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Shipping firms welcome budget 2013-14

Shipping firms welcome budget 2013-14

Domestic shipping companies expressed satisfaction with the Union Budget 2013-14 as it announced some tax sops for shipbuilders and import of ships.

The budget removed the countervailing duty (CVD) on imported ships since most Indian shipping companies get their vessels manufactured outside the country.

Further, the budget also removed the excise duty on the domestic shipbuilding industry in order to help the domestic shipbuilders.

Both the measures are a positive for the shipping sector. On one hand, domestic shipbuilders will benefit as the government has removed the excise duty. On the other hand, they have also removed the CVD on import of vessels from outside the country, which is a huge poitive, said BK Mandal, Chairman, Shipping Corporation of India.

But some experts feel that the removal of the excise duty will have a trickle down effect on the cost of vessels built in India, and is not enough to attract large orders.

According to industry experts, domestic shipbuilders were paying 6 percent as excise duty to the government and shipping companies were paying close to 6.1 percent as CVD to bring in vessels from outside the country. The removal of CVD will reduce the cost of vessels that are imported.

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