No Customs or Excise Duty on Raw Material used in ship manufacturing: Govt
The requirement of manufacturing of ships in a custom bounded warehouse under the provisions of Section 65 of the Customs Act, 1962The 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. The requirement of manufacturing of ships 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. “Instead, these exemptions will now be subject to actual user conditions,” the statement said. As per the Customs Act, 1962, the shipbuilding industry also gets exemption from central excise duty on steel procured domestically for manufacturing of ships in a custom bounded warehouse.
November 26, 2015 |1:38pm IST
to success.