Published 17:17 IST, July 23rd 2024

Budget 2024: Simpler Tax Regime Proposed For Foreign Shipping Companies Operating Domestic cruises

Finance Minister Nirmala Sitharaman said ownership, leasing, and flagging reforms will be implemented to improve the share of the Indian shipping industry.

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FM To Present Budget Today | Image: ANI
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New Delhi: Finance Minister Nirmala Sitharaman in her budget speech on Tuesday (23  proposed a simpler tax regime for foreign shipping companies operating domestic cruises in the country, aiming to give a fillip to cruise tourism in India. Presenting the Union Budget for FY25, she said ownership, leasing, and flagging reforms will be implemented to improve the share of the Indian shipping industry and generate more employment.

"To give a fillip to this employment-generating industry, I am proposing a simpler tax regime for foreign shipping companies operating domestic cruises in the country," she said. There is tremendous potential for cruise tourism in India, the minister added.

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Amendments Proposed To Promote Cruise-Shipping Industry

According to the Budget document, certain amendments have been proposed to promote the cruise-shipping industry in India with an aim to make India an attractive cruise tourism destination, and to attract global tourists to cruise shipping in India and to popularise cruise shipping with Indian tourists.

"A presumptive taxation regime is being put in place for a non-resident, engaged in the business of operation of cruise ships, along with exemption to income of a foreign company from lease rentals, if such foreign company and the non-resident cruise ship operator have the same holding company," the document said.

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It said, therefore, it is proposed to insert a new Section 44BBC, which deems 20 percent of the aggregate amount received/receivable by, or paid/payable to, the non-resident cruise-ship operator, on account of the carriage of passengers, as profits and gains of such cruise-ship operator from this business.

Amendments Will Take Effect From April 1, 2025

The document proposes that provisions of Section 44B relating to presumptive taxation for the shipping business of non-residents, shall therefore, no longer apply to the cruise-ship business According to the Budget document, these amendments will take effect from April 1, 2025, and will, accordingly, apply in relation to the assessment year 2025-26 and subsequent assessment years.

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The document noted that the participation of international cruise ship operators in this sector will encourage the development of this sector and enable access to international best practices. 

 

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(With inputs from PTI)

17:14 IST, July 23rd 2024