With support to scrap 5% IGST on ship imports, Ministry attracts ire of ship builders

MUMBAI: The Ministry of Ports, Shipping and Waterways has sought the backing of the Finance Ministry for scraping the 5 Integrated Goods and Services Tax (IGST) levied on ships imported into the country and registered under the Indian flag to boost local tonnage, a demand that is seen as tricky as it will hurt parallel efforts by the ministry to promote the shipbuilding industry.

The local shipbuilding industry is resisting the demand put forward by the Ministry of Ports, Shipping and Waterways for waiver of IGST on import of ships. “The IGST on imported ships is only to protect domestic ship builders and available deterrent mechanisms to support domestic shipbuilders,” said an executive with a shipyard located on India’s western coast.

“The levy acts as a protective measure, making imported vessels slightly more expensive and thus encouraging the use of domestically built ships,” he said, asking not to be named.

Justifying its demand to exempt ships imported into India and registered under the Indian flag from IGST, the Ministry of Ports, Shipping and Waterways said that it “will help maintain a level playing field with foreign shipping companies who are operating in Indian waters without paying IGST on the value of the ship”.

Source : https://infra.economictimes.indiatimes.com/news/ports-shipping/with-support-to-scrap-5-igst-on-ship-imports-ministry-attracts-ire-of-ship-builders/116350477#:~:text=5%20min%20read-,With%20support%20to%20scrap%205%25%20IGST%20on%20ship%20imports%2C%20Ministry,for%20continuation%20of%20the%20levy