5.6.1992 permits the STP Units to debond before the normal stipulated
period on their inability to achieve export obligation, or other requirements subject to the
satisfaction of the Director, STPI.
Such debonding shall be subject to payment of Customs and Excise duties and in
accordance with the Industrial Policy in force at the time. If the unit has not achieved the
export obligations under the scheme, the debonding shall also be subject to penalty as may
be imposed by the DGFT. On debonding the Unit will be liable to pay the following:

Customs duty on Capital goods on the depreciated value at the rates prevalent on
the date of debonding: As per consolidated notification no. 133/94 dt. 22.6.1994
both dated 15.4.1994 duty on imported capital goods and raw materials shall be
levied at the time of their release from Customs bond at the rate prevalent on that
date. The depreciation will also be allowed for calculation of the value for levy of
duty on such exit of capital goods.

Customs duty on unused imported raw materials and components on the value at
the time of import, at the rate in force on the date of clearance.

In respect of excisable goods, excise duty to be levied without depreciation on such

goods at rates as on the date of clearance.

The penalty imposed by appropriate authority under the Foreign Trade

(Development & Regulations) Act, 1992 for non-fulfillment of the conditions of
approval.

In case, a STP unit is unable to utilize the imported goods including the Capital Goods (for
valid reasons) the unit shall re-export or dispose them in DTA on payment of applicable
duties and submission of import license by the DTA unit. Supply from one STP unit to
another such unit is treated as import under the scheme.
Imported machinery/capital goods, which are obsolete, are disposed off, subject to
payment of customs duties on the depreciated value thereof. The depreciation and rate of
custom/Excise duty on the goods are imposed by the custom/excise authorities as per the
norms applicable at the time of debonding.
Procedure for De-Bonding of STP Units:

Following documents are submitted by the units alongwith the request of

debonding:

Duly filled up format no.15-F-13 (Proforma I, II & III) signed and stamped
on each page by the authorised person certified by the Chartered
Accountant.

Original Green Card/ RCMC.

The Director, STPI ensures the following:

Whether the unit is meeting export obligation/ NFEP/ Minimum export

performance or not. In case the unit is not meeting export obligation/
NFEP/ Minimum export performance, the case is referred to DGFT for nonfulfillment of export obligation/ NFEP/ Minimum export performance.

Whether the unit has paid all outstanding dues of STPI.

After the receipt of the above said documents and calculation of export obligation/NFEP/
Minimum export performance, the Director gives his approval. This in-principle
permission letter is issued to the units subject to payment or applicable Customs and
Excise duties.
After fulfilling the conditions enclosed in the in-principle permission of debonding, the
party has to approach STPI for issuance of final permission for debonding.
The unit is required to submit the following documents for this purpose:

photocopy of Legal Undertaking executed with DGFT as per format in Appendix

X.

Photocopy of the receipt issued by DGFT in respect of (i) above.

NOC from Customs.

After the approval of the Director a letter of final permission for debonding is issued to the
party.
Rate of depreciation for debonding of Capital goods from the STP units
It was felt desirable to provide higher depreciation for computers and other capital goods
because of the rapid obsolescence as compared to other capital goods. Hence, vide M.O.F.
(D.R), Circular No. 49/2000-Cus dt.22/5/2000 accelerated depreciation for computers and
computer peripherals has been provided i.e. maximum limit of 90% would be achieved
over a period of 2 years and 9 months.
In view of above the following rate of depreciation is allowed for computers and computer
peripherals:
For every quarter during 1st year
For every quarter during 2nd year
For every quarter during 3rd year
For every quarter during 4th year and onwards
Subject to an overall limit of 90%.

@10%
@8%
@7%
@5%

The period of depreciation would be counted from the date the capital goods have been put
into the manufacturing process in the STP unit upto the date they are sought to be cleared
to the DTA. In case of the second hand imported capital goods, the depreciation shall be
calculated from the value which has been accepted by the Assistant Commissioner
Customs at the time of assessing the Bill of Entry.
The depreciation shall be calculated as per straight line method. However in case of partial
debonding of the computer or other capital goods which are sold at a value higher than
that arrived after allowing depreciation at the above said rates, the transaction value may
be taken as the assessable value for the purpose of calculation of duty.
DEEMED EXPORTS
Following supplies by STP units qualify for deemed export in so far as computer software
is concerned and would be treated towards fulfillment of export obligation.

