Govt announces more tax incentives for shipbuilding industry
New Delhi, Nov 26: To promote domestic shipbuilding industry, the government has decided to provide slew of tax incentives including exemption from excise and custom duties on all raw materials and parts used for making vessels.
"Exemption from customs and central excise duties on all raw material and parts for use in the manufacture of ships/ vessels/tugs and pusher crafts etc," an official statement said.
Besides, raw material used for manufacturing of ships or vessels in Export Oriented Units (EOUs) will be exempt from basic customs duty and excise duty.
"Suitable amendment is being made to the relevant notifications so as to provide that EOUs becomes eligible for duty exemption on raw materials or parts consumed in manufacture of such ships or vessels etc which are cleared to DTA, even if such ships or vessels are exempt from basic customs duty and central excise," it said.
Simultaneously, the requirement of manufacturing of ships or vessels and pusher craft in a custom bounded 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, it said.
These notifications were issued on November 24. Currently, exemption from excise duty only on steel procured domestically for manufacturing in a custom bounded warehouse was available.
Besides, exemption from basic customs duty and additional duty of customs was available on all raw material and parts subject to the condition that manufacturing takes place in a custom bounded warehouse.