India’s shipbuilding industry will receive indirect tax cuts from the government, which will also extend to vessels bound for export.
The country’s finance ministry has announced it will exempt all raw materials used in manufacturing vessels from customs and all central excise duties, which it is hoped will boost India’s shipbuilding industry.
Previously, these benefits were only available if vessels were built within a customs-bonded warehouse, but this condition is being withdrawn.
“Simultaneously, the requirement of manufacturing of ships/vessels/tugs and pusher craft etc in a custom-bonded warehouse under the provisions of Section 65 of the Customs Act, 1962, for availing the customs and excise duty exemptions has also been done away with,” the finance ministry said in a statement. “Instead, these exemptions will now be subject to actual user conditions.”
Domestically produced steel for manufacturing within a customs-bonded warehouse is still exempt from central excise duty.