Circular No. 24 dated 7^th July 1997

I am directed to say that the Board is in receipt of a reference from the Department of Electronics that commercial training on computers installed in the bonded premises of STP units be allowed. The EXIM Policy as also provides (paragraph 9.15 (f)) that software units will be allowed to use the computers system for training purposes (including commercial training) subject to the condition that no computer terminal shall be installed outside the bonded premises for the purpose.

2.      The matter has been examined by the Board. It is noted that activity of imparting commercial training in an STP unit is totally different from permitting manufacture of goods for domestic market by an EOU. It has also been noted that STP units are set up with the primary intention of developing and exporting software but if they in addition use the equipment for training of the personnel of the units there should be no objection. The same principle can equally be applied to training of persons other than employees of the concerned unit.

3.      In view of the aforesaid facts, I am directed to clarify that the STP units should be permitted by the Customs authorities in terms of the relevant provisions even if later on when units have completed their Export Obligations, the equipment's are used for training including commercial training purpose, provided the training is conducted within the bonded premises.

4.      The Board's instruction contained in Circular No. 37/ 95 dated 18th April 1995 issued from F.No. 305/ 7/ 95- FTT deemed to have been modified accordingly.