How does STPI registration work for software and IT services exporters?

The Software Technology Parks of India (STPI) runs the Software Technology Park (STP) scheme, which lets a software or IT services company operate as an export-oriented unit without being inside a physical park or a Special Economic Zone (SEZ).¹ STPI describes the scheme as 100% export-oriented for the development and export of computer software, including professional services delivered over communication links or physical media.¹

This guide explains what the scheme requires, how registration works, and what changed for STPI when the SOFTEX circulars were superseded in 2026. It is mainly relevant to software companies, IT and IT-enabled services (ITeS) firms, and electronics hardware makers.³

What is the STP scheme?

The STP scheme is one of four export-oriented schemes in Chapter 6 of the Foreign Trade Policy (FTP) 2023, alongside Export Oriented Units (EOUs), Electronics Hardware Technology Parks (EHTPs) and Bio-Technology Parks.² Units under these schemes undertake to export their entire production of goods and services, except permitted sales in the Domestic Tariff Area (DTA), meaning the rest of India.²

• Approvals: for STP and EHTP units, approvals that a Development Commissioner gives to EOUs are given instead by an officer designated by the Ministry of Electronics and Information Technology.²
• Committee: an Inter-Ministerial Standing Committee replaces the Board of Approval.²
• Letter of Permission: on approval, the unit receives a Letter of Permission (LoP), which is treated as an authorisation, and executes a Legal Undertaking (LUT).²
• Trading units: not covered.²

What does an STP unit get under the scheme?

STPI lists these features of the scheme on its STP page:¹

• Approvals: single-window clearance.
• Imports: duty-free import of hardware and software, including second-hand capital goods.
• Domestic sales: permission to sell in the DTA and to re-export capital goods.
• GST: refund on capital goods bought from the DTA.
• Foreign equity: 100% foreign equity, and repatriation of capital, royalties and dividends after applicable income taxes.¹
• Location: the unit can be set up anywhere in India.

Under the FTP, an STP unit may import or procure from the DTA the goods, including capital goods, it needs for its approved activity, subject to conditions such as the actual user condition.² STPI says projects under ₹100 million with Indian investment can be cleared by the jurisdictional STPI authority.¹

Note: STPI's STP scheme page states it was last updated on 23 January 2021.¹ Older material about the scheme often mentions income tax holidays and the SOFTEX form; neither should be assumed to apply today. Confirm current benefits with your STPI centre.

Which businesses should register with STPI under the STP scheme?

STPI registration under the STP scheme is open to software development, IT and ITeS companies and electronics hardware makers, and it suits firms that import hardware or software, want a single-window regulator and can stay NFE-positive.¹²³

A firm with a large domestic client base has to watch the 50% DTA limit.² Compare the scheme with an SEZ unit or a regular DTA company with your chartered accountant before applying.

How do you register a unit with STPI?

You register a unit with STPI by applying online through the STPI portal at stpionline.stpi.in, then submitting a signed hard copy with supporting documents.³

1. Apply online: apply through the portal and upload the listed documents.³
2. Submit the signed hard copy: with supporting documents.³
3. Present to the STPI Director: after scrutiny, STPI Bengaluru calls the company for a presentation with its Director.³
4. Receive the Letter of Permission: if satisfied, STPI registers the unit and issues an LoP.³
5. Pay advance charges and execute the Legal Undertaking: ₹24,000 plus GST is payable as advance service charges before executing the Legal Undertaking.³

If you do not have an IEC yet, see how to apply for an IEC.

What documents and charges apply to STPI registration?

STPI registration needs company, project and client documents, and STPI Bengaluru charges a ₹2,950 application fee plus annual service charges linked to export turnover.³

STPI Bengaluru's published procedure lists these uploads:³

• Constitution: Memorandum and Articles of Association.
• Board resolution: to set up the STP or EHTP unit and naming authorised signatories.
• Promoters: promoter or director profile.
• Registrations: Importer Exporter Code (IEC) and PAN.
• Project: project report or company profile.
• Premises: lease or rental agreement and floor plan.
• Financials: cost of project and means of finance, projected profit and loss, balance sheet and cash flow, and export workings (as per transfer pricing guidelines for subsidiaries).
• Contracts and bank: master or service agreements with clients or the parent company, and a bank certificate showing the AD code.
• Investment plan: a letter stating planned investment in plant and machinery for the next 5 years.³

The application processing fee of ₹2,950 is ₹2,500 plus 18% GST.³ STP units then pay annual service charges based on export value declared in the Annual Performance Report.³ The published annual slabs, exclusive of GST, include:³

These are STPI Bengaluru's figures. Other STPI centres may publish different amounts, so check with the centre that has jurisdiction over your premises.³

What happens if an STP unit does not meet its obligations?

An STP unit that fails to achieve positive net foreign exchange (NFE), or breaches the LoP or LUT, is liable to penal action under the Foreign Trade (Development and Regulation) Act, 1992 and cancellation of the LoP.²

• NFE: the unit must be a positive NFE earner, calculated cumulatively in blocks of five years from the start of operations; the block can be extended in limited cases.²
• Domestic sales: for services, including software units, DTA sales are allowed up to 50% of the FOB value of exports and/or 50% of foreign exchange earned, where payment for the services is received in foreign exchange.²

Track NFE each year so that the five-year block does not end in a shortfall.

What is STPI's role in export documentation from October 2026?

From 1 October 2026, STPI is a specified authority for the Export Declaration Form (EDF) on software exported from the DTA, under the FEMA (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations).⁴

The 2026 Regulations require every service exporter to furnish an EDF to the specified authority.⁴ Where the specified authority is not an Authorised Dealer, it forwards the authenticated EDF to the exporter's bank.⁴ SOFTEX, the form STPI previously certified for software exports, was replaced by the EDF, and RBI Circular No. 20 superseded the SOFTEX circulars from 1 October 2026.⁴⁵ See SOFTEX replaced by EDF and EDF for service exporters.

What are the common mistakes with STPI registration?

The most common mistake is relying on older material about income tax holidays or SOFTEX, since STPI's own scheme page was last updated on 23 January 2021.¹

• Assuming a minimum investment: the ₹1 crore EOU plant and machinery minimum does not apply to STP units under paragraph 6.06.²
• Ignoring the DTA limit: domestic sales are capped at 50% of the FOB value of exports and/or 50% of foreign exchange earned.²
• Using another centre's fees: the charges above are STPI Bengaluru's.³
• Registering only to file the EDF: software exporters in the DTA can file the EDF with an AD bank.⁴

Confirm current benefits and charges with the STPI centre that has jurisdiction over your premises.