India: Government announces indirect tax exemptions for shipbuilding

The government on Thursday announced indirect tax incentives for India’s stressed shipbuilding industry in a bid to give a push to the sector.

The finance ministry notified it had exempted all raw material parts used in the manufacture of ships, vessels, tugs and pusher crafts and the like from customs and central excise duties.

The export oriented units (EOUs) too will be eligible for this incentive.

These benefits were earlier available if the manufacture was in a customs bonded warehouse, which condition is being withdrawn, the statement said.

“Instead, these exemptions will now be subject to actual user conditions,” the ministry said.

The shipping ministry told parliament late last year that it had asked the Reserve Bank of India and the finance ministry to relax some of the financial regulations on banks engaged in corporate debt restructuring (CDR) of shipyards.

Shipping is highly capital intensive and depends largely on the debt market to finance its acquisitions.
Source: Business Standard