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Tax Incentives for the Maritime Sector

News and Press Release - Dated:- 14-3-2016 - Press Information Bureau Government of India Ministry of Shipping 14-March-2016 12:42 IST The Government of India has proposed the following tax incentives in the Budget 2016-17 for strengthening and promoting the Indian maritime sector (i) Exclusion of services of transportation of import cargo by ships on voyage charter from Negative List. Freight charged by shipping companies for import of goods into India has been excluded from the Negative List a .....

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export and CENVAT credit was also not available for export of goods, which made the service costlier for Indian flag ships.It has now been proposed that the services provided by Indian shipping lines by way of transportation of goods by a vessel to outside India shall be zero rated with effect from March 1, 2016 along with the availability of CENVAT credit for inputs used in providing the service. This will reduce transportation cost and put India at par with the major progressive maritime juris .....

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the service in case the benefit of abatement is availed, the shipping companies were not able to provide services to the customers at lower costs.In the present budget, the Government has rectified this anomaly and allowed shipping companies to charge service tax at abated rate on freight income and avail CENVAT credit on input services. (iv) Reduction of Central Excise duty on capital goods, raw materials and spares used for repair of ocean going vessels. This would reduce the material cost use .....

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ional/NIL rate of Central Excise and Customs duty for the ship building and ship repair has been considerably streamlined. The new procedure only requires intimation to be sent to the Excise Department instead of their approval for procuring goods at a concessional/NILrate.This would enable the ease of doing business. (vi) Rationalization of Interest rates on delayed payments of all indirect taxes. It is felt that lower interest rates will reduce fiscal burden of maritime sector. 2. Further, in .....

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rds. The Government has on December 9, 2015 approved Financial Assistance Policy for Indian shipyards for ten years commencing from April 1, 2016. Government has also approved that all government departments or agencies including CPSUs have to provide Right of First Refusal to Indian shipyards while procuring or repairing vessels. (iii) Parity between indigenously built ships and imported ships. Government has on November 24, 2015 exempted Customs and Central Excise duty on inputs used in manufa .....

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mpted Customs and Central Excise duty leviable on bunker fuels, namely IFO 180 CST and IFO 380 CST, used in Indian flag vessels carrying a mix of EXIM, empty and domestic containers between two ports in India.This tax incentive will reduce operational costs of coastal transportation and will encourage growth of Indian tonnage as well as promote development of transhipment hub in India. (vi) Boost availability of special vessels in Indian market. In order to promote Coastal Shipping and decongest .....

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. Government has, on August 17, 2015, brought parity in the tax regime of Indian seafarers employed on Indian flag ships vis-à-vis those on foreign flag ships and mandated that the period of stay in India shall be counted as per the entries made in his/her Continuous Discharge Certificate (CDC).This would benefit around 35,000 seafarers presently employed on Indian flag ships. This would not only change the perception of Indian seafarers with regard to serving on Indian ships, but would a .....

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uce detention time of vessels for payment of light dues. (ix) Unhindered Right of First Refusal (RoFR) for Indian flag vessels and Indian dredgers while working on Indian coast. Keeping in view of the Government s policy of strengthening and promoting the Indian shipping and dredging industry in a competitive framework, Government has, on March 26, 2015, extended the ambit of the Right of First Refusal (RoFR) for Indian flag vessels by removing the earlier 10% price band cap with respect to L1 f .....

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