|
New Delhi, Jun 17: the domestic shipping industry from service tax either domestically or internationally to ensure a level-playing field in its international operations. Thiswill be in line with other maritime countries.
The meeting noted that the proposals for improving the competitiveness of Indian shipping was heavily reliant on tax concessions as is the fact that the governments compete for getting the registration of ships done in their jurisdictions and the tax advantages they offer is the main consideration influencing the decision of investors in new shipping tonnage. The other considerations for investors are the availability of cargo and of trained seafarers and India is quite favourably placed on both these aspects.
The Commission is of the view that in granting tax concessions to any particular sector, the government should be conservative and in the case of shipping only those proposals should be considered which improved the competitiveness of Indian ship-owners in comparison with foreign ship-owners.
According to the Indian National Shipowners’ Association (INSA), the major levies that impinge the most on Indian ship owners are service tax, MAT on profit on sale of vessels, corporate income tax on interest, seafarers’ income tax- borne by employers, withholding tax on charter hire charges and withholding tax on interest on ECB.
Ships with foreign flags compete for Indian cargo on equal terms with Indian flag vessels the latter’s competitiveness is strongly influenced by any differential in the fiscal regimes. Twenty nine countries accounting for more than 70% of the world tonnage, including the Flags of Convenience countries like Liberia, Cyprus , Malta and Netherlands give wide flexibility to the ship owners registered in those countries in their operations along with low taxation levels under the tonnage tax scheme.
India too introduced the tonnage tax system with effect from April 2004. It had a favourable effect and boosted the growth of Indian merchant fleet. Under the new regime ship owners could opt for the tonnage tax whereby income tax is levied on the basis of presumptive income of the net tonnage (NT) of each ship owned by the Indian ship owners determined according to a fixed scale. It has been estimated to have reduced the incidence of tax to a level of around 3%. But the industry feels that the benefits of tonnage tax have been erodedby certain taxes like service tax and dividend distribution tax, which were introduced or the rates of which were enhanced subsequently....
Discuss this story on expressindia forums
|
|
 |
 |
 |
About Us | Contact Us | Advertisers | Site Map | Make us your homepage | Work for Us | RSS | Subscribe | Electronic Edition | Privacy Policy© 2009: The Indian Express Limited. All rights reserved throughout the world
