GUIDELINES FOR SHIPBUILDING SUBSIDY
The Ministry of Shipping has announced
guidelines for admissibility of shipbuilding subsidy in respect
of vessels built in Central and non-Central Public Sector Shipyards
and Private Sector Shipyards. Under the guidelines Shipbuilding
Subsidy of 30% on domestic order is admissible subject to the
conditions that subsidy will be payable only for Ocean going vessel
as defined in Section 3(41) of Merchant Shipping Act., 1958, having
a minimum of 80 metres in length and the subsidy will be calculated
on the price at which the Indian Shipyard has won a global tender.
Fixation of price for domestic order will be in terms of relevant
foreign currency and payment at each stage will be made in instalments
to the Central and non-Central Public Sector Shipyards at market
determined parity rate of foreign exchange prevailing on the date
of actual payment. Subsidy will be payable on the price at which
the tender was won and will not take into account any subsequent
escalation. In case of Private Sector Shipyards the principle
followed will be the same except that the subsidy will be released
only after delivery of the vessel.
With regard to shipbuilding subsidy
on export order, subsidy of 30% would be admissible on each export
order irrespective of the type and size of the vessel subject
to the conditions that subsidy will be calculated on the price
at which the Indian Shipyard has won the global tender and where
the price of the vessel is negotiated, the reasonableness of price
would be determined by the Director General, Shipping, Mumbai.
The Director General of Shipping, Mumbai has been made the competent
authority to issue the certificate of a price reasonableness in
respect of all the shipyards including private and public sector
shipyards. If the certificate
of price reasonableness is not issued or reason for not issuing
the same is not furnished within a period of 30 working days,
it shall be deemed to have been granted on expiry of the said
period of 30 days and in that eventuality, the price indicated
in the contract shall be treated as reasonable price.
In case the Director General of Shipping
has declined to grant the certificate or the shipyard does not
agree with the price certified to be reasonable, an appeal against
the same with the supporting documents, may be made to the Secretary,
Ministry of Shipping within a period of 30 days from the date
of issue of such a communication by the Director General of Shipping.
An application for seeking the release of shipbuilding subsidy
on achieving the stage of construction in case of both Central
and non-Central Public Sector Shipyards and after delivery of
the vessel in case of Private Sector Shipyards for which subsidy
becomes admissible and due shall be made to the Ministry of Shipping
and the Ministry of Defence in case of Defence Shipyards. Subject
to availability of budget provision and satisfying the conditions
laid down in the subsidy scheme, the administrative Ministry i.e.
the Ministry of Defence in case of Defence Yards and the Ministry
of Shipping in case of Indian Yards shall release the subsidy
to the Shipyard concerned.
