Excise duty on ships for breaking – do they manufacture ships just for breaking up?
Today we are carrying, in our guest column, a nostalgic story from the man who notified the Alang ship breaking yard. Do you know ship breaking is excisable? But what is excise duty on ships for breaking up? Nobody manufactures ships for breaking up and the duty on ships is nil as per the tariff. Is it that passenger and cargo ships are charged to nil duty while ships for breaking up are to attract 16% duty? Certainly old ships sold for breaking up cannot suffer excise duty. What then is the mystery?
The whole purpose seems to be to tax imported ships for breaking up. Ships are routinely imported for breaking up and in addition to the basic customs duty they are required to pay an additional customs duty equal to the excise duty, commonly known as CVD. For this purpose ships for breaking up had to figure in the excise tariff and so it did though there was no excise duty collected at all.