Thursday, 6 October 2011

National Shipping Board moots waiver of income tax for seamen on Indian ships


In response to the longstanding demand that Indian seafarers working in domestic shipping be treated at par with their colleagues working in foreign companies, the National Shipping Board (NSB) will recommend a waiver of income tax on their salaries. In other developments, there have been suggestions at the NSB meeting that, given the maritime security environment around the country, all major and minor ports be brought under the control of Union Government. The National Shipping Board is a permanent statutory body established under Section 4 of the Merchant Shipping Act 1958.

The issue of taxation was just one of many on the agenda of its 117th meeting of the NSB in Kochi last week. In this connection, Director General of Shipping S B Agnihotri will coordinate with the government so that the Finance Ministry can put the taxation proposal on the table in the next Budget. The recommendation, if accepted, will profit almost 50,000 Indian seafarers on Indian flagships who pay income tax, often at the highest slab rates, while those working on foreign flags get NRI status- and tax free salaries- if they sail for six months or more in a year. 

This anomaly has long been a bone of contention with Indian companies who have claimed, with some justification, that the best seafarers leave the country to sail abroad mainly because they want to avoid high taxation at home. This results in a drain of qualified and experienced seafarers from the country, they say.
The National Shipping Board also wants to expand the Marine Mercantile Department to cater to new ports. "We have to augment the strength of the Directorate of Shipping as there is a shortage of manpower. Moreover, we have to expand as the number of ports and the number of ships coming to the country is increasing," the DGS said after the Kochi meeting. 

With piracy and terrorism threats continuing to plague the long and porous Indian coastline, some NSB members feel that the present administrative arrangement- where control of major ports is with the Union Government and minor ports are controlled by State Governments- is not good enough. NSB Member R. Rajamohan is one of them; he is believed to have mooted the idea of central control, also suggesting that the Colachel Port be developed as a container port given its strategic location close to major shipping routes.

The issue of armed private security guards on Indian merchant ships is believed to have also been discussed at the NSB Kochi meeting that was also attended by Union Shipping Secretary K. Mohandas, Members of Parliament K. V. P. Ramachadra Rao and Mr K. B. Shanappa, Chairman of the NSB Capt P. V. K. Mohan and Shipping Corporation of India's Chairman and Managing Director S. Hajara. 

Another member, Sandeep Chandra, said that the Indian Navy should be given greater powers to tackle piracy, so that pirates would not assume that force would not be used against them. The NSB has said that India should send a 'strong message against maritime piracy', especially in the Gulf of Aden. 
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