Nearly a 1,000 export units have withdrawn their registrations from Software Technology Parks of India (STPI) following removal of income-tax exemptions after 2012, according to Omkar Rai, Director General, STPI.
The tax benefit was a big incentive to most of these small and medium-size companies with software exports of about Rs 5-10 crore a year. It was not beneficial for them to continue with STPI once the exemption was withdrawn, he told newspersons on the sidelines of CII Connect 2013, the annual ICT event of Tamil Nadu. Some of the units have moved to the Special Economic Zones, which now offer better incentives. However, this trend has changed and “we will see more units coming back to us,” following the announcement of the National Policy on Information Technology.
Rai said nearly 200 new units have registered with STPI in the last two years and the number will increase.
STPI continues to provide single window clearance and is the licensing authority for exports. STPI has around 4,000 export units, he said.
Despite the withdrawal of tax exemption, total software exports from STPI units will grow at 5 per cent every year. In dollar terms, the growth will be around 10 per cent. Exports were Rs 2.26 lakh crore in 2012-13, he said.
Addressing the Connect 2013, Rai said the SMEs are finding it difficult to survive in the absence of fiscal incentives. The new IT policy will encourage product development, innovation and create intellectual property, he said.
The thrust areas of the policy include increasing revenues of IT and information technology-enabled services industry from $100 billion currently to $300 billion by 2020 and expand exports from $69 billion currently to $200 billion by 2020, he said.