Quick Summary
The Ministry of Ports, Shipping and Waterways has sought a reduction in duties and taxes on domestically-flagged vessels. The proposal aims to bring tax parity between Indian-registered ships and their foreign counterparts, which currently enjoy a cost advantage due to lighter tax burdens. A senior
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FAQ :
The main goal is to achieve tax parity between Indian-registered ships and their foreign counterparts by reducing duties and taxes on domestically-flagged vessels.
Foreign-flagged ships have a cost advantage because they are not subject to the same domestic levies, such as IGST on imports and taxes on services between Indian ports, which Indian vessels must pay.
India's shipping fleet comprises 1,552 domestic-flagged vessels, including Indian-controlled tonnage.
Indian ships face cost pressures from domestic levies like IGST on imports, blocked input tax credits under GST, and taxes on services rendered between Indian ports.
A ₹1,624 crore subsidy scheme introduced in FY 2021-22 has not delivered the expected boost, with the share of imports carried by Indian ships stagnating around 8%.
The tax and business ecosystem offered by GIFT City in Gujarat for ship ownership is being considered as a reference for broader industry-wide reforms.
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