Indian shipping companies will now be able to compete with their foreign counterparts in attracting cargo. The finance minister Arun Jaitley has excluded the voyage charter services (transportation of goods by vessel from outside India to the first customs station of landing in India) from the negative list of service tax, the Times of India reports
Earlier, being the negative list, the shipping firms were not eligible for the Cenvat credit or refund of taxes paid in inputs, input services and capital goods.
“As a result, our freight charges were costlier compared to foreign vessels. Now we will be able to compete with them. This was our long-pending demand,” said Anil Devli, CEO, Indian National Shipowners Association (INSA).
The local shipping industry is reeling under sluggish global trade and falling freight rates that have left large number of vessels, mostly bulk carriers, idle.
“Earlier, we had been losing Cenvat credit to the tune of 30-45% of the total credit availed per annum. Now with this amendment, we can avail full Cenvat credit on the input goods and services. This will make us competitive vis a vis foreign owners,” said Anoop Sharma, managing director, Essar Shipping Ltd.
Source: Times of India