Supply of goods against duty free licenses issued under the Duty Exemption
Scheme;

Supply of goods to STPs/EHTPs;

Supply of capital goods to holders of licenses under the EPCG scheme subject to
the condition that such supplies will be eligible for benefits as stated in paragraph
6.8 of the policy;

Supply of goods to projects financed by multilateral or bilateral agencies Funds as

notified by the Department of Economic Affairs, Ministry of Finance under
international competitive bidding or under limited tender system in accordance
with the procedures of those agencies, where legal agreements provide for tender
evaluation without including customs duty.

TAX INCENTIVES FOR STP UNITS

Vide Finance Act, 2000 ten year Tax Holiday i.e. Profits and gains derived from a newly
established industrial undertaking in STP, are fully exempt for a period of ten consecutive
assessment years beginning from the first year of production.
Conditions
The tax concession is available to all taxpayers including foreign companies and resident
non-corporate taxpayers subject to the satisfaction of the following conditions:

The industrial undertaking should begin to manufacture computer software during

a previous year relevant to A.Y. 2001-02 or thereafter.

The industrial undertaking should not have been formed by the splitting up or
reconstruction of a business already in existence, except an industrial undertaking
formed as a result of re-establishment, reconstruction or revival of the business in
accordance with Section 33B.

The industrial undertaking should not have been formed by the transfer to a new
business of machinery or plant previously used for any purpose, exceeding 20% of
the total value of the machinery or any plant in that business.

No deduction shall be allowed from A.Y. 2010-11 and onwards.

The export proceeds are received in or brought into India within 6 months from the
end of the previous year or within such further period as the component authority
may allow.
An audit report in Form 56F from a chartered accountant, certifying that the
deduction has been correctly claimed furnished alongwith the return.

Units availing complete tax holiday u/s 10A are not entitled to the other concessions
available under the Act viz. unabsorbed depreciation allowance, unabsorbed investment
allowance, unabsorbed development rebate, unabsorbed expenditure on family planning,
set off any carry forward of losses, deductions under section 80HH/80HHA/80-I/80IA/80-IB/80J, etc of the Income Tax Act, 1961.
The assessee has an option to choose either the complete tax holiday under Section 10A or
all other tax concessions available under the Income Tax Act. For this purpose, the
assessee should before expiry of due date for furnishing the return of income under
Section 139(1), furnish to the Assessing Officer a declaration in writing that the provision
of Section 10A may not be made applicable to him for any relevant assessment year.
However, for the years, when the benefit of Section 10A is not opted for, the benefit of
deduction under Section 80HHC can be claimed.
Relevant Notifications
Temporary taking out of Computers

As per M.F.(DR) Circular No. 84/2000 (F.No. 305/79/2000-FTT) dt.16.10.2000,

STP units may, temporarily take out of the bonded premises duty free laptop
computers and video projection systems for working upon by authorised
employees provided that the procedure as envisaged in Circular No. 17/98Customs, dated 16.3.1998 is followed. Further, any employee duly authorised by
the STP unit shall be eligible for the above facility irrespective of his/her
qualifications.

For IT and IT enabled services, persons authorised by the software units may
access the facility installed in the STP unit through communication links.

Customs duty exemption for Computers and Peripherals donated by STP units
Vide Notification No. 47/98-Cus.dt. 16.7.1998, STP units are exempted from payment of
duties on donation of imported computers and computer peripherals including printer,
plotter, scanner, monitor, keyboard and storage units after two years of their import and
use to recognised non commercial educational institutions, registered charitable hospitals,
public libraries, public funded research and development establishments, organisations of
the Government of India/State/Union Territory.
The donee shall observe the procedure prescribed by the Assistant Commissioner of the
Customs having jurisdiction, for transport of the said goods from doner to his premises
and such goods shall not be used for commercial purposes and shall bot be sold, disposed
off, gifted, loaned, exchanged or parted with/without permission of the said Assistant
Commissioner within 5 years from the date of the receipt of the said goods to him from the
doner.