At present, the following indirect tax incentives are available to the shipbuilding industry.

a) Exemption from basic customs duty and additional duty of customs (CVD) on all raw material and parts for manufacturing of ships/vessels/tugs and pusher craft etc, subject to the condition that such manufacturing takes place in a custom bounded warehouse under the provisions of Section 65 of the Customs Act, 1962.

b) Exemption from central excise duty on steel procured domestically for manufacturing of ships/vessels/tugs and pusher craft etc in a custom bounded warehouse under the provisions of Section 65 of the Customs Act, 1962.
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