STPI seeks extension of fiscal benefits beyond March 2011

The Software Technology Parks of India (STPI) is seeking extension of fiscal benefits to the IT/ITES industry and data processing units at par with units located in Special Economic Zones (SEZs) from the finance ministry. The tax exemption under STPI scheme ends on March 31, next year.

Speaking to Business Standard, STPI, Director-General, Omkar Rai said, “We have written letter to the Ministry of Finance for extension of fiscal benefits. We have proposed 100 per cent corporate Income tax exemption for first five years and subsequently 50 per cent corporate tax exemption for next 6-10 years. We have also asked the ministry to consider tax exemption on investments for another five years.(i.e. 11-15 years in operation.). Now it is on the ministry to decide.” Earlier, the industry had also requested the government to take a move towards announcing parity of incentives between the STPI and the SEZs. At present, there are 9,000 units registered with 52 STPI centres across India and 80 per cent of them are small and medium enterprises (SMEs). Further 20 per cent of the total IT exports is being contributed by these SMEs units which are operating under STPI scheme.

Last year, the total exports by the STPI registered units was to the tune of Rs 2.05 lakh crore and this year the department expects 5-6 per cent growth. On being asked about the reason, Rai mentioned that majority of exports is restricted to US (about 60 per cent) followed by Europe (20 per cent) and rest of the countries. Sources in the Industry argue that smaller companies would be forced to move to SEZs . This will be a big setback to SMEs located outside the zones whereas big players are going to be benefited .

New office in Mohali
STPI, Mohali is setting up new office in the city with an investment of Rs 40 crore. Spread over 100,000 square feet, the office would have data centre, incubation centre alongwith administrative office.

Highest export orders
Infosys Technologies Ltd, from Chandigarh has logged in the highest exports of Rs 648.12 crore, while Dell International Services (I) Pvt Ltd from Punjab, with export of Rs 96.74 crores won the STPI Awards for the highest exports, here today on the first day of the mega IT conclave, eRevolution 2010. Pradip Mehra, advisor to the city administrator was the chief guest of the evening, who gave away the awards.