Foreign shipping registers here to help tax-hit cos aid
A host of international shipping registers has opened shops in the city to provide Indian companies, badly hit by the huge tax burden, opportunities to register them in tax havens. The list of foreign registers include St Kitts, Union of Comoros a...
By Sumantra Das, ET Bureau |
MUMBAI : A host of international shipping registers has opened shops in the city to provide Indian companies, badly hit by the huge tax burden, opportunities to register them in tax havens. The list of foreign registers include St Kitts, Union of Comoros and International Register of Marshall Island.
The Indian companies ET spoke to admit that they are looking at the option of getting themselves registered with foreign countries to avail of 100% tax relief. Indian companies pay a hefty 30% tax on tonnage. The Merchant Shipping Act of 1958, which governs the domestic companies, does not allow any Indian shipping firm to register elsewhere.
However, a local firm can go for an open registry with the no objection certificate from the Director General of Shipping (DGS). Or else, it can follow an indirect route by floating a subsidiary in a tax haven. But a direct registry with a foreign company saves time and energy.
Another advantage is that it does not call for induction of a foreign partner and there is no need to employ a minimum number of sea-farers to run the vessel.
Mercator Lines has recently registered its vessels with Union of Comoros after obtaining NOC from DGS. Globally, the growth in open registry almost doubled over the past four years. Companies having opened registry generate more than 50% of the world shipping.
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A shipping company official said, ���A shipowner cannot afford to wait for a few months for registration. The Indian authorities take really long.��� According to SS Kulkarni, secretary general, Indian National Shipowners Association, the time-consuming process of Indian registration has forced Indian companies to acquire ships abroad through their foreign subsidiaries. Download
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