NEW DELHI: As per a statement from the apex indirect tax policymaking body, Central Board of Excise and Customs (CBEC), exemption from customs and central excise duties will now be available on all raw material and parts used in manufacturing of ships, vessels, tugs and pusher crafts.
An official press release said notifications 44/2015-Central Excise, 45/2015-Central Excise, 54/2015-Customs and 55/2015-Customs, all dated 24.11.2015, had been issued in this regard.
The Finance Ministry of India will exempt all raw materials used in manufacturing vessels from customs and all central excise duties, which will decrease the import costs for the shipyards and will make shipbuilding at cheaper base rate.
Exemption from basic customs duty and additional duty of customs (CVD) on all raw material and parts for manufacturing of ships/vessels/tugs and pusher craft etc, subject to the condition that such manufacturing takes place in a custom bounded warehouse under the provisions of Section 65 of the Customs Act, 1962. The government plans to undertake a suitable amendment so as to provide that EOUs will be eligible for duty exemption on raw materials/parts consumed in manufacture of such ships and vessels which are clea-red to DTA, even if such ships are exempt from basic customs duty and Central Excise/CV duty.
Currently, exemption from excise duty only on steel procured domestically for manufacturing in a custom bounded warehouse was available. Instead, these exemptions will now be subject to actual user conditions, the statement added.
