Ministry of Ports Pushes for IGST Waiver on Imported Ships to Boost Indian Fleet

ENA Sectors 2024-12-16 17:03:26 New Delhi, Dec 16 (KNN) The Ministry of Ports, Shipping, and Waterways has formally requested the Finance Ministry to remove the 5 per cent Integrated Goods and Services Tax (IGST) levied on ships imported into India and registered under the Indian flag. This move is aimed at boosting local tonnage by making it more attractive for Indian fleet owners to register ships in the country. However, this demand has raised concerns within the domestic shipbuilding sector, which views the proposed waiver as a threat to its interests. Indian shipbuilders argue that the IGST serves as a protective measure to make imported ships more expensive and encourage the use of domestically produced vessels. The levy is essential for protecting local shipbuilders, said an executive from a shipyard on Indias western coast, who requested anonymity. Without it, imported ships would likely become cheaper, making domestic ships less competitive. The Ministry of Ports, Shipping, and Waterways, however, argues that removing the IGST would level the playing field for Indian fleet owners, who currently compete with foreign-owned vessels operating in Indian waters. The ministry points out that Indian ships are already disadvantaged, having to compete on price alone without benefiting from any other incentives. One of the key reasons behind the Ministrys request is that the IGST has discouraged the purchase of new ships by Indian owners. Due to the tax, many fleet owners opt for second-hand ships from the global market, which are often imported into India. The Ministry claims that the existing tax regime, which delays input tax credit recovery, hampers the cash flow of fleet owners, making it difficult for them to compete with foreign rivals. On the other hand, local shipbuilders are pushing back against the proposed waiver, emphasising that it would harm the Make in India initiative outlined in the Maritime India Vision 2030. They argue that without the IGST, imported ships would undermine efforts to foster a thriving domestic shipbuilding industry. The Finance Ministry is yet to make a decision, but both sides are keenly awaiting the outcome of discussions that could shape the future of India's maritime industry. (KNN Bureau) 40272 https://knnindia.co.in/news/newsdetails/sectors/ministry-of-ports-pushes-for-igst-waiver-on-imported-ships-to-boost-indian-fleet 2024-12-16 17:03:26 knnindia.co.in Ministry of Ports Pushes for IGST Waiver on Imported Ships to Boost Indian Fleet