Pillar 1 Scheme draft guidelines- Shipbuilding Financial Assistance Scheme(SBFAS) and National Shipbuilding Mission (NSbM)- Inviting comments of stakeholders

File No. SY-13017/2/2014-SBR Government of India Ministry of Ports, Shipping and Waterways (SBR Section) 3rd Floor, PTI building, 1 – Parliament Street, New Delhi – 110001 Dated: November 4th, 2025 To, 1. CMD, Cochin Shipyard Limited (CSL) 2. CMD, Shipping Corporation of India (SCI) 3. CMD, Hindustan Shipyard Limited 4. CMD, Mazagon Dock Shipbuilder Limited 5. CMD, Goa Shipyard Limited 6. CMD, Garden Reach Shipbuilder and Engineers Limited (GRSE) 7. CMD, Swan Defence and Heavy Engineering 8. CMD, L&T Shipbuilding 9. CMD, Shoft Shipyard pvt. Ltd. 10. CMD, Chowgule and Company Pvt. Ltd. 11. CMD, Titagarh Wagon Limited 12. CMD, Chowgule Global 13. Head, ISTC 14. Directorate General of Shipping 15. Advisor, Shipyards Association of India (SAI) 16. CEO & MD, Indian Shipbuilders Association of India (ISBA) 17. CEO, Indian National Shipowenrs Association (INSA) 18. VC & CEO, Gujarat Maritime Board (GMB) 19. New India Assurance (NIA) 20. Export Credit Guarantee Corporation of India (ECGC) 21. Sagarmala Finance Corporation Limited (SMFCL) 22. Indian Register of Shipping (IRS) 23. Indian Maritime University (IMU) 24. Centre of Excellence in Maritime and Shipbuilding (CEMS) 25. Ship Recycling Industries Association (SRIA) 26. International Shipyards (HD KSOE, Hanwha Ocean, Imabari Shipyards, CMA CGM, AP Mollar Maersk, MSC, Damen Shipyards, Royal HSC, DP World, NYK Line Japan) 27. Container Shipping Lines Association (CSLA) Subject: Draft Guidelines for P1 i.e., Shipbuilding Financial Assistance Scheme & National Shipbuilding Mission (NSbM) – reg. Sir, The undersigned is directed to say that Union Cabinet, in its meeting held on 24.09.2025, approved the Shipbuilding Financial Assistance Scheme (SBFAS) and National Shipbuilding Mission (NSbM) of this Ministry to promote shipbuilding in India.2. In this regard, it is stated the draft guidelines for the above scheme have been prepared in consultation with various stakeholders. A copy of draft guidelines is submitted for perusal. NIC team is requested, the same have been also on the Ministry website/portal. 3. It is requested that your opinion / comments on draft guir be sent to SBR Division in the attached proforma latest by 13th November, 2025 on the following mail - js-shipping@gov.in, js-ports@nic.in, dirl-psw@gov.in and -psw@gov.in. 4. DG Shipping is requested to upload the same on their portal and inputs/ comments/ suggestion from public/stakeholders. 5. Your Co-operation and early reply will be highly appreciated. Yours faithfully, (*r (Pranav Mittal) to the Golt. of India Tet: 0l l -233 1 1659 -psw@gov.inFormat for seeking comments on Guidelines for adopting Shipbuilding Financial Assistance Scheme (SBFAS) and National Shipbuilding Mission (NSbM) Organization/Agency Name : Address with Contact details: Type of Agency (GovVPrivate/PSU/lndividual/othe0 : Para wise remarks on the draft: Para No. sl. ol Existing text in the draft Proposed Remarks No. the Draft guidelines changes Other Remarks (lf any): E-mail this format to js-shipping@gov.in, js-ports@nic.in, dirl - psw@gov. in and usshipping2-psw@gov. in.Committee Report on formulation of Draft Guidelines for Ship Building Financial Assistance Scheme (SBFAS)INDEX Sr. No. Page Number 1 Background 3-6 2 Minutes of Stakeholder meeting dated 7-12 10.10.2025 at MoPSW (Physical/Online) – Annexure I 3 Minutes of meeting- core committee 13-20 along with other stakeholders- dated 14.10.2025 (Online) – Annexure II 4 Minutes of meeting – core committee 21-30 along with other stakeholders- dated 17.10.2025 (Physical/Online) – Annexure III 5 Minutes of meeting - core-committee- 30-39 dated 30.10.2025 (forenoon) (Online) – Annexure IV 6 Minutes of core-committee meeting with 40-66 other stakeholder dated 30.10.2025 (afternoon) (Physical/virtual) – Annexure V 7 Summary of all stakeholder suggestions 67-91 and action taken – Annexure VI 8 Draft SBFAS Guidelines - Annexure VII 92-1651. Background In pursuance of the Office Memorandum No. SY-13017/III/2025-SBR dated 9th October 2025 issued by the Ministry of Ports, Shipping and Waterways (MoPSW), the Directorate General of Shipping (DGS) was entrusted with the task of constituting three committees for formulation of guidelines under the Shipbuilding Development Scheme (SBDS) and the Shipbuilding Financial Assistance Scheme (SBFAS). Accordingly, three committees were constituted: 1. Committee-I – For framing guidelines on the Shipbuilding Financial Assistance Scheme (SBFAS). 2. Committee-II – For framing guidelines on Capacity and Capability Building of Greenfield Shipbuilding Clusters and Brownfield Shipyard Expansion Projects. 3. Committee-III – For formulating Credit Risk Coverage Guidelines for Shipbuilding Projects. This report pertains to the work carried out by Committee-I, constituted to prepare draft guidelines for Shipbuilding Financial Assistance Scheme (SBFAS) 2. Objective of the Committee The Committee was established to:  Operationalize the ₹24,736 crore corpus allocated under Shipbuilding Financial Assistance Scheme.  Develop the institutional framework for release of financial assistance to the Shipyards.  Ensure alignment with the Cabinet-approved framework for the Shipbuilding Financial Assistance Scheme (SBFAS). The guidelines aim to provide financial assistance to Indian Shipyards to offset the cost disadvantages of Indian shipyards viz-a-viz foreign shipyards. 3. Constitution of the Committee As per MoPSW’s order, the Directorate General of Shipping (DGS) constituted Committee-I with representation from:  MoPSW (Director–SBR)  Directorate General of Shipping (DGS)  Shipyard Association of India (SAI)  Indian Shipbuilders Association (ISBA)  Indian Register of Shipping (IRS)  Gujarat Maritime Board (GMB) Shipping Corporation of India (SCI)  Ship Recycling Industries Association (SRIA)  Cochin Shipyard Limited (CSL)  Indian National Shipowners Association (INSA)  ICC Shipowners Association (ICCSA) Director (SBR), MoPSW served as the Member from the Ministry, and an officer from DGS, Shri Ankur Anal, Jr. Ship Surveyor-cum-Asst. Director General (Tech), acted as the Member Convener of the Committee. 4. Meetings Conducted with Stakeholders Date Type Venue Participants MoPSW, DGS, SAI, ISBA,CSL Physical/Hybrid IRS, GMB, SCI, Stakeholder INSA, ICCSA, 10.10.2025 meeting MoPSW SRIA, GRSE, convened by MDL, L&T and MoPSW other industry participants. MoPSW, DGS, SAI, ISBA,CSL Online IRS, GMB, SCI, Stakeholder 14.10.2025 Virtual INSA, ICCSA, Meeting with Core SRIA, GRSE, committee MDL, L&T and other shipyards. DGS, GMB, Gujarat Maritime Physical/Hybrid regional Board Office, Stakeholder shipyards (L&T, 17.10.2025 GIFT City, Meeting with Core ABG, Chowgule, Ahmedabad committee Mandovi), cluster (Hybrid) associations MoPSW, DGS, SAI, ISBA, CSL Core Committee 30.10.2025(Forenoon) Virtual IRS, GMB, SCI, (Internal Review) INSA, ICCSA, SRIA Directorate MoPSW, DGS, 30.10.2025 Physical/Hybrid General of SAI, ISBA, CSL (Afternoon) Stakeholder Shipping (Hybrid) IRS, GMB, SCI,Meeting with Core INSA, ICCSA, committee SRIA and other shipyards. 5.Institutional Framework  Nodal Body: National Shipbuilding Mission (NSbM) – Apex oversight body.  Implementing Agency: Directorate General of Shipping (DGS)  Corpus Allocation: ₹24,736 crore including ₹4001 crore towards shipbreaking credit note. 6. Key Deliberations 6.1.1 The detailed list of deliberated items and inputs from stakeholders on the Shipbuilding financial assistance scheme guidelines are attached as Annexures I to Annexure V 6.1.2 The Minutes of meetings for the three core committee meetings along with industry stakeholders and one only core-committee meeting is attached. 7. Items to be Finalized with NSbM The following aspects require policy-level finalization by the National Shipbuilding Mission (NSbM): 1. Effective date for applicability of Guidelines for Shipbuilding Financial Assistance Scheme. 8. Annexures  Annexure I: Minutes of Meetings dated 10.10.2025  Annexure II: Minutes of meeting dated 14.10.2025  Annexure III: Minutes of meeting dated 17.10.2025  Annexure IV: Minutes of meeting dated 30.10.2025 (forenoon)  Annexure V: Minutes of meeting dated 30.10.2025 (Afternoon)  Annexure VI: Summary of all stakeholder suggestions and action taken –  Annexure VII: Draft SBFAS guidelines Submitted by (Ankur Anal) Jr. Ship Surveyor-cum-Asst. Director General (Tech) Member Convener – Committee on Shipbuilding Financial Assistance SchemeDirectorate General of Shipping, Mumbai To: The Director General of Shipping For onward submission to Ministry of Ports, Shipping and Waterways (MoPSW) Government of IndiaAnnexure I Minutes of Meeting Stakeholder Consultation on Shipbuilding Financial Assistance Scheme (SBFAS) Guidelines Date: 10th October 2025 Time: 10:00 Hrs – 18:00 Hrs Venue: Online Discussion Convened by: Ministry of Ports, Shipping & Waterways Participants: Representatives from MoPSW, DGS, INSA, CSL, IRS, MSC, SCI and other shipyards. Key Discussion Points and Actions Taken During the consultation held on 10th October 2025, several key issues and clarifications were discussed under the Shipbuilding Financial Assistance Scheme (SBFAS). 1. Shri. KK Dhawan (IRS) requested that the new scheme guidelines be prepared in the same format as the SBFAP 1.0 guidelines, as the industry is already comfortable with that format and there will be limited ambiguity. Action Taken: DGS informed that the new guidelines have been prepared on the same skeleton as that of the previous guidelines. 2. Shri. Saket Kandoi (Titagarh Rail Systems) sought clarity on whether auxiliary vessels (non-combat) of the Navy will be included under the scheme. Action Taken: DGS Clarified that the vessels built for defence purposes or for use by Navy or Coast Guard have been excluded. However, vessels like tugs, tankers, cargo ships and passenger ships that are not fitted with any weaponry, contracted for construction by foreign defence entities are eligible. 3. Shri. Anil Devli (INSA) asked whether, if a shipowner scraps a vessel after placing a new ship order, the scrap credit note will still be counted towards eligibility under SbFAS. Further requested clarification on the term “Fair Scrap Value” and the methodology for its evaluation. Also, suggested that brokers or independent evaluators should be selected from an empanelled list of evaluators with defined criteria, and that there should be a periodic review of the list.Action Taken: DGS clarified that, the credit note can be tagged with a new build anytime before the last payment is received by the ship owner. For the “Fair Scrap Value” and the methodology for its evaluation was explained. Checklist for assessment of international valuators has been prepared and added as an Annexure to the draft guidelines. 4. Anil Devli (INSA) suggested that the Certificate of Recycling (CoR) issuance process should be based on clear, transparent, and standardized parameters to avoid operational hurdles or delays. The process should be digitized and automated through online portals. Action Taken: This issue will be separately discussed with State Maritime Boards to ensure a smooth and transparent process. 5. Anil Devli (INSA) mentioned that in many cases, shipowners directly contract with suppliers and procure components rather than the shipyard doing so. Suggested the possibility of allowing shipowners to seek SbFAS benefits as well, depending on the nature of the contract between the shipowner and the shipyard. Action Taken: DGS clarified that, as per the Cabinet note, financial assistance is to be paid directly to the shipyard only not the shipowner. 6. Nikhil Raj (SCI) requested clarity on the commencement of SbFAS and the start date of SbFAS 2.0. Action Taken: DGS clarified that the commencement date of SbFAS is yet to be finalized. 7. Rajeev Nayyer (Swan) raised concern regarding the Domestic Content Requirement (DCR) for specialized vessels where equipment costs are high, making it difficult to achieve the 40% threshold. Requested clarification on whether the percentage is linearly proportional or exponential, and on how the subsidy will be calculated on a pro-rata basis. Action Taken: The calculation is based on pro rata basis with 30% DC = 75% FA, >=40% DC = 100% FA, <30% DC = 0% FA, >30% DC<40% DC - Linear variation. Calculation methodology has been detailed in Schedule V of the draft guidelines.8. Pandurang Dhond (Chowgule & Co.) suggested defining eligibility in the case of Self-Build by shipyards. If shipyards build vessels without a confirmed buyer or for captive use, they should still be eligible to claim the subsidy. Action Taken: In the current scheme, a shipbuilding contract is mandatory. Thus, shipyards need to sign a shipbuilding contract to avail financial assistance. 9. Cdr. Vikramjeet (HSL) requested clarity on the engagement of Indian valuers and valuation standards, mentioning that the industry supports the engagement of Indian valuers. Action Taken: DGS clarified that the Indian valuators are already added to the list. 10. Mitesh Agarwal (Swan) suggested eligibility for vessel conversion projects, requesting that the conversion of vessels into specialized vessels be made eligible for SbFAS, as such projects can cost over ₹100 crores. Currently, this category is not covered. He also raised a point on overlap with other schemes or top-up schemes by State Governments, seeking clarification on the matter. Action Taken: DGS clarified that, as per the Cabinet note, financial assistance is to be paid for new builds only. 11. Kalpesh Vithlani (GMB) pointed out that under SBFAP 1, no top-up or support was allowed under any Central or State schemes alongside SBFAS, and sought clarity on whether the same restriction will apply to SbFAS 2.0. The industry also requested reconsideration of this restriction, such as permitting state-level top-up subsidies. Action Taken: DGS clarified that States can support shipyards over and above SBFAS support provided by the Government of India, provided it meets the exclusion criteria as mentioned in the Cl. 5(d) of the draft SBAS Guidelines.Sl. Key Discussion Point Raised By Action to be Taken / Decision No. Requested that the new scheme guidelines be prepared in the same It was informed that the new format as the SBFAP KK Dhawan guidelines have been prepared on 1 1.0 guidelines as the (IRS) the same skeleton as that of the industry is already previous guidelines. comfortable with the same and there will be limited ambiguity. Vessels built for defence purposes or for use by Navy or Coast Guard Clarity on whether Saket have been excluded. However, auxiliary vessels (non- Kandoi vessels like tugs, tankers, cargo 2 combat) of the Navy will (Titagarh ships and passenger ships that are be included under the Rail not fitted with any weaponry, scheme. Systems) contracted for construction by foreign defence entities are eligible. If a shipowner scraps a vessel after placing a Yes, credit note can be tagged with new ship order, will the Anil Devli a new build anytime before the last 3 scrap credit note still be (INSA) payment is received by the ship counted towards owner eligibility under SbFAS. The term “Fair Scrap Value” and the Anil Devli 4 Explained in the guidelines methodology for its (INSA) evaluation. Brokers / independent evaluators: An Checklist for assessment of empanelled list of Anil Devli international valuators has been 5 evaluators with defined (INSA) prepared for adding new valuators criteria should be there to this list. and periodic review should be carried out. Certificate of Recycling (CoR): issuance process should be based on clear, transparent, and This issue will be separately standardized Anil Devli discussed with State Maritime 6 parameters to avoid (INSA) Boards to ensure a smooth and operational hurdles or transparent process. delays. The process should be digitized and automated through online portals.Sl. Key Discussion Point Raised By Action to be Taken / Decision No. In many cases, shipowners directly contract with suppliers and procure components rather than the shipyard doing so. As per the Cabinet note, financial Anil Devli 7 Possibility for allowing assistance is to be paid directly to (INSA) shipowners to seek the shipyard only not the shipowner SbFAS benefits too, depending on the nature of the contract between the shipowner and the shipyard. Commencement of Nikhil Raj 8 SbFAS and the start Yet to be finalized. (SCI) date of SbFAS 2.0. Domestic Content Requirement (DCR): For specialized vessels, where equipment costs are high, it may not be The calculation is based on pro rata feasible to achieve the Rajeev basis with 30% DC = 75% FA, 9 40% threshold. Nayyer >=40% DC = 100% FA, <30% DC = Clarification required on (Swan) 0% FA, >30% DC<40% DC - Linear whether the % is variation linearly proportional or exponential and on calculation of subsidy on a pro-rata basis. Eligibility in case of Self-Build by Shipyards: If shipyards build Pandurang vessels without a Dhond In the current scheme, a 10 confirmed buyer or for (Chowgule shipbuilding contract is mandatory. captive use, they should & Co.) be able to claim subsidy. Valuation: Clarity on engagement of Indian Cdr. valuers and valuation Indian valuators are already added 11 Vikramjeet standards. Industry to the list. (HSL) supports engagement of Indian valuers. Eligibility for Vessel Mitesh As per the Cabinet note, financial 12 Conversion Projects: Agarwal assistance is to be paid for new Request to consider (Swan) builds onlySl. Key Discussion Point Raised By Action to be Taken / Decision No. making conversion of vessels into specialized vessels eligible for SbFAS as these projects’ cost can run into 100+ crores. Currently, this is not covered. Overlap with other schemes / top-up schemes by State Governments also raised. Under SBFAP 1, no top-up or support is allowed under any Central/State schemes States can support shipyards over alongside SBFAS. and above SBFAS support provided Kalpesh Clarity sought on by the Government of India, 13 Vithlani whether this will also provided it meets the exclusion (GMB) apply to SbFAS 2.0. criteria as mentioned in the Cl. 5(d) Industry seeks of the draft SBAS Guidelines. reconsideration (e.g., state-level top-up subsidies).Annexure II Stakeholder Consultation on ShipBuilding Financial Assistance Scheme Background : As part of the implementation of the Shipbuilding Financial Assistance Scheme (SBFAS), the Directorate General of Shipping (DG Shipping), under the Ministry of Ports, Shipping and Waterways (MoPSW), convened a series of stakeholder consultations in October 2025 to deliberate on the draft guidelines. Minutes of Meeting Stakeholder Consultation on Shipbuilding Financial Assistance Scheme (SBFAS) Guidelines Date: 14th October 2025 Time: 16:00 Hrs – 18:00 Hrs Venue: Online Consultation Convened by: Directorate General of Shipping (DG Shipping), Ministry of Ports, Shipping & Waterways Participants: DG Shipping  Shri Pradeep Sudhakaran, Chief Ship Surveyor-cum-Joint DG (Tech.)  Shri Nebu Oommen, Dy. Chief Ship Surveyor-cum- Senior Deputy Director General (Tech.), DG Shipping  Shri Ravi Kumar, Ship Surveyor-cum- Deputy Director General (Tech.), DG Shipping  Shri Ankur Anal – Junior Ship Surveyor-cum-Assistant Director General (Tech.), DG Shipping Core Committee Members  Vipul Sinhgal, Director (SBR), Ministry of Ports, Shipping and Waterways (MoPSW)  Ravi Kumar, Ship Surveyor-cum-Deputy Director General (Tech.), Directorate General of Shipping (DGS)  Ankur Anal, Junior Ship Surveyor-cum-Assistant Director General (Tech.), Directorate General of Shipping (DGS)  Shrikant Itagi, CCPL, Shipyards Association of India  Prantik Sen, Hon. Secretary, Indian Shipbuilders Association (ISBA)  K.K. Dhawan, Senior Vice President, Indian Register of Shipping (IRS)  Kalpesh Vithlani, GM, Gujarat Maritime Board (GMB)  Nikhil Raj, Deputy General Manager i/c (SB&S), Shipping Corporation of India (SCI)  Haresh Parmar, Hon. Secretary, Ship Recycling Industries Association (SRIA)  Nagesh K. Moorthy, General Manager (Business Development), Cochin Shipyard Limited (CSL) Anil Devli, Chief Executive Officer, Indian National Shipowners Association (INSA)  Rakesh Singh, President, ICC Shipping Association (ICCSA) Industry Participants Representatives from GRSE, CSL, MDL, GSL, L&T, IRS, San Marine, Chowgule Shipyard, Konkan Barge Builders, and other shipyards Key Discussion Points and Actions to be Taken 1. Opening Remarks and Overview of the Scheme Key Discussion Points:  Shri Ankur Anal welcomed all participants and introduced the consultation as part of the process for finalizing the Shipbuilding Financial Assistance Scheme (SBFAS) guidelines following Cabinet approval on 24th September 2025.  Shri Pradeep highlighted that the SBFAS is an extension of the earlier SBFAP (2016–2026), with an overall outlay of ₹24,000 crore (including ₹4,000 crore for Ship Recycling Credit Notes).  The scheme extends assistance till 2036 and incorporates ship recycling, shipbuilding capacity enhancement, and insurance mechanisms under one umbrella. 2. Presentation on Draft Guidelines Key Discussion Points:  Shri Ankur Anal presented the salient features of the draft guidelines: o Introduction of three-stage payment structure (Launching, Delivery, and Post-Delivery). o Mandatory domestic content requirement (minimum 30%, preferably 40%). o Classification based on vessel cost (₹100 crore threshold). o Expanded specialised vessel categories including hybrid, dual-fuel, and green vessels. o Ship Breaking Credit Notes (SBCN) introduced with 3-year validity and transferability. o Simplified approval process through enhanced powers of the Institutional mechanism, MoPSW. Actions Taken:  Stakeholders to review the full draft document and submit section-wise suggestions with data-backed justifications by 16th October 2025.3. Committee Roles and Review Structure Key Discussion Points:  Shri Ankur Anal explained that six subcommittees were formed to review sections such as eligibility, valuation, domestic content, credit notes, compliance, and subsidy claims.  Shri Anil Devli sought clarity on whether comments could go beyond assigned sections.  Shri Pradeep clarified that all members can provide feedback on any clause in the document. 4. Bank Guarantee and Surety Bonds Key Discussion Points:  Shri S.V. Rambabu (HSL) proposed the use of insurance surety bonds as an alternative to bank guarantees for first-stage payments, citing cost efficiency and precedents from other government departments. Actions Taken:  Basis the current discussions, Bank Guarantee is considered necessary. 5. Transition from SBFAP and Timelines for Large Vessels Key Discussion Points:  Shri Sanjiv Walia (SAI) raised issues faced under SBFAP, including the inability to avail assistance on amended contract prices.  Shri Srinivasa Rao Padala (HSL) emphasized that PSU shipyards require flexible milestone-based timelines for large vessels due to extended design approvals and procurement cycles.  Suggested that project-linked milestones be adopted instead of rigid timelines. Actions Taken:  In-principal approval is granted basis the initial contract price based on which a budget estimate is prepared. Also, valuations carried out by valuers are also based on the initial specifications. Subsequently, if specifications are revised, a fresh set of assessment is required. Hence, considering revised contract price is not feasible.  Timelines as mentioned in the guidelines are applicable to all shipyards. 6. Inclusion of Broader Compliance Standards Key Discussion Points: A representative suggested inclusion of EU Ship Recycling Regulation (EUSRR) compliant yards in addition to Hong Kong Convention (HKC) compliance. Action Taken:  It is noted that all EU(SSR) compliant yards are HKC compliant, hence amendment is not required. 7. Scrap Value and Credit Note Transferability Key Discussion Points:  Concerns were raised by Shri Rakesh Singh regarding determination of scrap value and the challenges in transferring credit notes through intermediaries.  Shri Pradeep clarified that credit notes are transferable or tradable with mandatory registration through the DG Shipping portal. Action Taken:  Detailed procedure for determination of scrap value and transfer of credit notes has been included in the draft guidelines. 8. Eligibility for Government and Defence Projects Key Discussion Points:  Shri Ghoshal (Suryadipta Projects) highlighted the exclusion of vessels built for defence purposes from current eligibility provisions.  Shri Srinivasa Rao Padala (HSL) recommended inclusion of PSU-built auxiliary and dual-purpose defence vessels under the scheme.  He also suggested redefining “delivery date” to align with Ministry of Defence acceptance procedures. Action Taken:  Vessels built for defence purposes or for use by Navy or Coast Guard are excluded. However, vessels like tugs, tankers, cargo ships and passenger ships that are not fitted with any weaponry, contracted for construction by foreign defence entities are eligible.  Delivery date is decided based on the ‘Protocol of delivery and Acceptance’ document submitted by the shipyard. 9. Financial Assistance and Vessel Classification Key Discussion Points:  Shri Rakesh Singh sought clarity on owner-supplied equipment and inclusion of refrigerated cargo vessels under the specialised list. Suggested higher assistance rates for small specialised vessels below ₹100 crore.  Shri Nagesh Krishna Moorthy raised similar concerns for green tugs.  Diving Support Vessels (DSVs) to be considered in the Specialised vessel category Actions Taken:  Owner supplied equipment is to be a part of the shipbuilding contract.  Complexity of Refrigerated cargo vessels is not considered equivalent to "specialized vessels". Accordingly, not considered as a “specialized vessel”.  As per the approved Cabinet note, rate of financial assistance has been frozen and no further change can be made at this stage.  Diving support vessel with a moonpool has been included in the list of specialized vessels. 10. PSU-Specific Issues and Procedural Delays Key Discussion Points:  Proposed introduction of a grace period (6–9 months) beyond declared timelines for large PSU projects before financial penalties are applied.  Recommended cost-plus valuation methodology for audited PSU projects instead of market comparison.  Suggested allowing corporate or government guarantees in place of bank guarantees for PSUs.  Requested DG Shipping to issue a standard closure certificate format compatible with PSU audit and MoD systems.  Proposed inclusion of DGQA/Navy representatives in the Fair Price Committee (FPC) for defence-linked projects. Actions tTaken:  Timelines as mentioned in the guidelines are applicable to all shipyards. Complexity of the projects has been suitably addressed by classifying vessels as “Specialized”  Basis the current discussions, Bank Guarantee is considered necessary.  Methodology as mentioned in the guidelines is vessel specific and neutral to the type of shipyard.  Valuations are carried out by international evaluators who are essentially ship brokers in the international market. Under the present structure, presence of a committee for calculation of fair price is not considered necessary.11. Taxation Issues in Ship Recycling Key Discussion Points:  Shri Haresh Parmar (SRIA) raised concerns over double GST when Indian owners sell ships domestically for recycling, diverting ships abroad.  Shri Pradeep explained that the 40% ship recycling assistance is intended to offset such cost disadvantages. Actions Taken:  Issue is not related to the current scheme. 12. Clarifications on Definitions and Timeline Key Discussion Points:  Shri Anil Devli (INSA) and Shri Srinivasa Rao Padala (HSL) requested clearer definitions of “specialised” and “non-specialised” vessels and default six-year timeline for specialised vessels. Actions Taken:  Guidelines have been suitably amended to address the ambiguity. 13. Closing Remarks Key Discussion Points:  Shri Pradeep Shri Ravi Kumar and Shri Ankur Anal appreciated all members for their participation and assured that every suggestion would be examined carefully.  