NEW DELHI: The government has decided to do away with imposing customs and excise duties on raw material and parts used in the manufacturing of ships including export container vessels and pusher crafts.
As per the central government’s notification issued on Tuesday, the shipbuilding industry will be exempted from paying customs and central excise duties on all raw material and parts for use in the manufacture of ships/vessels/tugs and pusher crafts etc.
At present, certain ships are exempted from basic customs duty and central excise duty. However, many ships manufactured in export oriented units (EOUs) and cleared to the domestic tariff area (DTA) are not eligible for tax exemption on the procurement of raw material.
“Suitable amendment is being made to the relevant notifications so as to provide that EOUs will be eligible for duty exemption on raw materials/parts consumed in manufacture of such ships/vessels etc. which are cleared to DTA, even if such ships/vessels are exempt from basic customs duty and Central Excise/CV duty,” a Finance Ministry statement said on Thursday.
Now, manufacturers will not need to restrict the shipbuilding activity in a custom bounded warehouse to avail the tax benefits.
