Developers may get to buy back built-up space in STPI

NEW DELHI: The department of industrial policy and promotion (Dipp) is examining a proposal to allow real estate developers to buyback built-up area sold in software technology parks of India (STPI) units and lease out the same to other businesses. As the STPI benefits are expiring in 2010, the government has observed that builders are not expanding in such units rather than carrying out the same business at other special economic zones (SEZs), a senior official in the Dipp told ET.

The issue came up in the last meeting of foreign exchange promotion board (FIPB), when the board took up real estate company Information Technology Park���s request for a clarification whether it could buyback builtup space constructed by ITP itself and lease out the same to other businesses.The company has set up an information technology park under the industrial park policy. The park has a total built-up area of two lakh square metres, out of which, 57,000 sq m space has been sold to various customers in STPI units.

The STPI policy entails exemption from income-tax for IT companies for a period of 10 years for setting up IT units. The tax benefits are expiring in 2010. There are around 6,000 IT units across the country registered under the STPI scheme.

The company has informed the board that as the STPI benefits would expire in a year, most of these units are not expanding and consolidating in SEZs. hence, these units have offered to the company to buyback the built up space sold by the company to them. The company has now sought clearance from the board whether it could buy back the built-up space and lease out to other business units.





The Dipp has now been directed by the FIPB to examine ITP���s proposal in detail, the Dipp official said. The government���s decision on this issue is being watched the industry in general, as many real estate developers have sold spaces in IT parks under the STPI scheme and the scheme ends in 2010.

STPI scheme is a 100% export oriented unit scheme for the development and export of software using data communication links or by physical media or by on-site Consultancy. STPI supports new companies by providing incubation infrastructure with all facilities such as Internet, telephone, fax and power back-up.