Final draft to be consolidated after upcoming consultations in Ahmedabad and Mumbai. Actions to be Taken:  Stakeholders to send all final written inputs by 16th October 2025.  Final consolidated guidelines to be submitted to the Ministry by 24th October 2025. Comprehensive Summary of the Meeting Sl. Key Discussion Point Raised By Action to be Taken / No. Decision 1 Subcommittee roles and Shri Anil Devli Subcommittee roles and review mechanism (INSA) review mechanism was explained.2 Insurance surety bonds as Shri S.V. Basis the current discussions, BG alternative Rambabu Bank Guarantee is considered necessary. (HSL) 3 Milestone-linked project Shri Srinivasa Subsequent to several timelines for large vessels Rao Padala discussions with industry stakeholders, 3 stage (HSL) Shri payments has been Sanjiv Walia considered a feasible solution (SAI) for all vessels i.e. launching, delivery and 3rd stage upon receipt of final payment from ship owner. 4 To consider EU(SSR) SRIA It is noted that all EU(SSR) compliance as a eligibility compliant yards are HKC compliant, hence amendment criterion for defining is not required. ‘eligible ship recycling yards’. 5 Scrap value determination Shri Rakesh Scrap value will be assessed and credit note transfer Singh, ICCSA by the international valuators. Credit notes are transferrable hence cash buyers can resell the credit note to the ship owner. 6 Eligibility for PSU and Shri Srinivasa Vessels built for defence auxiliary defence vessels Rao Padala purposes or for use by Navy or Coast Guard are excluded. (HSL), Shri However, vessels like tugs, Ghoshal tankers, cargo ships and (Suryadipta passenger ships that are not Projects) fitted with any weaponry, contracted for construction by foreign defence entities are e ligible. 7 Cost-plus valuation for Shri Srinivasa Under SBFAS, in case of PSU projects Rao Padala bidding, contract price is considered the fair price (HSL) whereas for negotiation, market valuation is considered appropriate. 8 Government/corporate Shri Srinivasa Basis the current discussions, guarantees for PSUs Rao Padala Bank Guarantee is (HSL) considered necessary. 9 Inclusion of DGQA/Navy in Shri Srinivasa Valuations are carried out by Fair Price Committee Rao Padala international evaluators who (HSL) are essentially ship brokers in the international market.Under the present structure, presence of a committee for calculation of fair price is not considered necessary. 10 Grace period for PSU Shri Srinivasa Timelines as mentioned in the project delays Rao Padala guidelines are applicable to (HSL) all shipyards. 11 Clarification of delivery Shri Srinivasa Delivery date is decided definition for MoD projects Rao Padala based on the ‘Protocol of (HSL) delivery and Acceptance’ document submitted by the shipyard. 12 Higher assistance rates for Shri Rakesh As per the approved Cabinet smaller specialised vessels Singh note, rate of financial assistance has been frozen (ICCSA), Shri and no further change can be Nagesh m ade at this stage. Krishna Moorthy (CSL) 13 Double GST on domestic Shri Haresh Issue is not related to the ship recycling Parmar (SRIA) c urrent scheme. 14 Provide clear and Shri Anil Devli Relevant clause suitably unambiguous default six- (INSA) a mended. year timeline for s pecialised vessels.Minutes of Meeting Stakeholder Consultation on Shipbuilding Financial Assistance Scheme (SBFAS) Guidelines Date: 17th October 2025 Time: 10:00 Hrs – 18:00 Hrs Venue: GIFT City, Gujarat Maritime Board Convened by: Directorate General of Shipping (DG Shipping), Ministry of Ports, Shipping & WaterwaysKey Discussion Points and Actions Taken During the consultation held on 17th October 2025 at Ahmedabad, several key issues and clarifications were discussed under the Shipbuilding Financial Assistance Scheme (SBFAS). 1. Lt Cdr. Pravat Haldar (Titagarh) raised the point regarding the scenario when the whole construction is offloaded to another party. It was clarified that the Builder’s Certificate should be issued by the yard that has signed the shipbuilding contract.Action Taken: Builder's certificate is to be issued by the yard which has signed the shipbuilding contract. 2. Shri Amit Waje (IRS) sought clarification on the minimum requirements or framework for registration of a shipyard. It was explained that the intent of the registration process is to enable shipyards to apply for an in-principal approval, and therefore, the process has been kept simple to encourage wider participation. Action Taken: The intent of registration is to allow the shipyard to apply for an in-principal application, hence, the registration process has been kept simpler. 3. Sh Anshul Wadia (Wadia boat builders) requested clarification regarding the definition of small ships and the applicability of financial assistance to specialized vessels such as tugs and inland towing vessels under 24 meters. Action Taken: It was explained that as long as the benchmark of 100 cr is met irrespective of any length the financial assistance will be provided. For the hybrid vessels the length requirement is 12 m. 4. Sh Talavia, CE, GMB : The issue of determining the fair scrap value prior to dismantling was discussed. Action Taken: Fair Scrap value is based on the values provided by the international valuer before the application for shipbreaking credit note is submitted. 5. Sh Bharat Krishnan (L&T): Clarifications were also sought on the definition of Domestic Content under the Contract Price, especially in cases where OEMs have Indian offices. An example was given of MAN, where engines may be imported but payment is made in INR. Action Taken: Certificate from OEM would ascertain the country of origin. 6. Shri Anshul Wadia (Wadia Boatbuilders) raised a query regarding the length requirement for export orders and whether only boats are eligible for financial assistance. He also enquired about the necessity of IACS or type approval. Action Taken: It was clarified that there is no minimum length requirement for export orders, and propulsion is not a mandatory condition. Vessels built under SBFAS must be constructed under a Recognized Organization of the Government of India. 7. Representatives from the Shipping Corporation of India (SCI) suggested that in cases where PSU vessels are scrapped through tendering, the tender price should be taken into consideration.Action Taken: Guidelines have been suitably amended to include this provision, 8. Shri Gaurav (SWAN) sought clarification on the utilization of credit notes and their linkage with the SBFAS process. Action Taken: The procedures and timelines were explained in detail to all attendees. 9. Another query was raised regarding contracts that do not include ammunition or weapons and whether such vessels could still qualify for assistance. Action Taken: It was clarified that vessels built for defence purposes or for use by the Navy or Coast Guard are excluded. However, tugs, tankers, cargo ships, and passenger ships contracted by foreign defence entities without weaponry are eligible for assistance. 10. Participants sought clarification on the list of specialized vessels. Action Taken: It was confirmed that the list has been suitably amended to include additional categories based on industry feedback. Accordingly, Diving support vessel with a moonpool has been added to the list of specialized vessels. 11. Mr. Amit Waze (IRS) discussed the issue of vessel launching and the role of the classification society. Action Taken: It was explained that while shipyards schedule launchings based on tides and operational convenience, the launching date recorded by the Recognized Organization (RO) will be considered final for the purpose of the scheme. 12. Cmde Sanjeev Kapoor (SWAN) raised a query on the requirement of Bank Guarantees (BG) at various stages of payment. Action Taken: It was clarified that BG is required at the launching stage, whereas it is not necessary at the time of delivery if the payment is taken in one instalment. Comprehensive Summary of the Meeting Sl. Key Discussion Point Raised By Action to be Taken / Decision No. If the whole construction Lt Cdr. Builder's certificate is to be is offloaded to another Pravat issued by the yard which has 1 party. The "Shipbuilding Haldar signed the shipbuilding contract. Contract" to be (Titagarh) rephrased.Sl. Key Discussion Point Raised By Action to be Taken / Decision No. "Contract Price" there are Sh Talavia, The contract should include all some parts/ items which 2 CE, GMB the prices i.e., should be inclued are supplied by the with owner's supplied items. owner. The intent of registration is to Minimum set of allow the shipyard to apply for an requirement or framework Sh Amit in-principal application, hence, 3 for registration of the Waje (IRS) the registration process has been shipyard kept simpler. It was explained that as long as Definition of Small ships, Shri. Anshul the benchmark of 100 cr is met exemptions to specialized Wadia irrespective of any length the 4 vessels like tugs, inland (Wadia financial assistance will be towing vessels which are Boatbuilders) provided. For the hybrid vessels lesser than 24 m. the length requirement is 12 m. Fair scape value is Fair Scrap value is based on the Sh Talavia, decided well in advance values provided by the 5 CE, GMB before ship is sent to international valuer before the scrap. application made. Timelines cannot be mandated to the international valuators. How and what timelines However, in case shipyard does of approval, international not receive 3 valuations within 45 Physical 6 valuer will take.The days of the receipt of valuator Attendee process of the scrap to be list, yard can request for a fresh considered. list of valuators and then yard is provided another 45 days for submitting 3 valuator certificates. Domestic Contect is this Contract Price - anything imported. Sh Bharat Attendee also brought out Certificate from OEM would Krishnan 7 that many of the OEMs ascertain the country of origin (L&T) has offices in India. The best example is MAN if the the engine is imported by them and payment isSl. Key Discussion Point Raised By Action to be Taken / Decision No. done in INR will it be considered as domestic content There is no length requirement Length requirement for for an export order. the export order. There is no requirement of the Shri. Anshul Only boats are eligible for propulsion. Wadia 8 the financial assistance. Vessels built under SBFAS need (Wadia Is IACS mandatory? Is to be built under the classification Boatbuilders) Type approved boats are of a Recognized Organization of eligible the Government of India. PSU scraps the vessels through tendering. 9 SCI Amended in the guidelines. Requested to consider the tender price Utilization of the credit Shri. Gaurav Process and timelines were 10 note and linking with the (SWAN) explained to the shipyard SBFAS. Vessels built for defence If the contract does not purposes or for use by Navy or include ammunition, Sh Bharat Coast Guard are excluded. weapons will be assisted Krishnan However, vessels like tugs, 11 finances (L&T) tankers, cargo ships and OPVs, vessels fitted with passenger ships that are not small arms can be fitted with any weaponry, included contracted for construction by foreign defence entities are eligible. Sh Bharat The list of specialized vessel has Krishnan been suitably amended to 12 Specialized Vessels list (L&T) include ‘Diving Support vessel with a moonpool’ Launching of the vessel. Shipyards takes up the Mr. Amit Launching date mentioned by 13 launching according to Waze (IRS) RO will be considered as final. tides etc. Class onlySl. Key Discussion Point Raised By Action to be Taken / Decision No. provides the only clearances. If subsidy at the launching stage to be Cmde availed is there any At launching stage BG is Sanjeev 14 necessity of paying BG. required. At delivery BG is not Kapoor If one time payment to be required. (SWAN) taken will there be any requirement of BG Annexure IV Minutes of Meeting Stakeholder Consultation on Shipbuilding Financial Assistance Scheme (SBFAS) Guidelines Date: 30th October 2025 Time: 11:00 Hrs – 12:15 Hrs Venue: Online Convened by: Directorate General of Shipping (DG Shipping), Ministry of Ports, Shipping & Waterways Participants: DG Shipping  Shri Pradeep Sudhakaran, Chief Ship Surveyor-cum-Joint DG (Tech.) Shri Nebu Oommen, Dy. Chief Ship Surveyor-cum- Senior Deputy Director General (Tech.), DG Shipping  Shri Ravi Kumar, Ship Surveyor-cum- Deputy Director General (Tech.), DG Shipping  Shri Ankur Anal – Junior Ship Surveyor-cum-Assistant Director General (Tech.), DG Shipping Core Committee Members  Vipul Sinhgal, Director (SBR), Ministry of Ports, Shipping and Waterways (MoPSW)  Ravi Kumar, Ship Surveyor-cum-Deputy Director General (Tech.), Directorate General of Shipping (DGS)  Ankur Anal, Junior Ship Surveyor-cum-Assistant Director General (Tech.), Directorate General of Shipping (DGS)  Shrikant Itagi, CCPL, Shipyards Association of India  Prantik Sen, Hon. Secretary, Indian Shipbuilders Association (ISBA)  K.K. Dhawan, Senior Vice President, Indian Register of Shipping (IRS)  Kalpesh Vithlani, GM, Gujarat Maritime Board (GMB)  Nikhil Raj, Deputy General Manager i/c (SB&S), Shipping Corporation of India (SCI)  Haresh Parmar, Hon. Secretary, Ship Recycling Industries Association (SRIA)  Nagesh K. Moorthy, General Manager (Business Development), Cochin Shipyard Limited (CSL)  Rakesh Singh, President, ICC Shipping Association (ICCSA) Industry Participants Representatives from GRSE, CSL, MDL, GSL, L&T, IRS, San Marine, Chowgule Shipyard, Konkan Barge Builders, and other shipyards Key Discussion Points and Actions Taken This meeting was a core-committee (ONLY) meeting to discuss all the stakeholder suggestions and the action taken report in order to finalize the guidelines before discussing the final draft of the guidelines with other industry stakeholders in the meeting scheduled on the same day in the afternoon. It was noted that roughly 100 stakeholders suggestions/clarifications have been received and all suggestions along with the action taken were discussed with the members of the core-committee. Core-committee members agreed to the actions taken. Hindustan Shipyard queries received vide email A request was made to include the concept of the effective date of the contract, which could be defined as the date of receipt of the first-stage payment, or the date of design/model test approval, depending on the contract terms.  Action Taken: DGS clarified that this cannot be considered, as the effective date is highly subjective and varies from contract to contract, potentially affecting the timelines defined under the scheme.  It was enquired whether financial assistance could be claimed for a repeat order if such a clause was not mentioned in the tender or contract.  Action Taken: DGS responded that in such cases, eligibility for financial assistance would need to be reassessed after reviewing the relevant tender documents.  Another clarification was sought regarding the inclusion of Gazette Notification No. S.O. 3316(E) dated 26th December 2014 in the base scheme document for reference.  Action Taken: DGS explained that the notification could not be annexed as it is subject to periodic revisions.  A participant observed that there was no distinct definition for “Standard Vessel” and suggested introducing it to avoid confusion during implementation of fair price assessments.  Action Taken: DGS responded that non-specialized vessels constitute a negative list of the specialized vessel category and are therefore not separately defined.  DGS To confirm that the values (Rs 100 Cr) are excluding taxes and duties.  Action Taken: It was confirmed by DGS that the benchmark vessel value of ₹100 crore is exclusive of all taxes and duties.  Clarification was sought regarding the difference in the text highlighted in bold concerning credit notes.  DGS explained that a credit note can be redeemed against a new building contract at any time up to the last payment receipt from the ship owner.  Participants requested that certain sections of the guidelines be supplemented with examples for better understanding.  DGS agreed and confirmed that a Frequently Asked Questions (FAQ) document containing relevant examples will be prepared. Regarding the validity of credit notes, DGS clarified that the validity period of three years is counted from the date of redemption — i.e., the date on which the credit note is attached to a shipbuilding contract.  It was also confirmed that the minimum length restriction does not apply to vessels valued above ₹100 crore or those built for export orders. For vessels valued below ₹100 crore, the minimum length requirement is 24 meters for regular vessels and 12 meters for hybrid vessels.  A query was raised on the validity of paragraph 1.(g)(iii) of the guidelines.  Action Taken: DGS confirmed that the reference was checked and found to be correct.  Participants from Hindustan Shipyard Limited (HSL) requested clarity on the inclusion of Diving Support Vessels (DSVs) in the specialized vessel list.  Action Taken: DGS informed that the matter is under further discussion.  It was requested that valid email IDs and contact details of all approved valuers be updated in the list.  Action Taken: DGS confirmed that revised details have already been incorporated.  A query was raised regarding the percentage of financial assistance to be released at the launching stage, as defined in Annexure II-1 of the procedure for release of financial assistance.  Action Taken: DGS clarified that the amount considered for computation will be the minimum of 50% of the contract price or the price received by the ship owner, as certified by a Chartered Accountant.  Another clarification was sought on whether a Bank Guarantee (BG) is required at the delivery stage.  Action Taken: DGS confirmed that a BG is not required at delivery.  It was further clarified that financial assistance will be released in three stages as per the scheme, and relevant modifications have been made in the guidelines to address earlier inconsistencies.  No reference was made to certain paragraphs cited in the document.  Action Taken: DGS noted this observation for review.  Based on indigenous content, a table showing the proportionate reduction in financial assistance has now been incorporated into the revised guidelines in Schedule V.Cochin Shipyard queries received vide email  Clarification was sought on the definition and application methodology for “domestic content,” particularly the treatment of projects with below 30%, between 30–40%, and above 40% domestic value addition.  Action Taken: DGS responded that this aspect has been elaborated and explained in the guidelines in Schedule V  CSL proposed extending the capping of non-specialized vessels from three years to a longer duration, considering that even diesel engines, especially two-stroke slow-speed types, currently have a lead time exceeding 30 months.  Action Taken: DGS confirmed that the guidelines have been suitably amended to include an extended timeline of four years for normal vessels and six years for projects involving more than two vessels.  CSL further suggested simplifying Clause 3 by removing the requirement to obtain separate approvals from the Competent Authority for delivery extensions beyond three years and by indicating the timeline as up to six years by default for specialized vessels.  Action Taken: DGS informed that the guidelines have been suitably amended to incorporate this recommendation.  It was also proposed that a clear definition of “eligible vessels” be added.  Action Taken: DGS confirmed that the definition has been included in the guidelines.  Regarding the Government’s Remission of Duties and Taxes on Export Products (RoDTEP) scheme under the Foreign Trade Policy 2023–28, CSL suggested that its benefits—being a remission of embedded taxes and duties—align with the intent of the SBFAS provisions and should be treated as permissible under the scheme.  Action Taken: DGS stated that the proposal would be further discussed and provisionally inserted as Paragraph 2.b.i of the guidelines.  CSL further elaborated that RoDTEP is not a form of monetary support but rather a neutralization mechanism for embedded taxes, and that its benefits are equivalent in effect and intent to tax exemptions. Accordingly, CSL requested that Clause 5(d)(i) be amended to explicitly include RoDTEP as a specific exception to the restriction, and that other export-linked schemes such as duty drawback also be considered for inclusion.  Action Taken: This matter will be reviewed further by DGS. CSL recommended that the list of green fuel types be expanded to include all forms of green fuels, instead of limiting it to methanol, ammonia, and hydrogen fuel cells.  Action Taken: DGS advised that the shipyard specify the types of vessels utilizing fuels other than the mentioned three that may be considered for inclusion in the updated list.  It was also noted that under SBFAS 1.0, vessels constructed on nomination from Central or State Public Sector Enterprises were eligible for assistance, whereas under SBFAS 2.0 they are excluded. CSL requested that this clause be retained in alignment with the earlier version, as such projects fall under the category of negotiated contracts. DGS clarified that nomination contracts from Central and State Governments would be included in the exclusion list under the revised scheme.  CSL expressed concern that the ₹100 crore distinction would adversely impact special programs such as GTTP and Harith Nauka. It was suggested that for special vessels, a uniform financial assistance rate of 25% be applied without any cost-based distinction.  Action Taken: DGS clarified that, as per the approved Cabinet note, the rate of financial assistance has been frozen and cannot be modified. SWAN queries received vide email  It was highlighted that these new categories of vessels are two to three times larger in size compared to LR/MR tankers, falling within a displacement range of approximately 0.8L to 3.2L DWT. The VLCC, Suezmax, and Aframax vessels have not been previously constructed in India and require a significantly higher level of technological capability, design expertise, skilled manpower, and capital investment.  Accordingly, it was proposed that these vessel types be incorporated under Schedule-II, “List of Specialized Vessels,” of the document Guidelines for Implementation of the Shipbuilding Financial Assistance Scheme (SBFAS), under the category “Crude Carrying Vessels – VLCC, Suezmax, and Aframax.”  Action Taken: DGS informed that the guidelines have already been suitably amended to consider an extended delivery timeline for all vessels. Specifically, the standard timeline has been extended to four years for normal vessels and six years for contracts involving more than two vessels.  It was further discussed under the Energy and Forex Security consideration that the principal objective of the Four-Pillar approach for the Shipbuilding and Maritime sector is to enhance national energy and foreign exchange securityby promoting the construction of high-GRT liquid and bulk carriers in India. CSL proposed that a reference text may be incorporated in the guidelines to acknowledge the strategic importance of such shipbuilding projects, stating: “Energy and Forex Security imperatives of the country may warrant prioritizing certain specific shipbuilding cases as necessitated.”  Action Taken: DGS clarified that this provision is not directly relevant to the SBFAS framework and therefore may not be included in the scheme guidelines. HHI queries received vide email  It was proposed that the salaries of foreign engineers and production managers, who are either directly employed by Indian shipyards or deputed to India under a service agreement, should be recognized as part of the Local Content.  Action Taken: DGS clarified that irrespective of nationality, if such salaries are paid in Indian Rupees (INR) and appropriate taxation is in India they shall be considered under the local content requirement subject to meeting other local laws.  Further, it was suggested that if the total construction cost includes overhead expenses, the corresponding local overhead costs should also be recognized in the numerator while calculating local content.  Action Taken: DGS confirmed that expenditures made in INR, including overhead expenses, may be accounted under the local content requirement subject to meeting the local laws and value addition requirements as mentioned in the guidelines. ICCSA queries received vide email  ICCSA representatives sought clarification on several aspects related to the Shipbuilding Financial Assistance Scheme (SBFAS) during the consultation.  It was clarified that the scheme is available to all Indian shipyards; however, yards must be registered on the SBFAS portal to be eligible to apply for an in- principle approval.  A query was raised regarding the inclusion of owner-supplied equipment and machinery in the computation of overall shipbuilding costs.  Action Taken: DGS confirmed that all costs associated with the construction of the vessel, including items supplied directly by the owner, will be considered toward the total project cost for determining financial assistance eligibility.  Regarding cost escalation, Action Taken: DGS explained that in-principle approval is granted on the basis of the initial contract price, which serves as the budget estimate. Valuations conducted by approved valuers are also based on these initial specifications. If any technical or commercial parameters are revised later, a fresh set of assessments will be required.  Participants noted that most shipbreaking contracts entered into by Indian shipowners are executed through “cash buyers,” who subsequently deal with the ship recycling yards.  Action Taken: DGS acknowledged this reality and informed that credit notes have been made transferable, thereby allowing cash buyers to sell them to the actual shipowners.  Clarification was sought regarding the intent of a particular section of the guidelines.  Action Taken: DGS explained that the clause ensures financial assistance is extended only when the majority of the vessel’s construction activity occurs within India.  The time limits prescribed for completion of vessel construction were also discussed. It was requested that the provision for schedule relaxation should not be limited only to specialized vessels.  Action Taken: DGS clarified that the extended construction timeline of four years will now apply to regular vessels as well.  A request was made to confirm that, in cases where the value of a credit note exceeds 5% of the value of a new vessel, the redeemable amount would be capped at 5%.  Action Taken: DGS confirmed that credit notes may indeed be redeemed up to 5% of the new vessel’s value.  It was further proposed that, considering the prolonged period often involved between the sale of a vessel for demolition and the completion of scrapping, an alternate document such as a “beaching certificate” issued by local authorities could be accepted to facilitate timely processing.  Action Taken: DGS clarified that, in accordance with Cabinet approval, credit notes can only be issued upon completion of the demolition or recycling process.  ICCSA suggested allowing greater flexibility in the utilization of credit notes. DGS responded that credit notes are already designed to be stackable and transferable, offering sufficient flexibility; however, partial utilization remains disallowed. Proposals for phased realization or partial encashment of credit notes were also raised. These points were taken under advisement for further consideration by the shipyards.  Further, it was proposed to include additional vessel types—such as Ro-Ro, Ro-Pax, reefer vessels, and high bollard pull tugs—under the specialized category, particularly to enhance salvage capability and emergency response preparedness.  ICCSA observed that the ₹100-crore threshold for specialized vessels employing emerging technologies may be too restrictive and suggested reducing it to ₹50 crore to encourage investment.  