The Indian government has announced a number of indirect tax incentives for the country’s shipbuilding industry in an attempt to boost indigenous vessels program.
These incentives, dated November 24, include exemption from customs and central excise duties on all raw material and parts for use in the manufacture of ships, vessels, tugs and pusher craft.
Such benefits were previously not available for vessels manufactured as export-oriented units (EOUs).
The government has now retracted this rule, as well as the requirement of manufacturing vessels in a custom bounded warehouse.
The indirect tax incentives available to the shipbuilding industry now include exemption from basic customs duty and additional duty of customs (CVD) on all raw material and parts for manufacturing of vessels, subject to the condition that such manufacturing takes place in a custom bounded warehouse; as well as exemption from central excise duty on steel procured domestically for manufacturing of vessels in a custom bounded warehouse.