BS cited the Supreme Court said that shipbreaking amounts to production and not a recycling process. The industry can thus claim heavy deductions from their taxable income under Sections 80-I and 80-HH of the Indian Income Tax Act 1961.
Under these sections, an assessee can claim deduction from the gross total income up to 20% of profits and gains if these products and gains are derived from an industrial undertaking or a ship or repairs to ocean going vessels.
An industry expert said that “With this order, the shipbreaking industry could get rid of the past liabilities of around INR 50 crore that includes tax, interest on tax and penalty.”
Source: Steel Guru. 8 December 2008