Action Taken: DGS clarified that the ₹100-crore threshold has been fixed under the Cabinet-approved framework and therefore cannot be modified. APMB queries received vide email  What happens when an SPV is formed with an international company?  Action Taken: The registered shipyard as per the certificate will be eligible for the financial assistance.  Please clarify the non-inclusion of Indian valuers and provide the final list of empanelled valuers.  Action Taken: Indian valuers are already in the empanelled list.  Please confirm whether duly approved contractual extensions (e.g., force- majeure or owner-caused delay(s)) extend the six-year eligibility window.  Action Taken: No. May be evaluated on case by case basis as directed by the IM.  Priority rules / wait-list mechanism: Please share the method used when the budget is insufficient (e.g., First In First Out, contract size, strategic category). Delay compensation: Please clarify whether interest/compensation is payable for delayed release.  Action Taken: 1. In case of insufficient funds, shipyards are paid in the next financial year. 2 No. (Please add a clause in the guidelines to avoid ambiguity)  Stacking of credit notes: Please clarify whether multiple credit notes may be combined/stacked for a single newbuild. Transfer documentation: Please specify the documentation and approval flow required when credit notes are transferred. Action Taken: 1. Yes 2. Explained in the guidelines.Annexure V Minutes of Meeting Date: 30.10.2025 (afternoon) Time: 15:45 hrs – 17:15 hrs Venue: DG Shipping, Kanjurmarg Convened by: Directorate General of Shipping (DG Shipping), Ministry of Ports, Shipping & WaterwaysKey Discussions:- Summary Sl Inputs/ Clarification DGS Point No. sought Response Cannot be Request to include considered as “Date of Contract” the concept of it is very means the date of effective date of subjective and signing of the initial contract which may varies from or the first Contract 1 be date of receipt of contract to for construction of stage 1 payment or contract which underlying vessel finalization/approval will effect the or vessels, as the of design/model test timelines fixed case may be. etc (as per contract) under the scheme. In the case of repeat orders, the L1 price discovered / determined through the initial competitive, open and fair bidding process will be considered as Fair If repeat order clause Price for vessels not mentioned in the under the repeat tender or contract, 2 order, subject to can I claim financial the initial tender assistance for repeat document and the order? contract clearly No, financial mentioning about assistance the repeat order eligibility will and the criteria to need to be be followed, reascertsined including that of after pricing, for reviewing the awarding the tender repeat order. documents. “Recognized Organization” Gazette Notification means an No. S.O. 3316(E) organization dated December 26, 3 recognized by the 2014 be included in Government of the base scheme Cannot be India as per the document for ready annexed as it Gazette reference. changes from Notification No. time to time.S.O. 3316(E) dated December 26, 2014, as amended from time to time. No diffence found with the definition of “Non-Specialized Standard vessel, as Vessel” means explained in meeting Non vessel which is not be introduced when specialized 4 a specialized fair price for standard vessels is a vessel as vessels is negative list of described above. implemented to the avoid confusion to specialized stakeholders. vessel list. (s) “Small vessel” refers to those vessels whose fair price or the contract price; whichever is less is equal to or less DGS To confirm that than INR 100 the values (Rs 100 5 crore. Cr) are excluding (t) “Large vessel” taxes and duties. refers to vessels whose fair price or the contract price; Yes, the value whichever isless, is is excluding more than INR 100 taxes and crore. duties • Credit note available at the time of order placement: If a credit note is available from the outset or at the time the order is Credit note placed, Please explain the can be 6 redemption is difference between redeemed allowed. the text in bold against a new • Credit note building obtained after contract order for new anytime upto vessel is placed: If the last a credit note is payment obtained after the receipt from order has been the ship placed, owner.redemption is allowed any time before the final settlement by the Owner to the shipyard. 4.4 Eligibility of ship orders for credit note This section be redemption explained with some 7 examples for better 4.5 Guidelines for understanding of the FAQ with the issuance and scheme. relevant usage of credit example will notes be prepared. The date of Validity: - Credit validity of a Note will have a Does Credit note credit note is validity period (for which valid for 3 yrs basis the date redemption) of 3 lapse when utilised of redemption 8 (three) years from on construction of i.e. when a the completion specialised vessel of creditnote is date of scrapping 4~6yrs. attached to a the vessel. shipbuilding contract. Yes, minimum However, for length export orders and Request to confirm restriction vessels with fair the critieria in this does not price greater than para applies to other 9 apply for the 100 crore, vessels also and not following: 1) minimum length restricted to export ships above restriction is not orders only. 100 crore 2) applicable. Export orders. However, for export orders and What is the min vessels with fair length if value is < price greater than 24m for 10 Rs 100 Crs does 100 crore, regular para 1 applies for minimum length vessels and these cases. restriction is not 12m for hybrid applicable. vessels Vessels built under contracts secured Paragraph 1.(g)(iii) on nomination reference is not 11 basis from the valid, kindly check Central or State Reference and confirm Government or confirmed and their agencies found correct.including Central or State Public Sector Enterprises, except for cases not complying with Paragraph 1.(g)(iii) Complexity of Process/guidelines these vessels for inlcusion of is not vessels into considered LIST OF specialised list be equivalent to 12 SPECIALIZED bought out as HSL "specialized VESSELS wants to include vessels". Diving Support Accordingly, Vessel into the list. not considered Valid email id and LIST OF contact details of all Revised 13 INTERNATIONAL the valuers be details have VALUERS updated in the list. been added • Certificate of Actual Payment received for a vessel duly % of amount that certified by a would be released in Chartered Account this stage is unclear registered with as defind in Institute of ANNEXURE-II-1 Chartered PROCEDURE FOR Accountants of RELEASE OF India. FINANCIAL • Certificate of ASSISTANCE Actual payment (AFTER received by the LAUNCHING) :The recipient bank. The 14 claim amount is certificate should limited to the rate of be provided as per financial assistance the format for the applicable provided in financial year, as Annexure III B2, on Amount received for that the bank’s official considered for vessel by the letterhead, and computation shipyard, as certified must be duly of FA = min of by the Chartered signed and (50% of accountant, or 50% stamped by an contract price, of the contract price, authorized official price received whichever is less of the bank. by the ship • Bank Guarantee owner as issued by a certified by a scheduled CA)commercial bank, for an amount equal to the financial assistance claimed at this stage, Bank Guarantee issued by a scheduled commercial bank, 15 for an amount New Query equal to the financial BG is not assistance claimed required at at this stage, delivery stage 1.1 In case of contracts, wherein any payment is deferred by the buyer or any payment is withheld as performance It is explained that guarantee as per the financial the terms stated in assistance will be the shipbuilding released in three 16 contract initially stage where as this submitted to para says it is limited Directorate to only two General of instances, request to Shipping, the confirm. shipyard shall apply for release of financial assistance, limited Relevant to only two changes instances, in the made in the following manner; guidelines. FORMAT OF THE no reference made 17 INDEMNITY to the paras in the BOND document. - Based on indigenous Format for content, table Chartered 18 showing New text Accountant’s proportionate added in the Certificate reduction in financial guidelinesassistance is not mentioned in the document. • Details of Newbuilding where credit is to be used: Shipyard, Vessel Name being built, Contract Price, Date of contract, applicable 10% cap = [0.1 * contract price]. Max cap is 5%, • Claim: “I/We whereas here it is 19 hereby redeem this mentioned as 10%, Credit Note request to reconcile. towards the above project. The permissible usage is ₹___ (enter lesser of note value and 10% cap). Please offset this against the Guidelines payment due for have been financial suitably assistance.” revised Cochin Shipyard queries received vide email  Clarification was sought on the definition and application methodology for “domestic content,” particularly the treatment of projects with below 30%, between 30–40%, and above 40% domestic value addition.  Action Taken: DGS responded that this aspect has been elaborated and explained in the guidelines.  CSL proposed extending the capping of non-specialized vessels from three years to a longer duration, considering that even diesel engines, especially two- stroke slow-speed types, currently have a lead time exceeding 30 months.  Action Taken: DGS confirmed that the guidelines have been suitably amended to include an extended timeline of four years for normal vessels and six years for projects involving two or more vessels.  CSL further suggested simplifying Clause 3 by removing the requirement to obtain separate approvals from the Competent Authority for delivery extensions beyond three years and by indicating the timeline as up to six years by default for specialized vessels.  Action Taken: DGS informed that the guidelines have been suitably amended to incorporate this recommendation. It was also proposed that a clear definition of “eligible vessels” be added.  Action Taken: DGS confirmed that the definition has been included in the guidelines.  Regarding the Government’s Remission of Duties and Taxes on Export Products (RoDTEP) scheme under the Foreign Trade Policy 2023–28, CSL suggested that its benefits—being a remission of embedded taxes and duties— align with the intent of the SBFAS provisions and should be treated as permissible under the scheme.  Action Taken: DGS stated that the proposal would be further discussed and provisionally inserted as Paragraph 2.b.i of the guidelines.  CSL further elaborated that RoDTEP is not a form of monetary support but rather a neutralization mechanism for embedded taxes, and that its benefits are equivalent in effect and intent to tax exemptions. Accordingly, CSL requested that Clause 5(d)(i) be amended to explicitly include RoDTEP as a specific exception to the restriction, and that other export-linked schemes such as duty drawback also be considered for inclusion.  Action Taken: This matter will be reviewed further by DGS.  CSL recommended that the list of green fuel types be expanded to include all forms of green fuels, instead of limiting it to methanol, ammonia, and hydrogen fuel cells.  Action Taken: DGS advised that the shipyard specify the types of vessels utilizing fuels other than the mentioned three that may be considered for inclusion in the updated list.  It was also noted that under SBFAS 1.0, vessels constructed on nomination from Central or State Public Sector Enterprises were eligible for assistance, whereas under SBFAS 2.0 they are excluded. CSL requested that this clause be retained in alignment with the earlier version, as such projects fall under the category of negotiated contracts. DGS clarified that nomination contracts from Central and State Governments would be included in the exclusion list under the revised scheme.  CSL expressed concern that the ₹100 crore distinction would adversely impact special programs such as GTTP and Harith Nauka. It was suggested that for special vessels, a uniform financial assistance rate of 25% be applied without any cost-based distinction.  Action Taken: DGS clarified that, as per the approved Cabinet note, the rate of financial assistance has been frozen and cannot be modified. Sl. No. CSL Comments DGS Response 1. With effect from Date of effect of the guidelines is being further 24 Sep 2025 discussed. 2. BOLDDefinition of domestic content is mentioned. However, nowhere in the policy, the 3. methodology of Explained in the guidelines. applying SBFAS to below 30%, 30-40% and above 40% is mentioned. Needs elaboration. capping of non- special vessels at 3 years considering that even diesel engines Guidelines have been suitably amended to (especially 2 4. include extended timeline of 4 years for normal stoke slow speed vessels. For contracts with more than 2 vessels engines) timeline has been extended to 6 years. presently have a lead time of over 30 months. We my consider longer period for ‘Large’ vessels. Second last line of second para of clause 3 may be removed ( i.e ’’and thereafter the delivery period provided for in this Clause shall be such extended period 5. as permitted by Guidelines have been suitably amended. the Competent Authority”). This line gives a meaning that the yard has to take a separate approval from the competent authority for the extent periodbeyond three years. Hence kindly make this para more simplified and indicate the timeline as upto 6 years by default for specialized vessels. The definition of 6. eligible vessel Added to the Guidelines. needs to be added Under the Foreign Trade Policy 2023-28, the Government has promulgated the RoDTEP (Remission of Taxes and Duties for Export Products) Scheme. This scheme is expressly 7. designed to Amended the guidelines to insert as Para 2.b.i provide remissio n of duties and taxes embedded in exported products. This has been done to ensure that our exports do not suffer due to embedded taxes and thereby make our exports competitive.Accordingly, the RoDTEP benefit aligns with the category of “exemptions or remissions of domestic taxes or import duties” which the SBFAP clause allows alongside SBFAP assistance. The remission of duties under this scheme is not a monetary support but negation of the embedded taxes in the exported product by providing neutralization. Hence, RoDTEP remission is the same as exemption in effect and intent. It is therefore requested that the Clause 5 (d)(i) may be amended to include RoDTEP as a specific exception to the restriction. Simil arly, other export- oriented schemes like duty drawback etc also be considered to inclusion in the exception.May include all types of green fuels, instead of 8. limiting to Methanol, Ammonia & Hydrogen fuel Shipyard to clarify specifically which vessel other cells. than methanol, ammonia, hydrogen fuel cell is required to be added to the list. In SBFA 1.0, the vessels on nomination from Central or State Public Sector Enterprises were not excluded. In SBFA 2.0, the 9. same is excluded from availing SBFA. Kindly retain the clause as per SBFA 1.0, as such contracts comes under the type of negotiated contracts. Nomination contracts from Central/state government to be considered in the exclusion list. The restriction of 10 100 Cr will As per the approved Cabinet noe, the rate of FA . adversely affect has been frozen. GTTP and HarithNauka programmes. Therefore, in case of special vessels, there should be only one rate of 25%, without 100 Cr distinction SWAN queries received vide email  It was highlighted that these new categories of vessels are two to three times larger in size compared to LR/MR tankers, falling within a displacement range of approximately 0.8L to 3.2L DWT. The VLCC, Suezmax, and Aframax vessels have not been previously constructed in India and require a significantly higher level of technological capability, design expertise, skilled manpower, and capital investment.  Accordingly, it was proposed that these vessel types be incorporated under Schedule-II, “List of Specialized Vessels,” of the document Guidelines for Implementation of the Shipbuilding Financial Assistance Scheme (SBFAS), under the category “Crude Carrying Vessels – VLCC, Suezmax, and Aframax.”  Action Taken: DGS informed that the guidelines have already been suitably amended to consider an extended delivery timeline for all vessels. Specifically, the standard timeline has been extended to four years for normal vessels and six years for contracts involving two or more vessels.  It was further discussed under the Energy and Forex Security consideration that the principal objective of the Four-Pillar approach for the Shipbuilding and Maritime sector is to enhance national energy and foreign exchange security by promoting the construction of high-GRT liquid and bulk carriers in India. CSL proposed that a reference text may be incorporated in the guidelines to acknowledge the strategic importance of such shipbuilding projects, stating: “Energy and Forex Security imperatives of the country may warrant prioritizing certain specific shipbuilding cases as necessitated.”  Action Taken: DGS clarified that this provision is not directly relevant to the SBFAS framework and therefore may not be included in the scheme guidelines. 1 List of specialized shipsSpecialised Ships. During the review on 17 Oct 25 by Secretary Shipping with the Oil companies the list of vessels required by the Oil companies was pruned down from 112 to 59 in number. This has been done by reducing the number of LR / MR Tankers and increasing the VLCC, Suezmax and Aframax vessels. It is submitted that the new category of vessels are double or triple in size of LR/MR tankers and fall in the displacement range of 0.8L-3.2L DWT. The VLCC, Suezmax & Aframax vessels have never Extended timeline has been been made in the country and require an considered for the delivery of extremely high level of technology, design, all vessels, accordingly, skill set and CAPEX infusion. It is there fore Guidelines have been suitably proposed that the same be included at Page amended to include extended 18, Schedule-II - List of Specialised Vessels timeline of 4 years for normal of the document ?Guidelines for vessels. For contracts with Implementation of Shipbuilding Financial more than or equal to 2 Assistance Scheme (SBFAS)?. 19. Crude vessels timeline has been carrying vessels ? VLCC, Suezmax, Aframax extended to 6 years. (b) Energy & Forex Security. It is understood that the primary aim of the Four Pillar approach for Shipbuilding and Maritime sector is Energy and Forex which is mainly possible by constructing high GRT liquid and bulk carriers in India. Accordingly following text could be included at page 4 of the document ?Guidelines for Implementation of Shipbuilding Financial Assistance Scheme (SBFAS)?. (w) ?Energy & Forex Security? imperatives of the country may warrant prioritising certain specific shipbuilding cases This provision is not relevant to 2 as necessitated. the SBFAS scheme Hyundai queries received vide email  It was proposed that the salaries of foreign engineers and production managers, who are either directly employed by Indian shipyards or deputed to India under a service agreement, should be recognized as part of the Local Content.  Action Taken: DGS clarified that irrespective of nationality, if such salaries are paid in Indian Rupees (INR), they shall be considered under the local content requirement in accordance with applicable Indian laws.  Further, it was suggested that if the total construction cost includes overhead expenses, the corresponding local overhead costs should also be recognized in the numerator while calculating local content.  Action Taken: DGS confirmed that all expenditures made in INR, including overhead expenses, will be accounted for under the local content requirement.Query Raised DGS Response 1 (I) Specialized vessel Category - Proposal in Brief To strengthen the competitiveness of the Indian shipbuilding industry, it would be desirable to include not only high value-added specialized Complexity of these vessels but also large general-purpose commercial vessels is not considered ships (such as Aframax-class tankers and medium- equivalent to "specialized sized product carriers) in the category of vessels". Accordingly, Specialized Vessels under the SBFAP.. not considered 2 Domestic Content Requirement Irrespective of the nationality, If salaries are Brief: Salaries of foreign engineers and production paid in INR, the same managers who are either directly employed by would be considered in Indian shipyards or dispatched to India under a the local content Service Agreement should be recognized as part of requirement/as per the Local Content. local indian laws All expenses made in INR including overheads, Proposal: If total construction costs include would be considered in overhead expenses, corresponding local overhead the local content costs should also be recognized in the numerator. requirement. If not, the denominator should be recalculated based on direct costs only. ICCSA queries received vide email  ICCSA representatives sought clarification on several aspects related to the Shipbuilding Financial Assistance Scheme (SBFAS) during the consultation.  It was clarified that the scheme is available to all Indian shipyards; however, yards must be registered on the SBFAS portal to be eligible to apply for an in- principle approval.  A query was raised regarding the inclusion of owner-supplied equipment and machinery in the computation of overall shipbuilding costs.  Action Taken: DGS confirmed that all costs associated with the construction of the vessel, including items supplied directly by the owner, will be considered toward the total project cost for determining financial assistance eligibility.  Regarding cost escalation,  Action Taken: DGS explained that in-principle approval is granted on the basis of the initial contract price, which serves as the budget estimate. Valuationsconducted by approved valuers are also based on these initial specifications. If any technical or commercial parameters are revised later, a fresh set of assessments will be required.  Participants noted that most shipbreaking contracts entered into by Indian shipowners are executed through “cash buyers,” who subsequently deal with the ship recycling yards.  Action Taken: DGS acknowledged this reality and informed that credit notes have been made transferable, thereby allowing cash buyers to sell them to the actual shipowners.  Clarification was sought regarding the intent of a particular section of the guidelines.  Action Taken: DGS explained that the clause ensures financial assistance is extended only when the majority of the vessel’s construction activity occurs within India.  The time limits prescribed for completion of vessel construction were also discussed. It was requested that the provision for schedule relaxation should not be limited only to specialized vessels.  Action Taken: DGS clarified that the extended construction timeline of four years will now apply to regular vessels as well.  A request was made to confirm that, in cases where the value of a credit note exceeds 5% of the value of a new vessel, the redeemable amount would be capped at 5%.  Action Taken: DGS confirmed that credit notes may indeed be redeemed up to 5% of the new vessel’s value.  It was further proposed that, considering the prolonged period often involved between the sale of a vessel for demolition and the completion of scrapping, an alternate document such as a “beaching certificate” issued by local authorities could be accepted to facilitate timely processing.  Action Taken: DGS clarified that, in accordance with Cabinet approval, credit notes can only be issued upon completion of the demolition or recycling process.  ICCSA suggested allowing greater flexibility in the utilization of credit notes. DGS responded that credit notes are already designed to be stackable and transferable, offering sufficient flexibility; however, partial utilization remains disallowed.  Proposals for phased realization or partial encashment of credit notes were also raised. These points were taken under advisement for further consideration by the shipyards.  Further, it was proposed to include additional vessel types—such as Ro-Ro, Ro-Pax, reefer vessels, and high bollard pull tugs—under the specialized category, particularly to enhance salvage capability and emergency response preparedness. ICCSA observed that the ₹100-crore threshold for specialized vessels employing emerging technologies may be too restrictive and suggested reducing it to ₹50 crore to encourage investment.  Action Taken: DGS clarified that the ₹100-crore threshold has been fixed under the Cabinet-approved framework and therefore cannot be modified. ICCSA’s Secti inputs/co on Proposed provision mments Committee Response Applicability : The said policy as well as the guidelines shall be applicable to all the IS the Indian shipyards. scheme Whereas section 4.1 sta available tes: to yards The above Credit registered Note(s) can be in the redeemed by the vessel SBFAS owner towards payment portal or for the vessel being open to all ordered/under yards in The scheme is available to all construction at an India. Indian Shipyards, however, they Indian shipyard, which Request would need to be registered on the 1 ( c is registered in the clarificatio SBFAS portal in order to apply for ) SBFAS web portal. n. an in-principal application. It is very common “Actual practice in Payment” means the shipbuildin total quantum of g payment received by contracts the shipyard pertaining in India to a shipbuilding where key contract including such equipment payment received , subsequent to the machinery delivery of the vessel as may be is duly certified by a “owners Chartered Accountant supply” registered with Institute and paid of Chartered by the Accountants of India in owner All costs attached to the the format prescribed at directly to construction of the ship whether a Annexure-III of these the part of owner's supplied item or guidelines and vendor. otherwise is considered towards supported by requisite Would the computation of financial 2 (a ) documentary evidence. such cost assistance,incurred toward shipbuildin g will be factored in the “overall cost” and thus be eligible for SBFAS. “Contract Price” means the price at which the initial or the first shipbuilding contract has been signed, or any such lower price agreed at a later date in a In-principal approval is granted supplementary or basis the initial contract price subsequent Contract for based on which a budget estimate the vessels required to Cost is prepared. Also, valuations be constructed under escalation carried out by valuers are also the Contract involving may also based on the initial specifications. the shipyard as one of be Subsequently, if specifications are 2 ( d the parties to the said considere revised, a fresh set of assessment ) later Contract. d. is required. Most shipbreaki ng contracts by Indian shipowner s are with “Cash buyers” who in turn enters (iv) For shipbreaking into an credit note, the fair price agreement refers to the lowest of with the prices for ship scrapyard recycling, as on the at his/her date convenien of contract with the Ship ce. breaking yard, as are Signing a This is true, Accordingly, credit determined by three direct notes have been made approved International contract transferrable, hence cash buyers 3 ( g Valuers listed in with can sell the credit notes to the ship ) iv Schedule–III. shipbreaki owners.ng yard is rare. Mechanis m is required to address this ground reality. (r) “Major portion of the hull” means, the main hull of the ship / vessel, that is made of Shipbuilding Grade Steel, Aluminum or any such materials as approved for the purpose of construction of ships/ vessels by Recognized Maritime Authorities, and does not include, Superstructure, Equipment & The Machineries, Mast, purpose of Equipment foundations, this Shaft Support Brackets, section is This clause ensures that financial Stern tube, Bow not assistance is available only if Thruster Tunnels, understoo majority of the construction 2 (r ) Rudder etc. d? happens in India The time limits set for completion of constructio n require more realistic Extended timeline of 4 years for assessme regular vessels has been nt. The considered. scope of relaxation in time limit is granted Eligibility of vessel for only for availing the Financial “specialize 3 Assistance. d vessels”.Request clarity that even if the value of the credit • Provided that, note the maximum amount exceeds that can be redeemed 5% of the by the government to value of the shipyard would be the new the value of the credit vessel, 5% note(s) or 5% of the of the value of the new vessel value of among the lowest of fair new price, contract price, vessel will price received by be the cut the shipyard for the new off credit Yes, credit note can be redeemed 4.1 vessel limit. upto 5% of the value of new vessel. 