To support the sector, she proposed removing the customs duty on components and consumables for vessel manufacturing. Duties on technical documentation and spare parts for warship construction have also been scrapped.
“India’s maritime sector across ship building, repairs and leasing will get a boost from this most exemplary initiative driven by Prime Minister Narendra Modi and spelled out in the budget,” union shipping, ports and waterways minister Sarbananda Sonowal told ET. “This will give a thrust to goals defined under the Maritime India Vision 2047,” he added.
In her budget speech, Sitharaman also highlighted the potential for cruise tourism in India. “To give a fillip to this employment generating industry, I am proposing a simpler tax regime for foreign shipping companies operating domestic cruises in the country,” she said.
The budget sought a presumptive taxation regime for cruise ship operations of overseas entities. It proposed to exempt from tax their income from renting ships to a related firm that operates cruise services in India. The budget makes a lot of provisions for the shipping industry, said TK Ramachandran, secretary at the ministry of ports, shipping and waterways. “We hope it will lead to a great change in the landscape for shipping.”The FM also proposed to introduce a variable capital company structure for financing leasing of aircraft and ships. Officials aware of the move said this will help companies take advantage of the International Financial Services Centres Authority (IFSCA)-GIFT city dispensation.As per Jagannarayan Padmanaban, senior director at Crisil, India-flagged ships account for just 5% of the total overseas cargo carrying requirements of the country. “A need to come out with a focused reform for the sector was very much needed,” he said.