2. A statement from the Chartered Accountant endorsing the evidence for confirmation of Bank transaction indicating 4.2- the price received from Same as 3 2 the ship breaking yard. (g ) iv Between the sale of the vessel for demolition and completion of scrapping can be a very long drawn process. Alternative • A certificate of ly, to make “recycling” from a the certified recycling yard process and a certificate of more demolition completion efficient, issued by the respective alternate State Maritime Board/ document state government shall such as As per the cabinet approval, credit be obtained and “beaching note can be issued only upon 4.3 submitted. certificate” completion of demolition/recycling.issued by the local authority may be considere d. • Single-contract Request to utilization: Each credit provide note must be more Credit notes have been made applied in full to a single flexibility stackable, transferrable, thus newbuilding contract. to utilize providing adequate flexibility, Partial utilization is not the credit However, partial utlization is not 4.5 permitted. note permitted. 4. Proof of Scrapping: Certificate of Recycling Completion issued by the respective State Maritime Board/State Government competent authority, Copy of the Anne statutory Ships As per the cabinet approval, credit xure Recycling Certificate or Same as note can be issued only upon VI ship deletion certificate 4.3 completion of demolition/recycling. Realizatio At the time of delivery of n the new vessel, the (encashm Shipyards need to be paid the vessel owner shall ent) of credit note as soon as possible submit the Credit Note credit note because they have already to the shipyard for full may be delivered the vessel, before raising and final settlement of considere a request for redemption of credit the credit note value d in note. Hence, phased payment of 4.7 payable to the shipyard. phases. credit note is not considered. • Credit Notes are Partial Shipyards need to be paid the indivisible and must be encashme credit note as soon as possible utilized in full against a nt of credit because they have already single new shipbuilding note may delivered the vessel, before raising contract. Partial be a request for redemption of credit application is not considere note. Hence, phased payment of 4.8 permitted. d as well. credit note is not considered. Suggest to add Ro- Ro, Ro- Pax, Reefers, and High bollard pull Complexity of these vessels is not Sche Tugs (with considered equivalent to dule Specialized list of emphasis "specialized vessels". Accordingly, II vessels on not considereddeveloping salvage capability and emergenc y response) A threshold of 100 Cr is rather high for specialize d vessel using developing technologi es. A threshold of 50 Cr may be more Specialized vessel of conducive value up to 100 Crore to kick Sche 15% of value below 100 start the dule Crore and 25% on value investment Threshold of 100 cr has been IV above 100 Crore s. frozen in the cabinet approval. APMB queries received vide email  What happens when an SPV is formed with an international company?  Action Taken: The registered shipyard as per the certificate will be eligible for the financial assistance.  Please clarify the non-inclusion of Indian valuers and provide the final list of empanelled valuers.  Action Taken: Indian valuers are already in the empanelled list.  Please confirm whether duly approved contractual extensions (e.g., force- majeure or owner-caused delay(s)) extend the six-year eligibility window.  Action Taken: No. May be evaluated on case by case basis as directed by the IM.  Priority rules / wait-list mechanism: Please share the method used when the budget is insufficient (e.g., First In First Out, contract size, strategic category). Delay compensation: Please clarify whether interest/compensation is payable for delayed release.  Action Taken: 1. In case of insufficient funds, shipyards are paid in the next financial year. 2 No. (Please add a clause in the guidelines to avoid ambiguity)  Stacking of credit notes: Please clarify whether multiple credit notes may be combined/stacked for a single newbuild.Transfer documentation: Please specify the documentation and approval flow required when credit notes are transferred.  Action Taken: 1. Yes 2. Explained in the guidelines.Response to the queries against their respective Sr. No. is mentioned below:- The registered shipyard as per the certificate will be eligible for the 1 financial assistance 2 Indian valuers are already in the empanelled list. 3 No. May be evaluated on case by case basis as directed by the IM. 1. In case of insufficient funds, shipyards are paid in the next financial 4 year. 2 No 5 1. Yes 2.Explained in the guidelinesAnnexure VI Summary of stakeholder discussions and action taken 1. Workshop on 10.10.2025Stakeholder meeting dated 14.10.2025 and 17.10.2025 Stakeholder Sl. No. Name & Input/Suggestion DGS Response Organization Subcommittee roles and Shri Anil Devli Subcommittee roles and 1 review mechanism (INSA) review mechanism explained. Basis the current Shri S.V. Insurance surety bonds as discussions, Bank 2 Rambabu BG alternative Guarantee is considered (HSL) necessary. 3 stage payments has Shri Srinivasa Milestone-linked project been finalized for all 3 Rao Padala timelines for large vessels vessels i.e. launching, (HSL), Shri delivery and 3rd stageSanjiv Walia upon receipt of final (SAI) payment from ship owner. A representative suggested inclusion of EU It is noted that all Ship Recycling Regulation EU(SSR) compliant yards 4 SRIA (EUSRR) compliant yards are HKC compliant, hence in addition to Hong Kong no amendment required. Convention (HKC) compliance Scrap value will be Concerns were raised by assessed by the Shri Rakesh Singh international valuators. regarding determination of Shri Rakesh Credit notes are 5 scrap value and the Singh (ICCSA) transferrable hence cash challenges in transferring buyers can resell the credit notes through credit note to the ship intermediaries. owner. Vessels built for defence purposes or for use by Recommended inclusion Navy or Coast Guard are of PSU-built auxiliary and Shri Srinivasa excluded. However, dual-purpose defence Rao Padala vessels like tugs, tankers, vessels under the (HSL), Shri cargo ships and 6 scheme. He also Ghoshal passenger ships that are suggested redefining (Suryadipta not fitted with any “delivery date” to align Projects) weaponry, contracted for with Ministry of Defence construction by foreign acceptance procedures. defence entities are eligible. Clarity on owner-supplied equipment and inclusion of refrigerated cargo 1.Diving support vessel vessels under the with a moonpool has been specialised list. added to the list of Shri Rakesh Suggested higher specialized vessel Singh (ICCSA) assistance rates for small, whereas refrigrerated 7 Shri Nagesh specialised vessels below cargo vessel was not Krishna ₹100 crore. Similar considered complex Moorthy (CSL) concern was raised for enough. 2. Rate of FA has green tugs as well. been frozen in the cabinet Diving Support Vessels note. (DSVs) to be considered in the Specialised vessel categoryProposed introduction of a grace period (6–9 months) beyond declared timelines for large PSU projects before financial penalties are applied. Recommended cost-plus valuation methodology for audited PSU projects instead of market comparison. In case of bidding, Suggested allowing contract price is Shri Srinivasa corporate or government considered the fair price 8 Rao Padala guarantees in place of whereas for negotiation, (HSL) bank guarantees for market valuation is PSUs. considered appropriate. Requested DG Shipping to issue a standard closure certificate format compatible with PSU audit and MoD systems. Proposed inclusion of DGQA/Navy representatives in the Fair Price Committee (FPC) for defence-linked projects. Raised concerns over double GST when Indian Shri Haresh Issue is not related to the 9 owners sell ships Parmar (SRIA) current scheme. domestically for recycling, diverting ships abroad. Requested clearer Shri Anil Devli definitions of “specialised” (INSA) and “non-specialised” Relevant clause suitably 10 Shri Srinivasa vessels and default six- amended. Rao Padala year timeline for (HSL) specialised vessels. Attendee requested to Shri Prashant This matter is being 11 extend the guidelines as (Chowgule) discussed further. much as possible. If the whole construction is Builder's certificate is to Lt Cdr. Pravat offloaded to another party. be issued by the yard 12 Haldar The "Shipbuilding which has signed the (Titagarh) Contract" to be rephrased. shipbuilding contract. The contract should "Contract Price" there are Sh Talavia, CE, include all the prices i.e., 13 some parts/ items which GMB should be inclued with are supplied by the owner. owner's supplied items.The intent of registration Minimum set of is to allow the shipyard to Sh Amit Waje requirement or framework apply for an in-principal 14 (IRS) for registration of the application, hence, the shipyard registration process has been kept simpler. It was explained that as long as the benchmark of Defination of Small ships, 100 cr is met irrespective Shri. Anshul levay to specialized of any length the financial 15 Wadia (Wadia vessels like tugs, inland assistance will be Boatbuilders) towing vessels which are provided. For the hybrid lesser than 24 m. vessels the length requirement is 12 m. Fair Scrap value is based Fair scape value is on the values provided by Sh Talavia, CE, decided well in advance 16 the international valuer GMB before ship is sent to before the application scrap. made. Timelines cannot be mandated to the international valuators. However, in case shipyard How and what timelines of does not receive 3 approval, international valuations within 45 days Sh Talavia, CE, 17 valuer will take.The of the receipt of valuator GMB process of the scrap to be list, yard can request for a considered. fresh list of valutors and then yard is provided another 45 days for submitting 3 valutor certificates. Domestic Contect is this Contract Price - anything imported. Attendee also brought out that many of the OEMs Certificate from OEM Sh Bharat has offices in India. The 18 would ascertain the Krishnan (L&T) best example is MAN if country of origin. the the engine is imported by them and payment is done in INR will it be considered as domestic content There is no length Lenth requirement for the requirement for an export Shri. Anshul export order. order. 19 Wadia (Wadia Only boats are eligilble for There is no requirement of Boatbuilders) the financial assistance. the propulsion. Is IACS mandetory? Is Vessels built underType approved boats are SBFAS need to be built eligible under the classification of a Recognized Organization of the Governement of India. PSU scraps the vessels through tendering. Amended in the 20 SCI Requested to consider the guidelines. tender price Untilization of the credit Process and timelines Shri. Gaurav 21 note and linking with the were explained to the (SWAN) SBFAS. shipyard Vessels built for defence purposes or for use by Navy or Coast Guard are If the contract does not excluded. However, include ammunition, vessels like tugs, tankers, weapons will be assisted Sh Bharat cargo ships and 22 finances Krishnan (L&T) passenger ships that are OPVs, vessels fitted with not fitted with any small arms can be weaponry, contracted for included construction by foreign defence entities are eligible. The list of specialized Sh Bharat 23 Specialized Vessels list vessel has been suitably Krishnan (L&T) amended. Launching of the vessel. Shipyards takes up the Launching date Mr. Amit Waze launching according to 24 mentioned by RO will be (IRS) tides etc. Class only considered as final. provides the only clearances. If subsidy at the launching stage to be availed is Cmde Sanjeev there any necessity of At launching stage BG is 25 Kapoor paying BG. required. At delivery BG is (SWAM) If one time payment to be not required. taken will there be any requirement of BG Inputs received from HSL(ISBA) vide email Points forwarded to DG Shipping on 14 Oct 25 - SBFAS Inputs/ Clarification DGS Sl No. Point sought ResponseCannot be considered as Request to include the “Date of Contract” means it is very concept of effective date of the date of signing of the subjective and contract which may be initial or the first Contract varies from date of receipt of stage 1 1 for construction of contract to payment or underlying vessel or contract which finalization/approval of vessels, as the case may will effect the design/model test etc (as be. timelines fixed per contract) under the scheme. In the case of repeat orders, the L1 price discovered / determined through the initial competitive, open and fair bidding process will be If repeat order clause not considered as Fair Price for mentioned in the tender or 2 vessels under the repeat contract, can I claim No, financial order, subject to the initial financial assistance for assistance tender document and the repeat order? eligibility will contract clearly mentioning need to be about the repeat order and reascertsined the criteria to be followed, after reviewing including that of pricing, for the tender awarding the repeat order. documents. “Recognized Organization” means an organization Gazette Notification No. recognized by the S.O. 3316(E) dated Government of India as per December 26, 2014 be 3 the Gazette Notification No. included in the base Cannot be S.O. 3316(E) dated scheme document for annexed as it December 26, 2014, as ready reference. changes from amended from time to time. time to time. No diffence found with the definition of Standard “Non-Specialized Vessel” vessel, as explained in Non means vessel which is not meeting be introduced specialized 4 a specialized vessel as when fair price for vessels is a described above. standard vessels is negative list of implemented to avoid the specialized confusion to stakeholders. vessel list.(s) “Small vessel” refers to those vessels whose fair price or the contract price; whichever is less is equal to DGS To confirm that the or less than INR 100 crore. 5 values (Rs 100 Cr) are (t) “Large vessel” refers to excluding taxes and duties. vessels whose fair price or Yes, the value the contract price; is excluding whichever isless, is more taxes and than INR 100 crore. duties • Credit note available at the time of order placement: If a credit note is available from the outset or at the time the order is Credit note placed, redemption is can be allowed. redeemed Please explain the • Credit note obtained after against a new 6 difference between the text order for new vessel is building in bold placed: If a credit note is contract obtained after the order anytime upto has been placed, the last redemption is allowed payment any time before the final receipt from settlement by the Owner the ship to the shipyard. owner. 4.4 Eligibility of ship orders for credit note redemption This section be explained with some examples for FAQ with 7 4.5 Guidelines for the better understanding of the relevant issuance and usage of scheme. example will credit notes be prepared. The date of validity of a Validity: - Credit Note will credit note is Does Credit note which have a validity period (for basis the date valid for 3 yrs lapse when redemption) of 3 (three) of redemption 8 utilised on construction of years from the completion i.e. when a specialised vessel of date of scrapping the creditnote is 4~6yrs. vessel. attached to a shipbuilding contract. Yes, minimum However, for export orders Request to confirm the length and vessels with fair price critieria in this para applies restriction 9 greater than 100 crore, to other vessels also and does not apply minimum length restriction not restricted to export for the is not applicable. orders only. following: 1) ships above100 crore 2) Export orders. However, for export orders 24m for What is the min length if and vessels with fair price regular value is < Rs 100 Crs does 10 greater than 100 crore, vessels and para 1 applies for these minimum length restriction 12m for hybrid cases. is not applicable. vessels Vessels built under contracts secured on nomination basis from the Central or State Paragraph 1.(g)(iii) Government or their 11 reference is not valid, agencies including Central kindly check and confirm or State Public Sector Enterprises, except for Reference cases not complying with confirmed and Paragraph 1.(g)(iii) found correct. Complexity of these vessels Process/guidelines for is not inlcusion of vessels into considered LIST OF SPECIALIZED specialised list be bought 12 equivalent to VESSELS out as HSL wants to "specialized include Diving Support vessels". Vessel into the list. Accordingly, not considered Valid email id and contact Revised LIST OF INTERNATIONAL 13 details of all the valuers be details have VALUERS updated in the list. been added • Certificate of Actual % of amount that would be Payment received for a released in this stage is vessel duly certified by a unclear as defind in Chartered Account ANNEXURE-II-1 registered with Institute of PROCEDURE FOR Chartered Accountants of RELEASE OF FINANCIAL India. ASSISTANCE (AFTER • Certificate of Actual Amount LAUNCHING) :The claim payment received by the considered for 14 amount is limited to the recipient bank. The computation of rate of financial assistance certificate should be FA = min of for the applicable financial provided as per the format (50% of year, as received for that provided in Annexure III B2, contract price, vessel by the shipyard, as on the bank’s official price received certified by the Chartered letterhead, and must be by the ship accountant, or 50% of the duly signed and stamped owner as contract price, whichever is by an authorized official of certified by a less the bank. CA)• Bank Guarantee issued by a scheduled commercial bank, for an amount equal to the financial assistance claimed at this stage, Bank Guarantee issued by a scheduled commercial 15 bank, for an amount equal New Query BG is not to the financial assistance required at claimed at this stage, delivery stage 1.1 In case of contracts, wherein any payment is deferred by the buyer or any payment is withheld as It is explained that the performance guarantee as financial assistance will be per the terms stated in the released in three stage shipbuilding contract initially 16 where as this para says it submitted to Directorate is limited to only two General of Shipping, the instances, request to shipyard shall apply for confirm. release of financial Relevant assistance, limited to only changes made two instances, in the in the following manner; guidelines. FORMAT OF THE no reference made to the 17 INDEMNITY BOND paras in the document. - Based on indigenous content, table showing Format for Chartered proportionate reduction in 18 Accountant’s Certificate financial assistance is not New text mentioned in the added in the document. guidelines• Details of Newbuilding where credit is to be used: Shipyard, Vessel Name being built, Contract Price, Date of contract, applicable 10% cap = [0.1 * contract price]. Max cap is 5%, whereas • Claim: “I/We hereby 19 here it is mentioned as redeem this Credit Note 10%, request to reconcile. towards the above project. The permissible usage is ₹___ (enter lesser of note value and 10% cap). Guidelines Please offset this against have been the payment due for suitably financial assistance.” revised Inputs received from CSL vide email Sl. No. CSL Comments DGS Response 1. With effect from Date of effect of the guidelines is being further 24 Sep 2025 discussed. 2. BOLD Definition of domestic content is mentioned. However, nowhere in the policy, the 3. methodology of Explained in the guidelines. applying SBFAS to below 30%, 30- 40% and above 40% is mentioned. Needs elaboration. capping of non- special vessels at 3 years considering that Guidelines have been suitably amended to 4. even diesel include extended timeline of 4 years for normal engines vessels. For contracts with more than 2 vessels (especially 2 stoke timeline has been extended to 6 years. slow speed engines) presently have a lead timeof over 30 months. We my consider longer period for ‘Large’ vessels. Second last line of second para of clause 3 may be removed ( i.e ’’and thereafter the delivery period provided for in this Clause shall be such extended period as permitted by the Competent Authority”). This line gives a meaning that the 5. yard has to take a Guidelines have been suitably amended. separate approval from the competent authority for the extent period beyond three years. Hence kindly make this para more simplified and indicate the timeline as upto 6 years by default for specialized vessels. The definition of 6. eligible vessel Added to the Guidelines. needs to be added Under the Foreign Trade Policy 2023-28, the Government has 7. promulgated the Amended the guidelines to insert as Para 2.b.i RoDTEP (Remission of Taxes and Duties for Export Products)Scheme. This scheme is expressly designed to provide remission of duties and taxes embedded in exported products. This has been done to ensure that our exports do not suffer due to embedded taxes and thereby make our exports competitive. Accordingly, the RoDTEP benefit aligns with the category of “exemptions or remissions of domestic taxes or import duties” which the SBFAP clause allows alongside SBFAP assistance. The remission of duties under this scheme is not a monetary support but negation of the embedded taxes in the exported product by providing neutralization. Hence, RoDTEP remission is the same as exemption in effect and intent.It is therefore requested that the Clause 5 (d)(i) may be amended to include RoDTEP as a specific exception to the restriction. Similar ly, other export- oriented schemes like duty drawback etc also be considered to inclusion in the exception. May include all types of green fuels, instead of 8. limiting to Methanol, Ammonia & Hydrogen fuel Shipyard to clairfy specifically which vessel cells. other than methanol, ammonia, hydrogen fuel cell is required to be added to the list.In SBFA 1.0, the vessels on nomination from Central or State Public Sector Enterprises were not excluded. In SBFA 2.0, the 9. same is excluded from availing SBFA. Kindly retain the clause as per SBFA 1.0, as such contracts comes under the type of negotiated contracts. Nomination contrats from Central/state government to be considered in the exclusion list. The restriction of 100 Cr will adversely affect GTTP and Harith Nauka 10 programmes. As per the approved Cabinet noe, the rate of . Therefore, in case FA has been frozen. of special vessels, there should be only one rate of 25%, without 100 Cr distinctionInputs received from Andhra Pradesh Maritime Board vide emailInputs received from Swan Defence vide email DGS Response 1 List of specialized shipsSpecialised Ships. During the review on 17 Oct 25 by Secretary Shipping with the Oil companies the list of vessels required by the Oil companies was pruned down from 112 to 59 in number. This has been done by reducing the number of LR / MR Tankers and increasing the VLCC, Suezmax and Aframax vessels. It is submitted that the new category of vessels are double or triple in size of LR/MR tankers and fall in the displacement range of 0.8L-3.2L DWT. The VLCC, Suezmax & Aframax vessels have never been made in the country and require an extremely high level of technology, design, skill set and Extended timeline has been CAPEX infusion. It is there fore proposed considered for the delivery of all that the same be included at Page 18, vessels, accordingly, Guidelines Schedule-II - List of Specialised Vessels of have been suitably amended to the document ?Guidelines for include extended timeline of 4 Implementation of Shipbuilding Financial years for normal vessels. For Assistance Scheme (SBFAS)?. 19. Crude contracts with more than or equal carrying vessels ? VLCC, Suezmax, to 2 vessels timeline has been Aframax extended to 6 years. (b) Energy & Forex Security. It is understood that the primary aim of the Four Pillar approach for Shipbuilding and Maritime sector is Energy and Forex which is mainly possible by constructing high GRT liquid and bulk carriers in India. Accordingly following text could be included at page 4 of the document ?Guidelines for Implementation of Shipbuilding Financial Assistance Scheme (SBFAS)?. (w) ?Energy & Forex Security? imperatives of the country may warrant prioritising certain This provision is not relevant to 2 specific shipbuilding cases as necessitated. the SBFAS scheme Inputs received from Hyundai Heavy industries vide email Query Raised DGS Response 1 (I) Specialized vessel Category - Proposal in BriefTo strengthen the competitiveness of the Indian shipbuilding industry, it would be desirable to include not only high value-added specialized Complexity of these vessels but also large general-purpose commercial vessels is not considered ships (such as Aframax-class tankers and medium- equivalent to "specialized sized product carriers) in the category of vessels". Accordingly, Specialized Vessels under the SBFAP.. not considered 2 Domestic Content Requirement Irrespective of the nationality, If salaries are Brief: Salaries of foreign engineers and production paid in INR, the same managers who are either directly employed by would be considered in Indian shipyards or dispatched to India under a the local content Service Agreement should be recognized as part of requirement/as per the Local Content. local indian laws All expenses made in INR including overheads, Proposal: If total construction costs include would be considered in overhead expenses, corresponding local overhead the local content costs should also be recognized in the numerator. requirement. If not, the denominator should be recalculated based on direct costs only. Inputs received from ICCSA ICCSA’s Secti inputs/co on Proposed provision mments DGS Response Applicability : IS the The said policy as well scheme as the guidelines shall be available to applicable to all the yards Indian shipyards. registered Whereas section 4.1 stat in the es: SBFAS The above Credit Note(s) portal or can be redeemed by the open to all The scheme is available to all vessel owner towards yards in Indian Shipyards, however, they payment for the vessel India. would need to be registered on being ordered/under Request the SBFAS portal in order to construction at an Indian clarification apply for an in-principal 1 ( c ) shipyard, which is . application.registered in the SBFAS web portal. It is very common practice in shipbuildin g contracts in India where key equipment, machinery may be “Actual “owners Payment” means the supply” total quantum of and paid payment received by the by the shipyard pertaining to a owner shipbuilding contract directly to including such payment the vendor. received subsequent to Would the delivery of the vessel such cost as is duly certified by a incurred Chartered Accountant toward registered with Institute shipbuildin of Chartered g will be Accountants of India in factored in All costs attached to the the format prescribed at the “overall construction of the ship whether a Annexure-III of these cost” and part of owner's supplied item or guidelines and supported thus be otherwise is considered towards by requisite documentary eligible for the computation of financial 2 (a ) evidence. SBFAS. assistance, “Contract Price” means the price at which the initial or the first In-principal approval is granted shipbuilding contract has basis the initial contract price been signed, or any based on which a budget such lower Cost estimate is prepared. Also, price agreed at a later escalation valuations carried out by valuers date in a supplementary may also are also based on the initial or subsequent Contract be specifications. Subsequently, if for the vessels required considered specifications are revised, a fresh 2 ( d ) to be constructed under . set of assessment is required.the Contract involving the shipyard as one of the parties to the said later Contract. Most shipbreaki ng contracts by Indian shipowners are with “Cash buyers” who in turn enters into an agreement with scrapyard at his/her convenienc e. Signing a direct (iv) For shipbreaking contract credit note, the fair price with refers to the lowest of the shipbreaki prices for ship recycling, ng yard is as on the date rare. of contract with the Shipb Mechanis reaking yard, as are m is This is true, Accordingly, credit determined by three required to notes have been made approved International address transferrable, hence cash buyers 3 ( g ) Valuers listed in this ground can sell the credit notes to the iv Schedule–III. reality. ship owners. (r) “Major portion of the h ull” means, the main hull of the ship / vessel, that is made of Shipbuilding Grade The Steel, Aluminum or any purpose of such materials as this section This clause ensures that financial approved for the purpose is not assistance is available only if of construction of ships/ understood majority of the construction 2 (r ) vessels by Recognized ? happens in IndiaMaritime Authorities, and does not include, Superstructure, Equipment & Machineries, Mast, Equipment foundations, Shaft Support Brackets, Stern tube, Bow Thruster Tunnels, Rudder etc. The time limits set for completion of constructio n require more realistic Extended timeline of 4 years for assessmen regular vessels has been t. The considered. scope of relaxation in time limit is granted Eligibility of vessel for only for availing the Financial “specialize 3 Assistance. d vessels”. Request clarity that even if the value of • Provided that, the the credit maximum amount that note can be redeemed by the exceeds government to the 5% of the shipyard would be the value of value of the credit the new note(s) or 5% of the vessel, 5% value of the new vessel of the among the lowest of fair value of price, contract price, new vessel price received by will be the Yes, credit note can be the shipyard for the new cut off redeemed upto 5% of the value 4.1 vessel credit limit. of new vessel. 2. A statement from the Chartered Accountant endorsing Same as 3 4.2- 2 the evidence for (g ) ivconfirmation of Bank transaction indicating the price received from the ship breaking yard. Between the sale of the vessel for demolition and completion of scrapping can be a very long drawn process. Alternativel y, to make the process more efficient, alternate • A certificate of document “recycling” from a such as certified recycling yard “beaching and a certificate of certificate” demolition completion issued by issued by the respective the local State Maritime Board/ authority As per the cabinet approval, state government shall may be credit note can be issued only be obtained and considered upon completion of 4.3 submitted. . demolition/recycling. • Single-contract utilization: Each credit Request to note must be provide Credit notes have been made applied in full to a single more stackable, transferrable, thus newbuilding contract. flexibility to providing adequate flexibility, Partial utilization is not utilize the However, partial utlization is not 4.5 permitted. credit note permitted. 4. Proof of Scrapping: Certificate of Recycling Completion issued by the respective State Maritime Board/State Government As per the cabinet approval, Anne competent authority, credit note can be issued only xure Copy of the statutory Same as upon completion of VI Ships Recycling 4.3 demolition/recycling.Certificate or ship deletion certificate At the time of delivery of the new vessel, the Realization Shipyards need to be paid the credit vessel owner shall (encashme note as soon as possible because submit the Credit Note to nt) of credit they have already delivered the the shipyard for full and note may vessel, before raising a request for final settlement of the be redemption of credit note. Hence, credit note value payable considered phased payment of credit note is not 4.7 to the shipyard. in phases. considered. • Credit Notes are Partial Shipyards need to be paid the credit indivisible and must be encashme note as soon as possible because utilized in full against a nt of credit they have already delivered the single new shipbuilding note may vessel, before raising a request for contract. Partial be redemption of credit note. Hence, application is not considered phased payment of credit note is not 4.8 permitted. as well. considered. Suggest to add Ro- Ro, Ro- Pax, Reefers, and High bollard pull Tugs (with emphasis on developing salvage capability Complexity of these vessels is Sche and not considered equivalent to dule Specialized list of emergency "specialized vessels". II vessels response) Accordingly, not considered A threshold of 100 Cr is rather high for specialized vessel using developing Specialized vessel of technologi value up to 100 Crore es. A Sche 15% of value below 100 threshold dule Crore and 25% on value of 50 Cr Threshold of 100 cr has been frozen IV above 100 Crore may be in the cabinet approval.more conducive to kick start the investment s.Annexure VII GUIDELINES FOR IMPLEMENTATION OF SHIPBUILDING FINANCIAL ASSISTANCE SCHEME (SBFAS) 1. (a) Title: The scheme for grant of financial assistance to shipyards shall be called “Shipbuilding Financial Assistance Scheme (SBFAS)” and the guidelines formulated to implement the scheme shall be called “Guidelines for Implementation of Shipbuilding Financial Assistance Scheme”. (b) Validity: The Shipbuilding Financial Assistance Scheme (SBFAS) and the guidelines shall come into force with effect from xx, 2025 and shall be applicable for shipbuilding contracts signed during the dates xx, 2025 up to March 31, 2036, including the said dates. (c) Applicability: The said policy as well as the guidelines shall be applicable to all the Indian shipyards. 2. Definitions. (a) “Actual Payment” means the total quantum of payment received by the shipyard pertaining to a shipbuilding Contract including such payment received subsequent to the delivery of the vessel as is duly certified by a Chartered Accountant registered with Institute of Chartered Accountants of India in the format prescribed at Annexure-III of these guidelines and supported by requisite documentary evidence. (b) “Competent authority” means the authority designated for performance of various functions under these guidelines for implementation of the policy by Ministry of Ports, Shipping and Waterways. For the purpose of these guidelines, the competent authority shall be the Director General of Shipping. (c) “Shipbuilding Contract”, unless otherwise stated, means a shipbuilding Contract corresponding to construction of underlying vessel or vessels, as the case may be, and shall include the initial or the first Contract signed for such construction or any subsequent contracts amending the said initial Contract or executed replacing the said contract provided that the Contract continues to pertain to the said underlying vessel or vessels of the initial Contract. In case of novation, the Contract would mean the latest version of the shipbuilding Contract signed with the new buyer; however, thedate of contract for the scheme shall remain as the date of initial or first contract signed with the first Owner. (d) “Contract Price” means the price at which the initial or the first shipbuilding Contract has been signed, or any such lower price agreed at a later date in a supplementary or subsequent contract for the vessels required to be constructed under the Contract involving the shipyard as one of the parties to the said later Contract. (e) “Date of Contract” means the date of signing of the initial or the first Contract for construction of underlying vessel or vessels, as the case may be. (f) “Financial Assistance”, means the monetary incentive granted by the government to the shipyards for construction of vessels underlying a shipbuilding Contract under the policy, subject to fulfillment of conditions prescribed in policy guidelines. (g) “Fair Price” means- (i) In case of a standard vessel, the price of the underlying vessel as on the date of Contract as derived by the competent authority based on international trend; (ii) In case of specialized vessels, and, vessels other than standard or specialized vessels, the lowest of the prices, as on the date of Contract, as are determined by three approved International Valuers, as listed in Schedule–III. (iii) Fair price in respect of shipbuilding contracts for ships procured from Indian shipyards by Central Government / PSU / State government departments, Organisations set up under Acts of Parliament and controlled and managed by Central Government departments and CPSEs, secured by Shipyards on L1 basis through tender process, will be considered as the L1 price discovered / determined through competitive, open and fair bidding process. In the case of repeat orders, the L1 price discovered / determined through the initial competitive, open and fair bidding process will be considered as Fair Price for vessels under the repeat order, subject to the initial tender document and the contract clearly mentioning about the repeat order and the criteria to be followed, including that of pricing, for awarding the repeat order. (iv) For shipbreaking credit note, the fair price refers to the lowest of the prices for ship recycling, as on the date of contract with the Shipbreaking yard, as are determined by three approved International Valuers listed in Schedule–III.Fair price for ship breaking contracts awarded by Central Government / PSU / State government departments, Organisations set up under Acts of Parliament and controlled and managed by Central Government departments and CPSEs, awarded on L1 basis through tender process, will be considered as the L1 price discovered / determined through competitive, open and fair bidding process. (h) “Hybrid propulsion system” is a combination of alternate means of propulsion mainly from a conventional gas or oil fuel powered engine together with electrical sources derived from rechargeable means like batteries. (i) “Green Vessel” is a vessel in which source of main propulsion is methanol, ammonia or hydrogen fuel cell. (j) “In principle approval” means the approval granted by the competent authority establishing eligibility of claim of a shipyard for grant of financial assistance for vessel under construction, subject to fulfillment of conditions prescribed in the policy guidelines. (k) “International Valuer” means the valuers approved by the competent authority for the purpose of computing the “Fair Price”. A list of approved valuators will be published by the competent authority which could be added or deleted from time to time. (l) “Rate of Financial Assistance” means the rate at which the financial assistance shall be granted to the shipyard and determined with respect to the rate indicated in column (3) of the table in Schedule-IV corresponding to the vessel category and the Contract Value. (m) “Recognized Organization” means an organization recognized by the Government of India as per the Gazette Notification No. S.O. 3316(E) dated December 26, 2014, as amended from time to time. (n) “Specialized Vessel”, for the purpose of grant of financial assistance under these guidelines, means a type or class of vessel listed in Schedule-II, with the appropriate Class Notation for its Specialized purpose. (o) “Standard Vessel” means a vessel that is not a specialized vessel and for which fair price is determined on a periodic basis by the competent authority based on international price trends. (p) “Non-Specialized Vessel” means vessel which is not a specialized vessel as described above.(q) “Shipyard” means any floating or a land-based facility comprising of all or any amongst the following as essential features, namely, - waterfront, turning basin, berthing and docking facility, slipways and ship lifts, and, located within the territories of India and undertaking construction, manufacture, reconstruction or repair of vessels in India. (r) “Vessel”, for the purpose of grant of financial assistance under these guidelines, means all types of floating crafts or offshore structures built under the classification of one of the Recognized Organizations but shall exclude the crafts specified in Schedule-I. (s) “Major portion of the hull” means, the main hull of the ship / vessel, that is made of Shipbuilding Grade Steel, Aluminum or any such materials as approved for the purpose of construction of ships/ vessels by Recognized Maritime Authorities, and does not include, Superstructure, Equipment & Machineries, Mast, Equipment foundations, Shaft Support Brackets, Stern tube, Bow Thruster Tunnels, Rudder etc. (t) “Small vessel” refers to those vessels whose fair price or the contract price; whichever is less is equal to or less than INR 100 crore. (u) “Large vessel” refers to vessels whose fair price or the contract price; whichever is less, is more than INR 100 crore. (v) “Domestic Content” means the proportion (expressed as a percentage of the total value of the item) representing the value of goods, components, and services of Indian origin, including the value of Indian products and labour, in the total value of the item to be procured (excluding taxes / duties), which is used for constructing the vessel. Proposed financial assistance under SBFAS for vessels which meet certain domestic content requirements is detailed in Schedule V. Certification of Domestic Content is explained in Annexure V – Format for Chartered Accountant’s Certificate. (w) “Fair Scrap Value” in the context of shipbreaking refers to the lowest monetary value among the Contract Price, Fair Price, and actual price received by the ship recycling yard which is duly certified by a Chartered Accountant. This value will serve as the baseline for calculating the Credit Note.(x) “Eligible Ship” for scrapping means any vessel owned by an Indian / foreign owner and flagged under any flag administration, which is proposed to be scrapped in accordance with the provisions of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (HKC) in a certified Indian Ship recycling yard. 3. Eligibility of vessel for availing the Financial Assistance. Only those vessels, which are constructed and delivered within a period of four years from the date of Contract, shall be eligible for availing financial assistance under the policy. Provided that, in the case of shipbuilding contracts where more than two vessels and upto 4 vessels are signed under the same contract, those vessels which are constructed and delivered within a period of six years from the date of Contract, shall be eligible for availing financial assistance. Provided that, in the case of shipbuilding contracts involving more than four vessels under the same contract, those vessels which are constructed and delivered beyond the overall six-year timeline shall be eligible for financial assistance only if each subsequent vessel is delivered within a period of six months from the date of delivery of the immediately preceding vessel. Provided that, in case of specialized vessels, those vessels which are constructed and delivered within a period of six years from the date of Contract, shall be eligible for availing financial assistance. 1. Application for Financial Assistance. (a) The application for in principle approval for grant of financial assistance for a vessel shall be made as per the procedure prescribed in Annexure-I of this policy. (b) The application for release of financial assistance for a vessel shall be made as per the procedure prescribed in Annexure-II of this policy and the competent authority shall, after due scrutiny of the application, permit release of the financial assistance to the applicant shipyard. (c) In case the competent authority, after scrutiny, identifies deficiencies in the application made in pursuance of sub-clauses (a) or (b) above, it may give an opportunity to the applicant shipyard as per the procedure prescribed in Annexure-I and Annexure-II, as the case may be, to make good, the said deficiency and shall take a decision for in principle approval or release of financial assistance, as the case may be, based on response of the applicant shipyard. Any denial of benefit sought underthe applications made in pursuance of sub-clauses (a) and (b) above by the competent authority shall be conveyed to the applicant shipyard in writing with reasons for such denial. 2. Computation of Financial Assistance. (a) The quantum of financial assistance for a vessel shall be the product of the applicable rate of financial assistance prevailing on the date of Contract, and, the lowest of the contract price or the fair price when converted in Indian Rupees: Provided that, at the time of release of financial assistance, if the actual payment received for a vessel is lower than the contract price, such payment shall replace the contract price in the formulae for computation of the financial assistance. (b) In case of a Contract obtained through global tender or competitive bidding, the bid price shall be treated as the contract price for computation of financial assistance in the formulae specified at sub-clause (a) above. (b.i) Interaction with RoDTEP Scheme (Foreign Trade Policy 2023–28): In accordance with the provisions of the Foreign Trade Policy 2023–28, the Government of India has implemented the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to neutralize the incidence of embedded duties and taxes in respect of exported goods. In cases where the vessel constructed under a shipbuilding contract is exported, the shipyard shall be entitled to avail benefits under the RoDTEP Scheme, subject to the applicable guidelines issued by the Directorate General of Foreign Trade (DGFT). However, to ensure uniformity and to prevent duplication of fiscal benefits, no element of duty or tax already remitted or reimbursed under the RoDTEP Scheme or any other duty remission mechanism shall be considered again for computation or release of financial assistance under this Scheme. The applicant shipyard shall, at the time of seeking financial assistance, declare the details and extent of any RoDTEP or other remission benefits claimed in respect of the vessel, and the Competent Authority shall undertake necessary verification, including consultation with DGFT or other concerned agencies, to ensure that no overlap of benefits occurs. (c) For the purpose of computation of financial assistance as per the formulae specified at sub-clause (a) above, the fair price or contract price or actual payment, ifreceived in foreign currency, shall be converted into Indian Rupees as per the exchange rate published by the State Bank of India under the category of TT Buying Rates on the date of Contract: Provided that, in case the exchange rate is not among the currencies published by the State Bank of India, the applicant shipyard shall obtain a certificate from the State Bank of India about the exchange rate for the currency prevailing on the date of Contract. 3. Release of Financial Assistance (a) Wherever, in principle approval for grant of financial assistance for a vessel has been granted by the competent authority, such financial assistance shall be released for the vessel subject to compliance of conditions of this policy: Provided further that, in case the budget is not available for release of financial assistance for vessel(s) under an eligible contract in a particular year for release of financial assistance, the same will be released on priority in the subsequent financial year on availability of budget. (b) The requisite financial assistance shall only be released in Indian Rupees. 4. Shipbreaking Credit Note Scheme (Incentive for Vessel Recycling and Replacement) 4.1. Shipbreaking Credit Note – Outline  When an eligible vessel is scrapped at an at a government certified ship recycling facility in India, which is compliant with the “Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (HKC)” a Credit Note equivalent to 40% of the “fair scrap value” is issued to the vessel owner, with a validity of 3 years from the date of scrapping the vessel. Procedure for issuance of Shipbreaking credit note is explained in Section 4.6 of this document.  The above Credit Note(s) can be redeemed by the vessel owner towards payment for the vessel being ordered/under construction at an Indian shipyard, which is registered in the SBFAS web portal. The Governmentshall be paying the value of the “Credit note” to the shipyard when the new ship is delivered to the Owner. If the existing owner does not intend to build a new vessel, the credit note is transferrable to another owner who intends to build a vessel in the Indian shipyard.  Provided that, the maximum amount that can be redeemed by the government to the shipyard would be the value of the credit note(s) or 5% of the value of the new vessel among the lowest of fair price, contract price, price received by the shipyard for the new vessel.  Credit note may be redeemed by the ship owner during the final settlement of payment of the new-built vessel. However, there are conditions and a specific process for issuance and redemption of these credit notes, as detailed below. 4.2. Methodology for issuance of Shipbreaking Credit Note All the following documents are to be submitted for issuance of credit note: 1. Ship breaking contract price clearly mentioning the total scrap value of the vessel based on Lightweight Displacement Tonnage (LDT) to be paid to the ship owner. 2. A statement from the Chartered Accountant endorsing the evidence for confirmation of Bank transaction indicating the price received from the ship breaking yard. 3. Fair valuation for scrapping of the vessel by three approved International Valuers listed in Schedule–III 4. The lowest of the prices indicated in points 1,2 and 3 above would be considered as the “fair scrap value”. 5. Based on the above, “Shipbreaking Credit note” for the vessel being scrapped will be issued to the vessel owner. 4.3. Eligibility of vessels being scrapped for Credit Note Issuance  Any Indian or foreign flagged vessel which is scrapped in India would be considered for issuance of the ship breaking credit note. The scrapping must take place at an authorized ship recycling facility in India, compliant with the provisions of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (HKC) as well as the associated rules and regulations.  A certificate of “recycling” from a certified recycling yard and a certificate of demolition completion issued by the respective State Maritime Board/ state government shall be obtained and submitted. 4.4 Eligibility of ship orders for credit note redemption Credit note redemption is permitted under the following conditions: • Credit note available at the time of order placement: If a credit note is available from the outset or at the time the order is placed, redemption is allowed. • Credit note obtained after order for new vessel is placed: If a credit note is obtained after the order has been placed, redemption is allowed any time before the final settlement by the Owner to the shipyard. • Credit note exercised for a new built vessel for which delivery was not made shall be allowed to transfer/ redeem for another vessel, within the validity period 4.5 Guidelines for the issuance and usage of credit notes Issuance of credit note(s)  Only one credit note will be issued against scrapping of one vessel.  This credit note will reflect the value which shall be used to redeem part of the payment for a ship ordered at an Indian shipyard. Usage of credit note(s): • Single-contract utilization: Each credit note must be applied in full to a single newbuilding contract. Partial utilization is not permitted. • No reimbursement for partial Use: No redemption or reimbursement shall be allowed for any unutilized portion of a partially consumed credit note. • Application to series orders• In the case of a series order involving multiple vessels under a single contract, one or more credit notes may be applied across multiple vessels. • Impact of partial cancellation If a series order is partially cancelled, any credit note that has been partially utilized will be deemed fully consumed. Only credit notes that remain entirely unutilized shall be released back to the shipyard or owner. Validity: - Credit Note will have a validity period (for redemption) of 3 (three) years from the completion date of scrapping the vessel. If the owner fails to redeem the credit note by not applying for redemption within the 3-years validity period, the note expires– absolving the Government of any obligation for payout. If the order of a ship(s) for which the redemption of credit note(s) gets fully/partially cancelled, only the fully unutilized credit notes would be released back to the shipyard/shipowner for future use within the original validity of the credit note(s).The note(s) which may have been partially utilized will be considered as consumed, subsequently will be not released back to the shipyard/shipowner. 4.6 Process for Issuance of Shipbreaking Credit Note Step 1 – Application for Credit Note on Scrapping: When a shipowner completes the scrapping of an eligible vessel in India, they may apply to the competent authority for issuance of a Shipbreaking Credit Note through a designated web-portal. The application must be submitted within three months from the last date of completion of scrapping the vessel as mentioned in Recycling Completion Certificate, issued by the respective State Maritime Board or State Government authority. The prescribed application format is provided at Annexure VI. The application should include the following details: 1. Owner’s Information: Name of the owner/company, Address and contact details 2. Details of the Scrapped Vessel: Name of vessel, Type, IMO number (if applicable), Flag Year of build, Gross Tonnage, Lightweight Tonnage (LDT – crucial for scrap), Name and address of the recycling yard, Date of commencement and completion of recycling 3. Contract Details: Copy of the contract between the ship recycling yard and the shipowner, Contract value4. Proof of Scrapping: Certificate of Recycling Completion issued by the respective State Maritime Board/State Government competent authority, Copy of the statutory Ships Recycling Certificate or ship deletion certificate 5. Scrap Value and Financial Details: Actual amount paid by the recycler to the owner for the vessel and A statement from a Chartered Accountant certifying the evidence of the bank transaction 6. Fair valuation for scrapping of the vessel by three approved International Valuers listed in Schedule–III. Step 2 – Verification and Issuance:  The competent authority shall issue a Shipbreaking Credit Note Certificate to the legal owner of the vessel, as recorded in the vessel’s Registration Certificate issued by the vessel’s flag administration (whether Indian or foreign). The Certificate (in the prescribed Annexure format) shall bear a unique serial number and shall specify the particulars of the vessel and the credits granted thereunder.”  Owner name (entity to whom note is issued).  Reference of scrapped ship  Date of completion of scrapping the vessel  The Credit Value (₹) which the owner is entitled to use, equal to 40% of determined scrap value.  The Validity of Credit Note  Signed by the issuing authority (DG Shipping). 4.7 Disbursement of Credit Note Amount At the time of delivery of the new vessel, the vessel owner shall submit the Credit Note to the shipyard for full and final settlement of the credit note value payable to the shipyard. Mechanism: Upon receiving the Credit Note from the vessel owner, the shipyard will, at the time of delivery, have an outstanding amount equivalent to the credit note value, which the owner does not pay (the owner pays the contract amount minus the credit note value). The shipyard shall then apply through the online portal to claim the corresponding amount of financial assistance from the Government by submitting the Credit Note along with other documents as specified in Annexure-II.4.8 Transferability, Holding and Trading of Credit Notes: The holder of the Credit Note (any ship owner who has scrapped the ship in India) may or may not themselves be building a new ship in India. Therefore, to ensure the credit note can be utilized, Credit Notes are made transferable:  A Credit Note can be transferred or sold to any other entity who wishes to use it towards building a new vessel in India. Transfer is affected via the electronic portal. For the transfer of a Credit Note to another buyer, following documents are required to be submitted as evidence to clearly demonstrate authenticity, consent, and traceability: 1. Credit Note Transfer Agreement o A legally executed agreement between the original holder and the new buyer, clearly stating: Credit Note number and value, Date of transfer, Terms and conditions of transfer, Signatures of both parties 2. Original Credit Note (endorsed to the new buyer) o Endorsement or annotation on the Credit Note mentioning the transferer's details. 3. Consent Letter from the Original Holder o A signed letter confirming the voluntary transfer of the Credit Note to the new buyer. 4. Acknowledgment from the New Buyer o Confirmation of acceptance of the Credit Note and liability for its usage as per scheme guidelines. 5. Intimation to DG Shipping o Copy of the official intimation or application to DG Shipping regarding the transfer, including DG Shipping’s acknowledgment (under the scheme). 6. Bank Transaction Details o Evidence of financial consideration for the transfer. 7. Updated Records on Web Portal o Acknowledgment that the Credit Note ownership has been updated in the official portal/system.  The original holder (e.g. a foreign shipowner) can thus monetize the credit note by selling it to, say, a shipping company or shipyard that plans to use it in India. The price of such sale is mutually decided in open market; Government of India is not involved in pricing the trade. Verification of the Credit Note’s authenticity,including its value and validity, shall be carried out by the buyer through the Directorate General of Shipping.  The transfer must be recorded with DG Shipping and NsBM should be notified. DG Shipping will update the Credit Note Ledger with the new owner’s name.  If the Credit Note is not transferred, the original holder can directly use it (if they themselves order a new ship in India).  Stacking of credit notes: Any credit note owner can stack up credit notes obtained from different shipbreaking contracts. Credit notes thus stacked can be clubbed to claim credit in a new shipbuilding order with an Indian Shipyard, subject to a maximum ceiling of 5% of the contract value of the new vessel to be built  Credit Notes are indivisible and must be utilized in full against a single new shipbuilding contract. Partial application is not permitted. 5. General Conditions. (a) In case of shipbuilding contracts signed for construction or manufacture of more than one vessel, only those vessels under the Contract whose date of delivery lies within the specified time period or such extended period permitted under Clause 3 above by the Competent Authority from the date of Contract shall be granted in principle approval by the Competent Authority for claiming financial assistance for the vessels mentioned therein: Provided that, only those vessels which are actually delivered within the specified time period from the date of Contract or within the extended period permitted under Clause 3 above by the Competent Authority shall be considered for release of financial assistance. Provided further that, if any supplementary contract/ addendum will be entered after March 31, 2036, the same will not be considered for the purpose of computation of financial assistance. (b) The major portion of the hull of the vessel for which financial assistance is claimed is to be constructed and assembled in India.(c) The assembly of the hull, installation and commissioning of the major machinery and equipment and tests/trials of the vessel is to be done in India. In case any test/trials are required to be conducted outside India, in terms of the Contract/owner requirements, the same shall also be acceptable for grant of financial assistance. (d) The shipyard applying for financial assistance under the policy for a vessel should not have availed any monetary support under any other policy or scheme of the Central or State Government for the said vessel. Such support shall not include: i. any exemptions of domestic taxes or import duties applicable on procurement of raw materials, components or capital goods, as the case may be; ii. any fiscal or monetary benefits arising from the location of shipyard; iii. any fiscal or monetary benefits arising from grant of infrastructure status to the shipyard; or, iv. any other fiscal or monetary benefit available by virtue of being a shipyard irrespective of the vessel being constructed/ repaired thereat. v. Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to neutralize the incidence of embedded duties and taxes in respect of exported goods. (e) Notwithstanding anything contained in these guidelines, only those vessels shall be eligible for grant of financial assistance for which the construction shall commence subsequent to the signing of valid contracts covered under these guidelines. (f) The shipyard applying for in principle approval as well as release of financial assistance under the policy should submit an affidavit as per the format prescribed in Annexure-I and Annexure-II respectively, including for compliance of conditions in sub- clauses (b) to (e) above. In case of application for release of financial assistance such affidavit shall also be accompanied with a certificate from the Recognized Organization as per the formats prescribed in Annexure-II. 6 . Grievance Redressal, Amendments, Review and Interpretation.(a) If any grievance arises from acts of commission or omission of DG Shipping as prescribed under these guidelines, the same shall be referred to the Institutional Mechanism, as notified by MoPSW in this regard. Further, any other grievance of the shipyard arising due to an issue not within the control of the shipyard may also be referred by DG Shipping to the IM with proper justification. MoPSW shall also notify the procedure for filing, as well as, resolution of such requests by the Institutional Mechanism. The decision of the Institutional Mechanism in all such cases shall be final. (b) Ministry of Ports, Shipping and Waterways shall review these guidelines every two years from the date of issue or the date of last review, as the case may be. However, this shall not affect the right of the Ministry to amend or modify these guidelines at any point of time including the Schedules and Annexures appended thereto. (c) In case any doubts arise with respect to interpretation of these guidelines, the same would be resolved with the approval of Hon’ble Minister of Shipping and such decision shall be final. *****SCHEDULE-I LIST OF VESSELS EXCLUDED FROM FINANCIAL ASSISTANCE POLICY 1. Vessels built for Indian buyer or ship owner, which are less than 24 meters in length, except the following: - i. Dredgers of length of 10 m and above (registered length / rule length as shown in the registry certificate / tonnage certificate). ii. Vessels, where main propulsion is by means of green fuels such as Methanol/ Ammonia / Hydrogen fuel cells, no length restriction is applicable. iii. vessels of 12 meters or above fitted with fully electric means of propulsion or vessels fitted with hybrid propulsion system. However, for export orders and vessels with fair price greater than 100 crore, minimum length restriction is not applicable. 2. Vessels made of wood irrespective of their lengths. 3. Vessels built for defense purposes or for use by Navy or Coast Guard. However, vessels like tugs, tankers, cargo ships and passenger ships that are not fitted with any weaponry, contracted for construction for foreign defence entities are also eligible. 4. Vessels built under contracts secured on nomination basis from the Central or State Government or their agencies including Central or State Public Sector Enterprises, except for cases not complying with Paragraph 1.(g)(iii)SCHEDULE-II LIST OF SPECIALIZED VESSELS 1. LNG Carrying Vessels. 2. LPG Carrying Vessels. 3. All Passenger Vessels under MS Act/SOLAS with a minimum capacity of 500 passengers. 4. Chemical Tankers. 5. Floating or Submersible Drilling or Production Platforms. 6. Floating, Production, Storage and Offloading (FPSO) units. 7. Floating, Storage and Offloading (FSO) units. 8. Floating, Storage, Regasification Units (FSRUs). 9. Mobile Offshore Drilling Unit (MODU) Rigs. 10. Mobile Offshore Production Units. 11. Self-Propelled Dredgers 12. Wind Turbine Installation Vessel. 13. Windfarm Service and Maintenance Vessel. 14. Self-Propelled Semi-Submersible Heavy Lift and Heavy Transport Vessel. 15. Cable laying Vessel. 16. Green vessels 17. Hybrid vessels 18. Vessels powered by Dual-fuel main engine (methanol, ammonia, LNG). 19. Diving support vessels with a moonpool *****SCHEDULE-III LIST OF INTERNATIONAL VALUERS Sl. No. Name of International Valuers 1. M/s. Barry Rogliano Salles, 11, Boulevard Jean Mermoz, 92200 Neuilly- sur-Seine, France. 2. M/s. Galbraiths Limited Shipbrokers, Bridge gate House 124-126 Borough High Street, London - SE1 1BL. 3. M/s. Gibson Shipbrokers, P.O. Box 278, Audrey House, 16-20 Ely Place, London - EC1N 6SN. 4. M/s. M3 Marine Group Pte. Ltd., 1 Commonwealth Lane, #09-19 ONE Commonwealth, Singapore –149544. 5. M/s. Arctic Offshore AS, Haakon VIIs gate 5 NO-0161 Oslo Norway, Email : osv@arctic.com 6. M/s. Affinity (Shipping) LLC, 44th Floor, The Leadenhall Building, 122, Leadenhall Street, London, EC3A 8EE. 7. M/s. Maersk Broker, Midtermolen, 1 DK-2100 Copenhagen, Denmark. 8. M/s. Clarkson Platou, Commodity Quay, St. Katharine Docks, London E1W 1BF 9. M/s. RBSA Advisors, 21-23, T.V. Industrial Estate, 248-A, S. K. Ahire Marg, Worli, Mumbai 400 030 INDIA 10. M/s. Keellock C.W & Co. Ltd, Fifth Floor, 2 London Wall Buildings, London Wall, London, United Kindom, ECM 5PP. Phone No. 44(0) 3031234500. 11 J.B Boda Insurance Surveyors & Loss Assessors Pvt. Ltd., Maker Bhavan No. 1, Sir, Thackersey Marg, Mumbai-400021 (India), Tel No. (22) 66314949/66314917. Email id: jbbmbi@jbbodamail.com SCHEDULE-III LIST OF INTERNATIONAL VALUERS12 Maritime Strategies International Ltd. 6 Baden Place, Crosby Row. London. SE1 1YW UK, Phone No. 44 20 79400070. 13 Simpson Spence Young Ltd., 50 Raffles Place #14-01/02, Singapore Land Tower. Singapore, Singapore 048623. Ph No. +65 68 547120. 14 Offshore Shipbrokers Limited. 17 Blossom Street, London E1 6PL UK. 44 207 3779774, 44 207 377 9775. Email id:chartering@offshore- shipbrokers.coms&p@offshore-shipbrokers.com 15 English White Shipping Ltd., London, Tel: +44 (0) 20 8879 7966 Mobile: +44 (0) 7788 457 395. Email: sandp@ewshipping.com Web: www.ewshipping.com. Address:2, Pointgarry Road, North Berwick, East Lothian, EH39 4ET 16 Ravindra K Reshamwala, 7/A PIL Court, 111 Maharshi Karve Road, Mumbai 400 020. Tel: 022 6131 7000. Email id: chartering@reshamwalashipbrokors.com *****SCHEDULE-IV RATES FOR FINANCIAL ASSISTANCE A. Base Rates of Financial Assistance: Contract Assistance Rate on Contract/Fair Vessel Category Value Range Price (₹) Non-specialized Vessel – Up to ₹100 15% of actual value in this range “Small normal vessel” crore 20% on value above ₹100 crore Non-specialized Vessel – Value above (15% on first ₹100 cr + 20% on “Large normal vessel” ₹100 crore remainder) 15% of value below ₹100 crore + Specialized Vessel – Any value 25% on value above ₹100 crore Notes:  “Specialized” vessels are those defined in Schedule II *****SCHEDULE V: Domestic content requirment in order to get SBFAS support The proposed financial assistance under SBFAS will be applicable for vessels which meet certain domestic content requirements as follows: Domestic content percentage SBFAS support Less than 30% Nil 30% to below 40% Pro rata. e.g. (39/40) *100 = 97.5% rounded up to 98% (30/40) *100 = 75% The decimal point will be rounded up to the nearest whole number. 40% and greater Full ANNEXURE-I PROCEDURE FOR OBTAINING “IN PRINCIPLE” APPROVAL 1.1. Within forty-five (45) days from the date of signing the contract, the shipyard shall apply under the policy on the SBFAS web portal and obtain a unique application number, which will be used for all future references.2 After the unique application number has been generated, in case of contracts for construction of standard vessels, the applicant shipyard shall submit the application for in-principle approval along with the details sought by the portal and the following documents, within forty-five(45) days from the date on which the unique application number is generated: (i). Notarized copy of the Contract signed between the shipyard and the ship owner or buyer for construction of the vessel; (ii). Technical specifications of the vessel to be constructed; (iii). Bank Account details of the shipyard agreed under the contract. (iv). Affidavit signed by the Proprietor/Partner/Chairman/CMD/MD/CEO of the shipyard, duly authorized in this regard, as per the format attached at Annexure- IA. (v). Credit Note (if available) 3.1. In case of contracts for construction of specialized vessels, or, Non-specialized vessels, along with generation of the unique application number the applicant shall simultaneously obtain details of five valuers, randomly selected by the portal from the list of valuers indicated in Schedule-III of these guidelines, for assessment of fair value of the vessels. 3.2 The applicant shipyard shall submit the application for in- principle approval, along with three valuation reports (from amongst the five valuers provided by the portal), other details sought by the portal, and the following documents, within forty- five (45) days from the date on which details of valuers are generated by the portal: (i). Notarized copy of the Contract signed between the shipyard and the ship owner or buyer for construction of the vessel; (ii). Technical specifications of the vessel to be constructed; (iii). Bank Account details of the shipyard agreed under the contract. (iv). Affidavit signed by the Proprietor/Partner/Chairman/CMD/MD/CEO of the shipyard, duly authorized in this regard, as per the format attached at Annexure-IA.3.4. In case out of the five valuers provided by the portal, more than two valuers either do not respond or are not willing to assess the value, the shipyard shall indicate the same on the portal and request for fresh set of five valuers within forty- five (45) days from the date on which details of previous set of valuers are generated by the portal. The portal shall reselect another set of five valuers to assess the values upon such submission by the shipyard. The applicant shipyard shall submit the application for in-principle approval, along with the three valuation reports (from amongst the five valuers provided by the portal) and requisite documents/ details within forty-five (45) days from the date on which details of the fresh set of five valuers are generated by the portal. The applicant shipyard shall submit the application for in- principle approval, along with three valuation reports (from amongst the five valuers provided by the portal) and requisite documents /details within forty-five (45) days from the date on which details of valuers are generated by the portal. 3.5 Provided that, if in spite of having exhausted the entire list of valuers provided in Schedule-III of the guidelines, by repeatedly following the procedure indicated in para 3.4, three valuations cannot be obtained from the international valuers by a shipyard, then the Directorate General of Shipping shall after satisfying itself about the inability of the applicant shipyard to obtain three valuations, shall constitute an Expert Committee to recommend further course of action to the Ministry of Ports, Shipping and Waterways. 4.1. Within thirty (30) days of final submission of application for obtaining in- principle approval, along with the three valuation reports, the competent authority shall scrutinize the application and either grant or decline in-principle approval to the applicant shipyard. 4.2. Provided that in case the competent authority notices any deficiency in the requisite documents, it may indicate the same to the shipyard within thirty (30) days from the date of final submission of the application and seek clarification through web portal only. 4.3. In cases where such clarifications are sought, the applicant shipyard shall make good the deficiency and/or provide clarification within thirty (30) days of receipt of such communication from the competent authority through web portal only.4.4. On receipt of such clarification, the competent authority shall make a decision for grant or denial of in-principle approval on the said application within thirty (30) days of receipt of such clarification. 5. In case of denial either under aforementioned para 4.1 or para 4.4, the reasons for such denial shall be communicated by the Competent Authority to the applicant shipyard, along with the final decision, within thirty (30) days and ninety (90) days, respectively, of final submission of application for obtaining in-principle approval. ***** ANNEXURE-IA DRAFT AFFIDAVIT FORMAT I, ________ (insert name), son/daughter of ________ (insert Father’s name), being the authorized signatory of ________(insert name of the Shipyard) (hereinafter referred to as the “Shipyard”) do hereby solemnly affirm and state as under: 1. That I am the ________ (position / rank) of ________ (insert name of Shipyard) and am competent to swear this affidavit. 2. I state that ________ (insert name of the Shipyard) is a company/partnership firm/proprietorship firm registered under the applicable laws of the country and situated in ________ (insert name of the State) and the activities are carried out/operated within the territories of India.3. I state that the shipyard has executed a contract dated ________(insert date of contract) with M/s.________ (insert name and address of the ship owner/buyer) for construction of ________ (insert details of the vessel like Hull No, DWT and type/category of the vessel) (hereinafter referred to as the “Vessel”).I state that the order is an export/domestic order and has been obtained on competitive bidding/negotiated/nomination basis. 4. I state that as per the contract the following vessel (s) have to be delivered to the ship owner M/s. ________ (insert name of the buyer) on the following dates, namely:- (i) (Identification Details of Vessel 1) on ________ (contractual delivery date). (ii) (Identification Details of Vessel 2) on ________ (contractual delivery date). 5. I state that the Shipyard shall use the following Bank Accounts for all financial transactions with the buyer/ship owner, namely:- (i) Bank Account No. _______ (insert bank account number) opened in _________ (insert name and address of the Branch of the Bank) in the name of ____________ (insert name of the shipyard). (ii) Bank Account No. _______ (insert bank account number) opened in _________ (insert name and address of the Branch of the Bank) in the name of ____________ (insert name of the shipyard). 5.1. I further state that any change in the Bank Account number shall be intimated by me or the authorized signatory of the Shipyard to the Government of India within seven (7) days of such change. 6. I state that the shipyard is not claiming any monetary support under any other policy or scheme of the Central or State Government for the said vessel. Such support shall not include: (i) any exemptions of domestic taxes or import duties applicable on procurement of raw materials, components or capital goods, as the case may be; (ii) any fiscal or monetary benefits arising from the location of shipyard; (iii) any fiscal or monetary benefits arising from grant of infrastructure status to the shipyard; or,(iv) any other fiscal or monetary benefit available by virtue of being a shipyard irrespective of the vessel being constructed/ repaired thereat. (v) Any benefits or grants availed under Research & Development (R&D) promotion schemes, unless specifically linked to the vessel in question. (vi) Any financial support received for manpower training or capacity building that is not vessel-specific. (vii) Any interest subvention on loans or credit guarantee support under central/state government schemes. (viii) Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to neutralize the incidence of embedded duties and taxes in respect of exported goods. 7. I state that the construction of the subject vessel (s) has/have not commenced prior to signing of contract dated ________ (Date of contract as mentioned in Para 3). 8. I state that the following documents have been furnished by the Shipyard in support of its application for release of financial assistance under Financial Assistance Policy of the Government of India, namely:-  Notarized copy of the Contract signed between the shipyard and the ship owner or buyer for construction of the vessel;  Technical specifications of the vessel to be constructed;  Bank Account details of the shipyard agreed under the contract. 9. I state that all the above documents are true copies of their originals and are genuine. I undertake to furnish any other/further/additional documents that may be asked by the Government of India for conveying in principle approval to the Shipyard. VERIFICATION Verified at ________(insert place) on this the ________ day of ________ 20__ that the contents of the foregoing affidavit are true and correct to the best of my knowledge and no part of it is false and nothing material has been concealed therefrom. DEPONENTNOTE:- The affidavit shall be executed after discharging the Stamp Duty Liability on the affidavit at the rate prescribed in the applicable State Stamp Act or the Indian Stamp Act whichever is applicable. *****ANNEXURE-II-1 PROCEDURE FOR RELEASE OF FINANCIAL ASSISTANCE (AFTER LAUNCHING) 1.1 Within thirty (30) days from the date of launching the vessel, the shipyard, using its unique application number, shall apply for release of first stage of financial assistance under the policy on the web portal and submit electronic copies of the following documents, namely:-  Certificate of Actual Payment received for a vessel duly certified by a Chartered Account registered with Institute of Chartered Accountants of India.  Certificate of Actual payment received by the recipient bank. The certificate should be provided as per the format provided in Annexure III B, on the bank’s official letterhead, and must be duly signed and stamped by an authorized official of the bank.  Bank Guarantee issued by an Indian scheduled commercial bank, in favour of Directorate General of Shipping for an amount equal to the financial assistance claimed at this stage. The claim amount is limited to the rate of financial assistance for the applicable financial year, as received for that vessel by the shipyard, as certified by the Chartered accountant, or 50% of the contract price, whichever is less.  Affidavit as per the format in Annexure-IIA-1.  Certification from the Recognized Organization in the format attached at Annexure- IIB.  Indemnity Bond as per the format prescribed in Annexure-IIC1 signed by the Proprietor, Partner, Chairman, CMD, MD or CEO of the shipyard, duly authorized in this regard, as per the format attached at Annexure-IIC1 interalia stating that in case of any of the documents/information furnished in the claim for financial assistance for the vessel is/are found to be incorrect/false at a later stage, the shipyard shall return the financial assistance obtained along with interest @ 18% per annum computed from the date of grant of such financial assistance till the date of repayment. Beyond Ninety (90) days, however, 18% interest compounded quarterly would be payable by the shipyard. 2.1. Within forty-five (45) days of final submission of application for financial assistance, the competent authority shall scrutinize the application and either permit or deny release of financial assistance to the applicant shipyard.2.2. Provided that in case the competent authority notices any deficiency in the requisite documents, it may indicate the same to the shipyard within forty-five (45) days from the date of final submission of the application and seek clarification. 2.2.1 If any document required to be submitted along with the application within requisite time under clause 1.1. of guidelines above, is not submitted along with the application, then a deficiency letter may be issued and the applicant may be given 30 days to submit that document. 2.3. In cases where such clarifications are sought, the applicant shipyard shall make good the deficiency and/or provide clarification within thirty (30) days of receipt of such communication from the competent authority. 2.4. On receipt of such clarification, the competent authority shall make a decision to either permit or decline release of financial assistance on the said application within thirty (30) days of receipt of such clarification. 2.5. In case the competent authority proposes to deny release of financial assistance to the applicant shipyard, the competent authority shall hear the applicant shipyard in person and after such hearing, decide to either permit or deny release of financial assistance to the applicant shipyard. In case of denial, the competent authority shall also record reasons for such denial and communicate the same to the shipyard. ANNEXURE-II-2 PROCEDURE FOR RELEASE OF FINANCIAL ASSISTANCE (POST DELIVERY STAGE, PHASE-I)1.1 Within sixty (60) days from the date of delivery of the vessel, the shipyard, using its unique application number, shall apply for release of financial assistance under the policy on the web portal and submit electronic copies of the following documents, namely:-  Protocol of Delivery and Acceptance of the Vessel.  Certificate of Actual Payment received for a vessel duly certified by a Chartered Account registered with Institute of Chartered Accountants of India.  Certificate of Actual payment received by the recipient bank. The certificate should be provided as per the format provided in Annexure III B2, on the bank’s official letterhead, and must be duly signed and stamped by an authorized official of the bank.  Builder’s Certificate.  In case of export, Proof of export of the vessel in the form of:  Export Clearance Certificate issued by Customs authorities.  Shipping Bill  Provisional/Final Registration Certificate of the vessel, as the case may be.  Affidavit as per the format in Annexure-IIA2.  Certification from the Recognized Organization in the format attached at Annexure- IIB'.  Indemnity Bond as per the format prescribed in Annexure-IIC2 signed by the Proprietor, Partner, Chairman, CMD, MD or CEO of the shipyard, duly authorized in this regard, as per the format attached at Annexure-IIC interalia stating that in case of any of the documents/information furnished in the claim for financial assistance for the vessel is/are found to be incorrect/false at a later stage, the shipyard shall return the financial assistance obtained along with interest @ 18% per annum computed from the date of grant of such financial assistance till the date of repayment. Beyond Ninety (90) days, however, 18% interest compounded quarterly would be payable by the shipyard. 2.1. Within forty-five (45) days of final submission of application for financial assistance, the competent authority shall scrutinize the application and either permit or deny release of financial assistance to the applicant shipyard.2.2. Provided that in case the competent authority notices any deficiency in the requisite documents, it may indicate the same to the shipyard within forty-five (45) days from the date of final submission of the application and seek clarification. 2.2.1 If any document required to be submitted along with the application within requisite time under clause 1.1. of guidelines above, is not submitted along with the application, then a deficiency letter may be issued and the applicant may be given 30 days to submit that document. 2.3. In cases where such clarifications are sought, the applicant shipyard shall make good the deficiency and/or provide clarification within thirty (30) days of receipt of such communication from the competent authority. 2.4. On receipt of such clarification, the competent authority shall make a decision to either permit or decline release of financial assistance on the said application within thirty (30) days of receipt of such clarification. 2.5. In case the competent authority proposes to deny release of financial assistance to the applicant shipyard, the competent authority shall hear the applicant shipyard in person and after such hearing, decide to either permit or deny release of financial assistance to the applicant shipyard. In case of denial, the competent authority shall also record reasons for such denial and communicate the same to the shipyard. ***** ANNEXURE-II-3 PROCEDURE FOR RELEASE OF FINANCIAL ASSISTANCE (POST DELIVERY, Phase-II) 1.1 In case of contracts, wherein any payment is deferred by the buyer or any payment is withheld as performance guarantee as per the terms stated in the shipbuilding contract initially submitted to Directorate General of Shipping, theshipyard shall apply for release of financial assistance, limited to only two instances, in the following manner; I. At the first instance, the Initial application for the release of financial assistance shall be submitted, as mentioned in paragraph 1.1 of Annexure- II1, within 30 days of the launching of vessel, for the portion of payment received from the buyers. II. At the second instance, the Initial application for the release of financial assistance shall be submitted, as mentioned in paragraph 1.1 of Annexure- II2, within 60 days of the delivery of vessel, for the portion of payment received from the buyers. III. At the third instance, the final application for the release of the remaining part of financial assistance to cater for the deferred payment or the performance guarantee money which is withheld by the buyer, shall be submitted, along with following documents; a. Certificate of Payments received for the vessel duly certified by a Chartered Account registered with Institute of Chartered Accountants of India, as per Annexure IIIA b. Certificate of Actual payment received by the recipient bank. The certificate should be provided as per the format provided in Annexure III B, on the bank’s official letterhead, and must be duly signed and stamped by an authorized official of the bank. c. Audited balance sheet of the shipyard for the completed financial years between the first application and the final application for the release of financial assistance. d. Affidavit as per annexure -IV 1.2 In no case final Application for the fund release shall be made exceeding three (3) years from the end of the financial year in which the delivery of the vessel was made. 1.3 Time lines for processing of final application for fund release shall adhere to the same steps as described in Para 2.2to 2.5. ANNEXURE-IIA-1DRAFT AFFIDAVIT FORMAT (after launching) I, ________ (insert name), son/daughter of ________ (insert Father’s name), being the authorized signatory of ________(insert name of the Shipyard) (hereinafter referred to as the “Shipyard”) do hereby solemnly affirm and state as under: 1. That I am the ________ (position / rank) of ________ (insert name of Shipyard) and am competent to swear this affidavit. 2. I state that ________ (insert name of the Shipyard) is a company/partnership firm/proprietorship firm registered under the applicable laws of the country and situated in ________ (insert name of the State) and the activities are carried out/operated within the territories of India. 3. I state that the shipyard has executed a contract dated ________(insert date of contract) with M/s.________ (insert name and address of the ship owner/buyer) for construction of ________ (insert details of the vessel like Hull No, DWT and type/category of the vessel) (hereinafter referred to as the “Vessel”).I state that the order is an export/domestic order and has been obtained on competitive bidding/negotiated/nomination basis. 4. I state that as per the contract the following vessel (s) have been a. launched on the following dates namely:- (i) (Identification Details of Vessel 1) on ________ (launching date). (ii) (Identification Details of Vessel 2) on ________ (launching date) 5. I state that the Shipyard has obtained the foreign currency in the following Bank Accounts for all financial transactions with the buyer/ship owner, namely:- (i) Bank Account No. _______ (insert bank account number) opened in _________ (insert name and address of the Branch of the Bank) in the name of ____________ (insert name of the shipyard).(ii) Bank Account No. _______ (insert bank account number) opened in _________ (insert name and address of the Branch of the Bank) in the name of ____________ (insert name of the shipyard). …. 6. I state that : (a) The major portion of the hull of the vessel has been constructed and assembled in India. (b) The assembly of the hull, installation and commissioning of the major machinery and equipment, if any, has been done in India. (c) The shipyard has not claimed and will not claim any monetary support under any other policy or scheme of the Central or State Government for the said vessel. Such support shall not include: (i) any exemptions of domestic taxes or import duties applicable on procurement of raw materials, components or capital goods, as the case may be; (ii) any fiscal or monetary benefits arising from the location of shipyard; (iii) any fiscal or monetary benefits arising from grant of infrastructure status to the shipyard; or, (iv) any other fiscal or monetary benefit available by virtue of being a shipyard irrespective of the vessel being constructed/ repaired thereat. (v) any fiscal or monetary benefits arising from Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to neutralize the incidence of embedded duties and taxes in respect of exported goods. (d) The construction of the vessel (s) mentioned in Para 4 above has commenced after the signing of the said contract on __________ (Date of contract as mentioned in Para 3 above. 7. I state that the following documents have been furnished by the Shipyard in support of its application for release of financial assistance, namely:- Certificate of Actual Payment received for a vessel duly certified by a Chartered Account registered with Institute of Chartered Accountants of India.  Certificate of Actual payment received by the recipient bank. The certificate should be provided as per the format provided in Annexure III B1, on the bank’s official letterhead, and must be duly signed and stamped by an authorized official of the bank.  Bank Guarantee issued by an Indian scheduled commercial bank, for an amount equal to the financial assistance claimed at this stage,  Affidavit as per the format in Annexure-IIA1.  Certification from the Recognized Organization in the format attached at Annexure- IIB1.  Indemnity Bond as per the format prescribed in Annexure-IIC signed by the Proprietor, Partner, Chairman, CMD, MD or CEO of the shipyard, duly authorized in this regard, as per the format attached at Annexure-IIC1  8. The Shipyard hereby affirms and undertakes that the Bank Guarantee (BG) submitted in favour of the Directorate General of Shipping shall be liable for encashment, at the sole discretion of the Directorate General of Shipping, in the event of any default, non-compliance, or breach of the Shipbuilding Financial Assistance (SBFA) Policy guidelines by the Shipyard, and the Directorate General of Shipping shall have full authority to invoke and encash the said Bank Guarantee without any demur, protest, or contest from the Shipyard. 8. I state that all the above documents are true copies of their originals and are genuine. I undertake to furnish any other/further/additional documents that may be asked by the Government of India for release of financial assistance to the Shipyard. VERIFICATION Verified at ________(insert place) on this the ________ day of ________ 20__ that the contents of the foregoing affidavit are true and correct to the best of my knowledge and no part of it is false and nothing material has been concealed therefrom.DEPONENT NOTE :- The affidavit shall be executed after discharging the Stamp Duty Liability on the affidavit at the rate prescribed in the applicable State Stamp Act or the Indian Stamp Act whichever is applicable. ANNEXURE-IIA-2 DRAFT AFFIDAVIT FORMAT (after delivery) I, ________ (insert name), son/daughter of ________ (insert Father’s name), being the authorized signatory of ________(insert name of the Shipyard) (hereinafter referred to as the “Shipyard”) do hereby solemnly affirm and state as under: 1. That I am the ______ (position / rank) of _______ (insert name of Shipyard) and am competent to swear this affidavit. 2. I state that ________ (insert name of the Shipyard) is a company/partnership firm/proprietorship firm registered under the applicable laws of the country and situated in ________ (insert name of the State) and the activities are carried out/operated within the territories of India. 3. I state that the shipyard has executed a contract dated ________(insert date of contract) with M/s.________ (insert name and address of the ship owner/buyer) for construction of ________ (insert details of the vessel like Hull No, DWT and type/category of the vessel) (hereinafter referred to as the “Vessel”).I state that the order is an export/domestic order and has been obtained on competitive bidding/negotiated/nomination basis. 4. I state that as per the contract the following vessel (s) have been delivered to the ship owner M/s. ________ (insert name of the buyer) on the following dates*, namely:- (i) (Identification Details of Vessel 1) on ________ (actual delivery date).(ii) (Identification Details of Vessel 2) on ________ (actual delivery date). 5. I state that the Shipyard has obtained the foreign currency in the following Bank Accounts for all financial transactions with the buyer/ship owner, namely:- (i) Bank Account No. _______ (insert bank account number) opened in _________ (insert name and address of the Branch of the Bank) in the name of ____________ (insert name of the shipyard). (ii) Bank Account No. _______ (insert bank account number) opened in _________ (insert name and address of the Branch of the Bank) in the name of ____________ (insert name of the shipyard). …. 6. I state that : (a) The major portion of the hull of the vessel has been constructed and assembled in India. (b) The assembly of the hull, installation and commissioning of the major machinery and equipment has been done in India. The tests/trials of the complete vessel have been done at ___________________ based on the owner’s requirements/Contract. (c) The shipyard has not claimed and will not claim any monetary support under any other policy or scheme of the Central or State Government for the said vessel. Such support shall not include: (i) any exemptions of domestic taxes or import duties applicable on procurement of raw materials, components or capital goods, as the case may be;(ii) any fiscal or monetary benefits arising from the location of shipyard; (iii) any fiscal or monetary benefits arising from grant of infrastructure status to the shipyard; or, (iv) any other fiscal or monetary benefit available by virtue of being a shipyard irrespective of the vessel being constructed/ repaired thereat.(v) any fiscal or monetary benefits arising from Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to neutralize the incidence of embedded duties and taxes in respect of exported goods. (d) The construction of the vessel (s) mentioned in Para 4 above has commenced after the signing of the said contract on __________ (Date of contract as mentioned in Para 3 above. 7. I state that the following documents have been furnished by the Shipyard in support of its application for release of financial assistance, namely:-  Protocol of Delivery and Acceptance of the Vessel.  Certificate of Actual Payment received for a vessel duly certified by a Chartered Account registered with Institute of Chartered Accountants of India.  Builder’s Certificate.  In case of export, Proof of export of the vessel in the form of:  Export Clearance Certificate issued by Customs authorities.  Shipping Bill  Provisional/Final Registration Certificate of the vessel, as the case may be.  Affidavit as per the format in Annexure-IIA.  Certification from the Recognized Organization in the format attached at Annexure- IIB.  Indemnity Bond signed by the Proprietor, Partner, Chairman, CMD, MD or CEO of the shipyard, duly authorized in this regard, as per the format attached at Annexure-IIC. 8. I state that all the above documents are true copies of their originals and are genuine. I undertake to furnish any other/further/additional documents that may be asked by the Government of India for release of financial assistance to the Shipyard. VERIFICATIONVerified at ________(insert place) on this the ________ day of ________ 20__ that the contents of the foregoing affidavit are true and correct to the best of my knowledge and no part of it is false and nothing material has been concealed therefrom. DEPONENT NOTE :- The affidavit shall be executed after discharging the Stamp Duty Liability on the affidavit at the rate prescribed in the applicable State Stamp Act or the Indian Stamp Act whichever is applicable. ***** ANNEXURE -IIB (Letter Head of the Recognized Organization) To, [The competent authority] Subject: Inspection Certificate for Vessel No. _______ after launchingThis is to certify that: (a) The above vessel has been inspected by the surveyors of the Recognized Organization to verify that the said vessel has been built in accordance with technical specification as per the initial contract dated _______ and found to be conforming to the Contractual Specification as on the date of launching, as mentioned below. (b) It is also certified that the construction of the vessel has commenced on _______. (c) It is also certified that the vessel has been launched on _________. (d) It is further certified that the major portion of the hull of the vessel at the date of launching has been constructed and assembled in India. (e) Deviations from the Contract Specifications are as listed below (i)______________________________ (ii) _____________________________ Yours sincerely, (Name of the authorized signatory) Enclosures: As above. Copy to: ________________ (insert name of the Shipyard) ANNEXURE - IIB'1 (Letter Head of the Recognized Organization) To, [The competent authority] Subject: Inspection Certificate for Vessel No. _______, post delivery This is to certify that: (a) The above vessel has been inspected by the surveyors of the Recognized Organization to verify that the said vessel has been built in accordance with technical specification as per the initial contract dated _______ and found to be conforming to the Contractual Specification.(b) It is also certified that the construction of the vessel has commenced on _______. (c) It is also certified that financial assistance for the vessel has been* / has not been* claimed after the launching of the vessel. (* - strike off as appropriate) (c) It is further certified that the major portion of the hull of the vessel has been constructed and assembled in India. The assembly of the hull, installation and commissioning of the major machinery and equipment has been done in India. The tests/trials of the complete vessel have been done at ___________________ based on the owner’s requirements/Contract. (d) Main Particulars of the ship, Report of Survey and Survey Findings are placed at Annexure-IIB1, Annexure-IIB2 and Annexure-IIB3 respectively. Yours sincerely, (Name of the authorized signatory) Enclosures: As above. Copy to: ________________ (insert name of the Shipyard) MAIN PARTICULARS Owner : __________________ IMO No. : __________________ Name of Shipyard : __________________ Yard No. : __________________ Contract Ref. : __________________ Gross Tonnage : __________________ Type of Vessel : __________________ Main Dimensions:-Length over all : __________________ m Breadth moulded : __________________ m Depth : __________________ m Class Notation: __________________ Descriptive Note: __________________ Issued at: __________________ ANNEXURE-IIB'2 REPORT OF SURVEY Upon the request from Shipbuilder M/s.__________________, India, the undersigned Surveyor carried out Survey of their__________________ vessel ____________________(Yard No. __________________) to verify that the vessel, as built, conforms to the Contract Specification, during the period __________________ date__________________, at the Shipyard’s premises at (__________________ location__________________). The following have been observed/ verified as part of the above survey: (a)__________________ (b)__________________ (c)__________________ (d)__________________ (e)__________________ (f)__________________ (g)__________________ Sd/- (Name of the authorized signatory) *****ANNEXURE-IIB'3 DEVIATIONS FROM THE CONTRACT SPECIFICATION ___________________________________________________________________ ___ ___________________________________________________________________ ___ Sd/- (Name of the authorized signatory) ***** ANNEXURE -IIC1 FORMAT OF THE INDEMNITY BOND INDEMNITY BOND (AFTER LAUNCHING) 1. THIS INDEMNITY BOND executed at __________________ on this __________________ day of __________________year, by __________________. (insertname of the Shipyard), through its, __________________ (insert name ofproprietor/partner/Chairman/CMD/MD/CEO), son/daughter of __________________ (insert father’s name) of__________________(insert name and address of the Shipyard) (hereinafter called “the Shipyard”) IN FAVOUR OF Government of India represented through Ministry of Shipping, Transport Bhavan, 1, Transport Bhavan, New Delhi- 110 001 (hereinafter called the “Government”). WHEREAS__________________(insert name of shipyard)(“Shipyard”) had executed a Contract with M/s. __________________ (insert full name and address of the buyer) vide agreement dated__________________for construction of __________________(insert details of the vessel like Hull No, DWT and type/category of the vessel).The order had been obtained on competitive bidding/negotiation/nomination basis. AND WHEREAS the Shipyard has applied to the Ministry for release of financial assistance in respect of the Vessel, and obtained the in principle approval on __________________. AND WHEREAS on the basis of the documents furnished, the Shipyard is eligible for __________________%financial assistance in respect of the Vessel on the following terms and conditions: (a) The documents furnished by the Shipyard are true copies of their originals and are genuine. (b) The vessel for which financial assistance is being claimed by the Shipyard has been built in accordance with the technical specification reflected in the initial contract document and there has been no major variation in the same. (c) The major portion of the hull of the vessel at launching stage for which financial assistance is claimed has been constructed and assembled in India. The assembly of the hull, and the installation and commissioning of the major machinery and equipment, if any of the vessel has been done in India. (d) The construction of the said vessel (s) has commenced after the date of signing of contract.(e) The Shipyard shall furnish any other further/additional documents that may be required by the Government for release of financial assistance to the shipyard. (f) The amount of financial assistance that may be received by the Shipyard is not full and final settlement at the launching stage. Shipyard shall submit separate application for full and final settlement after the delivery of the vessel in accordance with these SBFA guidelines. (g) The Shipyard hereby affirms and undertakes that the Bank Guarantee (BG) submitted in favour of the Directorate General of Shipping shall be liable for encashment, at the sole discretion of the Directorate General of Shipping, in the event of any default, non-compliance, or breach of the Shipbuilding Financial Assistance (SBFA) Policy guidelines by the Shipyard, and the Directorate General of Shipping shall have full authority to invoke and encash the said Bank Guarantee without any demur, protest, or contest from the Shipyard. NOW, THEREFORE, THESE PRESENTWITNESSTH: That in pursuance of conditions hereinbefore mentioned, which the Shipyard has accepted without any condition or reservation, the Shipyard hereby agrees to indemnify and keep harmless the Government against all damages, losses, claims, costs, etc. which the Government may have to suffer, undergo, incur as a result of any misrepresentation of any information to the Government for release of financial assistance to the Shipyard for the Vessel. Further, the financial assistance received by the Shipyard would be returned with interest@18 percent per annum, from the date of grant of financial assistance, if any information/document furnished by the Shipyard for claiming such assistance is found to be incorrect. (PROPRIETOR/PARTNER/CMD/CHAIRMAN/CEO/MD) Witnesses:1. …………………..(Name and sign) 2. …………………..(Name and sign) NOTE :- The affidavit shall be executed after discharging the Stamp Duty Liability on the affidavit at the rate prescribed in the applicable State Stamp Act or the Indian Stamp Act whichever is applicable. ANNEXURE -IIC2 FORMAT OF THE INDEMNITY BOND (POST DELIVERY) INDEMNITY BOND 1. THIS INDEMNITY BOND executed at __________________ on this __________________ day of __________________year, by __________________. (insertname of the Shipyard), through its, __________________ (insert name of proprietor/partner/Chairman/CMD/MD/CEO), son/daughter of __________________ (insert father’s name) of__________________(insert name and address of the Shipyard) (hereinafter called “the Shipyard”) IN FAVOUR OF the Government of India represented through Ministry of Shipping, Transport Bhavan, 1, Transport Bhavan, New Delhi- 110 001 (hereinafter called the “Government”).WHEREAS__________________(insert name of shipyard)(“Shipyard”) had executed a Contract with M/s. __________________ (insert full name and address of the buyer) vide agreement dated__________________for construction of __________________(insert details of the vessel like Hull No, DWT and type/category of the vessel).The order had been obtained on competitive bidding/negotiation/nomination basis. AND WHEREAS the vessel was due for delivery on __________________ as per paragraph__________________ of the contract and has been delivered to the ship owner i.e. M/s. __________________ (insert name of the Buyer) on __________________vide Protocol of Delivery and Acceptance dated __________________. AND WHEREAS the Shipyard has applied to the Ministry for release of financial assistance in respect of the Vessel, and obtained the in principle approval on __________________. AND WHEREAS on the basis of the documents furnished, the Shipyard is eligible for __________________%financial assistance in respect of the Vessel on the following terms and conditions: a. The documents furnished by the Shipyard are true copies of their originals and are genuine. b. The vessel for which financial assistance is being claimed by the Shipyard has been built in accordance with the technical specification reflected in the initial contract document and there has been no major variation in the same. c. The major portion of the hull of the vessel for which financial assistance is claimed has been constructed and assembled in India. The assembly of the hull, installation and commissioning of the major machinery and equipment of the vessel has been done in India. The test/trials have been done in India/outside India, in terms of the Contract/owner requirements. d. The construction of the said vessel (s) has commenced after the date of signing of contract.e. The Shipyard shall furnish any other further/additional documents that may be required by the Government for release of financial assistance to the shipyard. f. The amount of financial assistance that may be received by the Shipyard shall be the full and final settlement of the claim of the shipyard towards financial assistance and the shipyard shall have no further claim from the Government in this regard. g. The Shipyard shall accept the financial assistance as assessed by the Government as full and final settlement of their claim. NOW, THEREFORE, THESE PRESENTWITNESSTH: That in pursuance of conditions hereinbefore mentioned, which the Shipyard has accepted without any condition or reservation, the Shipyard hereby agrees to indemnify and keep harmless the Government against all damages, losses, claims, costs, etc. which the Government may have to suffer, undergo, incur as a result of any misrepresentation of any information to the Government for release of financial assistance to the Shipyard for the Vessel. Further, the financial assistance received by the Shipyard would be returned with interest@18 percent per annum, from the date of grant of financial assistance, if any information/document furnished by the Shipyard for claiming such assistance is found to be incorrect. (PROPRIETOR/PARTNER/CMD/CHAIRMAN/CEO/MD) Witnesses: 1. …………………..(Name and sign) 2. …………………..(Name and sign)NOTE :- The affidavit shall be executed after discharging the Stamp Duty Liability on the affidavit at the rate prescribed in the applicable State Stamp Act or the Indian Stamp Act whichever is applicable. ***** ANNEXURE -IIC3 FORMAT OF THE INDEMNITY BOND INDEMNITY BOND [At Stage II application] 1. THIS INDEMNITY BOND executed at __________________ on this __________________ day of __________________year, by __________________. (insertname of the Shipyard), through its, __________________ (insert name of proprietor/partner/Chairman/CMD/MD/CEO), son/daughter of __________________ (insert father’s name) of__________________(insert name and address of the Shipyard) (hereinafter called “the Shipyard”) IN FAVOUR OF Government of India represented through Ministry of Ports, Shipping and Waterways, Transport Bhavan, 1, Transport Bhavan, New Delhi- 110 001 (hereinafter called the “Government”). WHEREAS__________________(insert name of shipyard)(“Shipyard”) had executed a Contract with M/s. __________________ (insert full name and address of the buyer) vide agreement dated__________________for construction of__________________(insert details of the vessel like Hull No, DWT and type/category of the vessel).The order had been obtained on competitive bidding/negotiation/nomination basis. AND WHEREAS the vessel was due for delivery on __________________ as per paragraph__________________ of the contract and has been delivered to the ship owner i.e. M/s. __________________ (insert name of the Buyer) on __________________vide Protocol of Delivery and Acceptance dated __________________. AND WHEREAS on the basis of the documents furnished, the Shipyard is eligible for shipbreaking credit note in respect of the Vessel on the following terms and conditions: (a) The documents furnished by the Shipyard are true copies of their originals and are genuine. (b) The vessel for which shipbreaking credit note is being claimed by the Shipyard has been built in accordance with the technical specification reflected in the initial contract document and there has been no major variation in the same. (c) The major portion of the hull of the vessel for which financial assistance is claimed has been constructed and assembled in India. The assembly of the hull, installation and commissioning of the major machinery and equipment of the vessel has been done in India. The test/trials have been done in India/outside India, in terms of the Contract/owner requirements. (d) The construction of the said vessel (s) has commenced after the date of signing of contract. (e) The Shipyard shall furnish any other further/additional documents that may be required by the Government for release of value of shipbreaking credit note to the shipyard. (f) The amount of shipbreaking credit note that may be received by the Shipyard shall be the full and final settlement of the claim of the shipyard towards release of valuation of credit note and the shipyard shall have no further claim from the Government in this regard.(g) The Shipyard shall accept the value of shipbreaking credit note as assessed by the Government as full and final settlement of their claim. NOW, THEREFORE, THESE PRESENTWITNESSTH: That in pursuance of conditions hereinbefore mentioned, which the Shipyard has accepted without any condition or reservation, the Shipyard hereby agrees to indemnify and keep harmless the Government against all damages, losses, claims, costs, etc. which the Government may have to suffer, undergo, incur as a result of any misrepresentation of any information to the Government for release of financial assistance to the Shipyard for the Vessel. Further, the financial assistance received by the Shipyard would be returned with interest@18 percent per annum, from the date of grant of financial assistance, if any information/document furnished by the Shipyard for claiming such assistance is found to be incorrect. (PROPRIETOR/PARTNER/CMD/CHAIRMAN/CEO/MD) Witnesses: 1. …………………..(Name and sign) 2. …………………..(Name and sign) NOTE :- The affidavit shall be executed after discharging the Stamp Duty Liability on the affidavit at the rate prescribed in the applicable State Stamp Act or the Indian Stamp Act whichever is applicable.ANNEXURE-III-1 [FORMAT FOR LETTER OF CHARTERED ACCOUNT ON THE LETTER HEAD OF THE PRACTISING CHARTERED ACCOUNTANT] (POST LAUNCHING) This is to certify that ____________________ (Name of Shipyard) (hereinafter referred to as the “awardee”) was awarded a Contract for construction of _______________________ for the owner, M/s. ______________________________ (Name and address of the ship owner/broker/charterer). This Certificate is issued to _____________________ (Name of the Shipyard) for them to claim the financial assistance from the Government of India under the Shipbuilding Financial Assistance Policy of the Government of India, at post launching stage, which is promulgated as per GOI order no. _______________________ dated ______________. It is hereby submitted that the Bank Guarantee (BG) bearing No. [BG Number], dated [Date], issued by [Issuing Bank Name], in favour of the Directorate General of Shipping, for an amount of [Currency & Amount], valid until [Expiry Date], has been furnished as collateral security. signature Name AddressDated…………………… Member In Practice Place…………………….. SEAL The break up details of the balance payment received by the shipyard, subsequent to the date of issuance of initial certificate by the Chartered accountant, is as follows; Break-up of amount received (INR) Date of Total Amount Invoice S.No receipt of Received Principal Tax . No.& date payment (INR) compone compone nt nt 1 2 3 4 … Total Signature Name Address Dated…………………… Member In Practice Place…………………….. SEALANNEXURE-III-2 [FORMAT FOR LETTER OF CHARTERED ACCOUNT ON THE LETTER HEAD OF THE PRACTISING CHARTERED ACCOUNTANT] (POST DELIVERY, Phase-I) This is to certify that ____________________ (Name of Shipyard) (hereinafter referred to as the “awardee”) was awarded a Contract for construction of _______________________ for the owner, M/s. ______________________________ (Name and address of the ship owner/broker/charterer). This Certificate is issued to _____________________ (Name of the Shipyard) for them to claim the financial assistance from the Government of India under the Shipbuilding Financial Assistance Policy of the Government of India, at post delivery stage, which is promulgated as per GOI order no. _______________________ dated ______________. Signature Name Address Dated…………………… Member In Practice Place…………………….. SEAL The break up details of the balance payment received by the shipyard, subsequent to the date of issuance of initial certificate by the Chartered accountant, is as follows; Break-up of amount Date of Total Amount received (INR) Invoice S.No receipt of Received . No.& date Principal Tax payment (INR) compone component nt 1 2 3 4 … Total Signature Name Address Dated…………………… Member In Practice Place…………………….. SEAL ANNEXURE-IIIA [FORMAT FOR LETTER OF CHARTERED ACCOUNT ON THE LETTER HEAD OF THE PRACTISING CHARTERED ACCOUNTANT] (post delivery, Phase-II) This is to certify that (Name of Shipyard) (hereinafter referred to as the “awardee”) was awarded a Contract for construction of for the owner, M/s. (Name and address of the ship owner/broker/charterer).With regard to the request for the release of financial assistance under the policy, the shipyard has earlier submitted an affidavit vide _____ dated________ towards the first claim, a copy of which is attached with this certificate The undersigned has carried out a financial audit on ………….in order to ascertain the subsequent payments received by the shipyard from the buyer as stated in the contract. It is noted that the owner has deducted an amount of Rs__________(amount in INR calculated based on theexchangerateprevailingonthedateofeffectingpaymentbytheshipowner/broker /charterer)as Liquidated Damage towards the non-performance of vessel/ non fulfillment of performance guarantee as per the term of the original contract. The balance net price received by the yard against the deferred payment /performance guarantee money is Rs. ________ (In Indian Rupees) against the balance receivable amount of______(amount in INR). This Certificate is issued to(Name of the Shipyard), in order to make the second and final claim of the financial assistance from the Government of India, under the Shipbuilding Financial Assistance Policy of the Government of India, promulgated vide GOI Order no.____dated__. Signature Name Address Dated…………………… Member In Practice Place…………………….. SEAL The break up details of the balance payment received by the shipyard, subsequent to the date of issuance of initial certificate by the Chartered accountant, is as follows; Break-up of amount Date of Total Amount received (INR) Invoice S.No receipt of Received . No.& date Principal Tax payment (INR) compone component nt 1 2 3 4 … Total Signature Name Address Dated…………………… Member In Practice Place…………………….. SEAL ANNEXURE – IIIB CERTIFICATE OF ACTUAL PAYMENT RECEIVED Letterhead of the Bank We, (name of the bank, branch) certify that INR/Currency (As applicable) (_____) is credited into the (name of the bank, branch) in account bearing no. _________ of M/s _(name of the shipyard) having their registered office at (____________). This amount has been received towards payment as per contract number _______ dated ________ for the construction of ___________ General Cargo vessel (yard no. __) between M/s. ______________ and M/s _______________ The details of payment are shown below. Date of Payer Details Transaction S. Amount Payment Account Account ID / Reference No. Received Received Name Number NumberDated…………………… Place…………………….. Signature ANNEXURE-IV DRAFT AFFIDAVIT FORMAT (Post Delivery, Phase-II) I, (insert name), son/daughter of (insert Father’s name), being the authorized signatory of (insert name of the Shipyard) (hereinafter referred to as the “Shipyard”) do hereby solemnly affirm and state asunder: 1. That I am the _(Rank / Position) of _(insert name of Shipyard) and am competent to swear this affidavit. 2. I state that as per the contract the following vessel (s) has / have been delivered to the ship owner M/s. (insert name of the buyer) on the following dates, namely:- (i) (Identification Details of Vessel1)on _(actual delivery date). (ii) (Identification Details of Vessel2)on _(actual delivery date).3. I state that the Shipyard has obtained the foreign currency in the following Bank Accounts for all financial transactions with the buyer/ship owner, namely:- (i) Bank Account No. (insert bank account number) opened in (insert name and address of the Branch of the Bank) in the name of (insert name of the shipyard). (ii) Bank Account No. (insert bank account number) opened in (insert name and address of the Branch of the Bank) in the name of (insert name of the shipyard). I state that: (a) The vessel/s was delivered on (dd/mm/yyyy) at (place). (b) The shipyard has already received / applied for (strike out which is not applicable) financial assistance (amount in INR) under “Shipbuilding Financial Assistance Policy” upon processing of the first application for the release of financial assistance on (dd/mm/yyyy, Date of sanction of release of financial assistance under first application). (c) The shipyard has received the “1retention money/performance guarantee money/deferred payment” for the remaining amount (………in INR) on date (dd/mm/yyyy) from owner/buyer, after deduction of amount (……..…/ or ‘nil’ as the case may be) from the contract value. (d) The cost for any additional work other than the terms of the contract is not included in the above amount. 1. I state that the following documents have been furnished by the Shipyard in support of its application for release of financial assistance, namely:-  Certificate of Payments received for the vessel, duly certified by a Chartered Accountant registered with Institute of Chartered Accountants of India”. (Annexure IIIA) “Audited Balance Sheet” of the shipyard for the complete financial year between the first application for part release of financial assistance and the final application for the remaining amount of financial assistance. 2. I state that all the above documents are true copies of their originals and are genuine. I undertake to furnish any other/further/additional documents that may be asked by the Government of India for release of financial assistance to the Shipyard. VERIFICATION Verified at (insert place) on this the day of________20___ that the contents of the foregoing affidavit are true and correct to the best of my knowledge and no part of it is false and nothing material has been concealed there from. DEPONENT NOTE :- The affidavit shall be executed after discharging the Stamp Duty Liability on the affidavit at the rate prescribed in the applicable State Stamp Act or the Indian Stamp Act, whichever is applicable. *****Annexure V Format for Chartered Accountant’s Certificate (CA certificate verifying actual payments and domestic content) [On CA’s Letterhead with Membership Number & Firm Registration Number] Date: _____________ To whomsoever it may concern, Subject: Certificate of Domestic Content – Vessel "<Vessel Name, Yard Number >" built by <Shipyard Company> I/We, the statutory auditor/chartered accountant of <Shipyard Company Name>, with ICAI Membership No. _____, do hereby certify that: Domestic Content Calculation: I have reviewed the cost records of the Company for the subject vessel project. The total cost of construction of the vessel (excluding taxes and duties) is ₹<A>. Out of this:  Cost of materials, manpower, equipments manufactured or sourced in India (indigenous content): ₹<B>.  Cost of imported materials, equipment (CIF basis): ₹<C>.  Bifurcation of Indigenous content is specified in the Table below:S.No. Components Invoice Country of value/cost Origin 1 Material 2 Manpower, services and overheads 3 Machinery and Equipment The above bifurcation is based on the project cost sheet provided by the Company, listing major expenditures and origin (I've attached a summary of indigenous vs imported major items as Annex A to this certificate). The Domestic Content Percentage = (B / A) x 100 = ___%. Required threshold as per guidelines = __% (for the year of sanction 20__-__). Thus,  ☐ The domestic content meets/exceeds the required threshold.  ☐ The domestic content is below required; shortfall = (__% vs __% required). (Tick as applicable) 2. True and Fair View: I certify that the above information is true and correct as per the books and records of the Company and that I have exercised due diligence in verifying the same. This certificate is issued for submission to the Ministry of Ports, Shipping and Waterways for the purpose of claiming financial assistance under SBFAS and should not be used for any other purpose or by any other entity. Place: ____________ Date: _____________ (Signature and Seal of Chartered Accountant) Name: _______________________ Membership No.: ______________ Firm Name: ___________________ & FRN: ________ Enclosures: Project cost indigeneity statement, valuation summary (if any), exchange rate proof.ANNEXURE VI APPLICATION FOR SHIPBREAKING CREDIT NOTE (Ref: Section 6.3 – to be submitted by ship owner after scrapping a ship in India to get credit note) Application for Shipbreaking Credit Note under SBFAS To, The Competent Authority of SBFAS, Directorate General of Shipping Mumbai Subject: Issue of Shipbuilding Credit Note for scrapping of vessel "<IMO No> < Last name of the Vessel >" Dear Sir/Madam, I/We, <Owner Name/Company>, hereby apply for issuance of a Shipbuilding Credit Note as per the provisions of the Shipbuilding Financial Assistance Scheme. The necessary details are as under: 1. Details of Applicant as per Registration certificate while shipbreaking(Ship Owner):  Name of Vessel Owner/Company: ____________________________________  IMO No. Of the vessel:____________________________________  Full Address of Registered Office: ______________________________  Contact Person: ___________________ Designation: ___________  Contact Number: ________________ Email: ___________________  Company PAN / GSTIN: _______________________________________ 2. Details of Scrapped Vessel:  Name of Vessel (at time of scrapping): _____________________  Type of Vessel: ____________________________________________ (e.g., Bulk Carrier/Tanker/Offshore Supply Vessel/etc.)  IMO Number (if applicable): ________________________________  Date of new built: ______________ Reason for scrapping: ______________  Flag at time of scrapping: _________________________________  Gross Tonnage: ______________  Lightweight (LDT) of Vessel: ____________ tonnes 3. Details of Ship Recycling Yard:  Name of Yard/Facility: _____________________________________  Yard Address & Location (State): ___________________________  Contact Person: ___________________ Designation: ___________ o Contact Number: ________________ Email: ___________________  Yard’s HKC Compliance: ☐ Yes – Class NK/RINA/etc Cert No.___ (Copy to attach) (Attach copy of yard’s accreditation or permission if available.) 4. Scrapping Timeline:  Date of Beaching/Arrival at yard: _________________________  Date of Completion of Scrapping: __________________________  Certificate of Destruction/Recycle Completion No. ______________ & Date: ______________ (attach copy) 5. Scrap Sale Details:  Name of Buyer (Recycler who purchased the ship for scrap): _________________  Total Sale Price for Vessel Scrap: ______________ (in ₹)  Method of Sale: ☐ Direct Sale ☐ Auction ☐ Brokered sale  Date of Sale Agreement: ______________  Price Breakup (if any): e.g., ₹____ per LDT * ____ LDT = ₹____  (Attach copy of Sale Agreement/Bill of Sale and proof of payment received) Fair Scrap Value: Based on the above, the fair scrap value of the ship is ₹__________. (This figure will be used for credit note value calculation at 40%.) 6. Credit Note Requested:  40% of Scrap Value = ₹________ (Rupees _________________________). We request issuance of a credit note for this amount. 7. Intended Use of Credit Note (Newbuild Order):  We intend to utilize this credit note towards the construction of a new vessel in India. Tentative details (if planned): Type of new vessel: __________; approximate size: ______; expected year of order: ____ (if already decided or under negotiation, mention shipyard name and project if possible).  ☐ We have not yet decided on the newbuilding project, but commit to doing so within the validity period of the credit note. 8. Declarations:  The vessel was owned/operated by us (☐ Indian company / ☐ foreign company) and we chose to recycle her in India in furtherance of Govt’s Recycling policy.  We confirm that the vessel’s scrapping complied with all required regulations under the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (HKC).  We have not applied for any other incentive from Central Govt for this scrapping (except benefits under taxation or customs rules as applicable). (If any scheme availed, e.g., SEIS or state incentive, mention here for disclosure).  We understand that the credit note is not a cash entitlement but can be redeemed against a future new ship order in India within the stipulated time. We further understand it is non-transferable and will lapse if not used within validity.  We agree to abide by the terms for redemption of the credit note, including that the actual payout will occur only after successful delivery of the new vessel and that we or the shipyard must claim it accordingly.  We indemnify the Government against any misuse of the credit note. If we fail to utilize it in time, we will not claim any compensation. If any conditions are attached to its use, we will comply. 9. Supporting Documents: (enclosed) a) Copy of Vessel Recycling Completion Certificate issued by the ship breaking yard.. b) Copy of certificate from chartered accountant showing the payment received by the shipyard as per Annexure XX. c) Valuation certificate from 3 approved valuers as listed in Schedule III It is requested to please process application and issue the Credit Note for ₹______ at the earliest. Thank you. Yours faithfully,(Signature) Name: ______________________ Designation: __________________ For <Owner Company> (with seal) Place: _________ Date: __________ Enclosures: 1.ANNEXURE VII REQUEST FOR REDEMPTION OF CREDIT NOTE (ASSIGNMENT TO NEWBUILD CONTRACT) (Ref: Section 6.4 – to be submitted by owner (and yard) when ordering new ship to use credit note) Application for Redemption/Assignment of Shipbreaking Credit Note To, The Director (National Shipbuilding Mission), MoPSW / Chief Coordinator SBFAS, Ministry of Ports, Shipping and Waterways, Govt. of India, <Address> Subject: Redemption of Credit Note No. ____ against new ship order at <Shipyard Name> Dear Sir/Madam, I/We, <Owner Name/Company>, the holder of Shipbuilding Credit Note No. ___ dated __, issued for ₹______, hereby apply to redeem/assign the said credit note towards a new shipbuilding contract as per details below: 1. Credit Note Details:  Credit Note Number: ____________  Date of Issue: ______________  Credit Note Value: ₹___________  Issued in favor of (Owner): __________________ (our company)  Validity (for order signing) until: ______________ (as per note) 2. Scrapped Vessel Reference: (for verification)  Name of scrapped vessel credit pertains to: ______________  Recycling completion date: _____________ (as per earlier application) 3. New Shipbuilding Contract Details:  Shipyard with whom contract signed: <Shipyard Company Name>  Shipyard Address: __________________________  Vessel to be constructed: <Description of new vessel>  New Vessel Contract Price: Date of Signing of Shipbuilding Contract: ________________  Contract Delivery Date (scheduled): ________________  We (Owner) intend to use the credit note value of ₹_____ as part- payment under this contract. Specifically, out of the total price ₹, an amount of ₹ will be offset by the credit note, and the remaining ₹____ will be paid by us to the yard as per agreed milestones. The contract has been structured accordingly.* 4. Assignment/Consent by Shipyard: We attach herewith a letter from <Shipyard Name> (or co-signature below) confirming that the shipyard is aware of and agrees to the arrangement that ₹_____ will be paid by the Government of India under the Credit Note upon vessel delivery, in lieu of that amount from the Owner. The shipyard will claim this ₹_____ from MoPSW at the time of delivery. 5. Undertakings:  The Owner (we) undertakes not to transfer or use the credit note for any other contract now that it is assigned to this vessel. If this newbuilding contract is cancelled or fails, we will immediately inform the Ministry; we understand the credit note may then lapse if not within validity or require fresh approval to reassign.  The Owner also undertakes that we will not claim any additional or duplicate subsidy for this new vessel beyond this credit note and whatever normal SBFAS assistance the shipyard gets. We understand the credit note is independent of the yard’s own subsidy claim, which is separate.  The Shipyard undertakes to abide by the procedure for claiming the credit note amount at vessel completion and to furnish necessary documents (delivery proof etc.) to MoPSW. The Shipyard confirms it has not included the credit note amount in any other Government incentive claim. 6. Request: In view of the above, we request the Ministry to officially acknowledge the tagging of Credit Note No.___ (₹) to the newbuilding contract with <Shipyard>. We seek confirmation that upon successful delivery of the vessel (expected <month, year>), an amount of ₹ will be paid by the Government to <Shipyard> against this credit note. This will enable the shipyard to proceed accordingly. 7. Enclosures: a) Copy of Shipbuilding Contract (or key excerpts showing price and payment terms). b) Letter from Shipyard consenting to credit note arrangement (if not co-signed). c) Copy of Credit Note Certificate issued. d) [Any other relevant document].Thank you for your consideration. We look forward to your confirmation of this credit note redemption arrangement. Sincerely, For <Owner Company>: For <Shipyard Company>: (Signature & Seal) (Signature & Seal) Name: _____________________ Name: _____________________ Designation: _______________ Designation: _______________ Date: ______________ Date: ______________ Place: _______________ (If the shipyard sends a separate letter, their co-signature here is optional but recommended for clear tripartite understanding.)Part B – Transfer Endorsement (if any): If the note is sold/transferred, the original holder signs here: “Transferred to [Name of Transferee] on [Date] – [Signature, Name].” The transferee countersigns. This section allows only one transfer record. Competent Authorities must be notified to update records. Part C – Redemption Form: (To be filled at time of usage along with Form B for assistance) Fields:  Credit Note Number, Value, Original Holder name, Current Holder name (should match applicant for redemption, typically shipyard or shipowner of new vessel).  Details of Newbuilding where credit is to be used: Shipyard, Vessel Name being built, Contract Price, Date of contract, applicable 5% cap = [0.05 * contract price].  Claim: “I/We hereby redeem this Credit Note towards the above project. The permissible usage is ₹___ (enter lesser of note value and 10% cap). Please offset this against the payment due for financial assistance.”  Signature of holder (now using it) with date. If the holder is the shipyard, their authorized person signs; if a shipowner using it via yard, likely yard handles it in claim but might have both sign off.  NSM verification: For office use, NSM official certifies the note is valid and amount ₹___ is approved for redemption. Sign and date. This annexure essentially standardizes the issuance and usage of the credit notes. In practice, Part A is given as certificate to holder, Part C is submitted back to NSM when used.Annexure-VIII Framework for Approval of Private Agencies based in India as Newbuilding Ship Valuators 1. Purpose To lay down the policy, eligibility norms, evaluation process, and monitoring mechanism for granting Government approval to private agencies for carrying out valuation of newbuilding ships, in order to ensure fair, transparent, and technically sound cost assessments. 2. Scope This framework shall apply to all cases where a private agency is proposed to be approved for valuing the cost of ships under construction, for any category of vessel including but not limited to tankers, bulk carriers, container ships, passenger vessels, offshore units, and specialized craft. 3. Eligibility Criteria 3.1 Legal & Organisational - Registered legal entity (Company/LLP/Proprietorship) with valid Certificate of Incorporation. - Possession of statutory registrations (PAN, GST, etc.). - Positive net worth for the last three financial years. - Not blacklisted or debarred by any Government or public body. 3.2 Technical & Professional - Minimum 5–10 years of demonstrable experience in ship cost estimation or valuation. - Successfully completed valuations for at least 50 vessels of different types and tonnages in the last 5 years; but at least 10 vessels in last year. - Employment of qualified Naval Architects, Marine Engineers, and cost estimation professionals. - Access to recognised ship design and cost modelling tools. - Membership in recognised maritime professional bodies (e.g., RINA, IMarEST, NI). 3.3 Integrity & Compliance - Declaration of absence of conflict of interest with shipyards under evaluation. - Documented Quality Assurance and Confidentiality policies.- Compliance with International Valuation Standards and maritime industry norms. 3.4 Infrastructure & Capacity - Adequate office and communication infrastructure in India (or a liaison office). - Ability to conduct physical inspections at shipyards. - Sufficient manpower for parallel project handling. 4. Evaluation Process 1. Document Verification – Initial scrutiny of submitted documents. 2. Technical Presentation – Agency to demonstrate methodology, case studies, and capabilities. 3. Reference Checks – Validation from past clients and industry sources. 4. Trial Valuation (if required) – Assign a sample valuation for quality assessment. 5. Committee Recommendation – Evaluation Committee to submit findings for approval. 6. Approval Order – Empanelment for a fixed 3-years term, subject to periodic review. 5. Post-Approval Monitoring - Annual review of performance. - Random audits of valuation reports. - Renewal based on continued compliance and satisfactory performance. Checklist for Evaluation Committee Sl. No. Criteria Supporting Yes/No Remarks Document A. Legal & Organisationa l 1 Certificate of Copy of Incorporation certificate / Registration 2 Statutory Copies of registrations documents (PAN, GST) 3 Audited Audit reports financialstatements (last 3 years) 4 Declaration of Self-certified no blacklisting declaration B. Technical & Professional 5 Years of Company profile experience in ship valuation 6 Track record Project list – list of ships valued (type, size, year) 7 Qualifications CVs, certificates of key personnel 8 Use of Tool list & approved licences design/costin g software 9 Professional Membership memberships proof C. Integrity & Compliance 10 Conflict of Self-declaration interest declaration 11 Quality Policy Assurance & documents Confidentiality policy 12 Compliance Methodology with note international valuation standards D. Infrastructure & Capacity13 Office Address proof premises in India 14 Inspection/sur List of vey capability surveyors/equip ment 15 Manpower HR list strength E. Evaluation Process 16 Technical Minutes of presentation presentation given 17 Reference Feedback checks records completed 18 Trial valuation Report copy report (if applicable) 19 Committee Evaluation note recommendat ion If the above is satisfactory, the firm may be recommended for inclusion in the approved list of evaluators for ships new-building and recycling activities