Accepting the long-pending demand of India’s leading merchant navy Unions, The Maritime Union of India (MUI) and the National Union of Seafarers of India (NUSI); the Ministry of Finance, Government of India has finally granted income tax exemption to Indian seafarers sailing aboard foreign ships outside India for more than 182 days a year.
Through Circular No. 13/2017, signed by Subhash Jangala, Under Secretary, Department of Revenue, Central Board of Direct Taxes (CBDT); the Ministry of Finance has issued a clarification regarding liability to income-tax in India for a non-resident seafarer receiving remuneration in NRE (Non Resident External) account maintained with an Indian bank.
Amar Thakur, General Secretary, MUI, said, “This decision is a huge boost for over 1.3 lakh Indian seafarers, as tax-free income has always been an added attraction for Indian merchant navy workforce, which contributes around $40 million annually to our country’s exchequer.” “Income tax exemption to Indian seafarers will certainly strengthen the Centre’s ‘Maritime Agenda 2020’ aimed at increasing the global share of Indian seafarers to 9% from7% currently,” said NUSI General Secretary Abdulgani Serang.
A judgement delivered by the Kolkata income tax tribunal in August 2016 mandated Indian merchant navy workforce to pay taxes in India, which shattered the morale of Indian seafarers. Both, MUI and NUSI jointly challenged the tribunal’s decision in August 2016 in the Kolkata High Court through Messer Dave & Padvekar Associates and Advocates .
Thereafter, representatives of MUI and NUSI sought Centre’s intervention in the interest of Indian seafarers through a series of meetings in New Delhi with CBDT Chairman Sushil Chandra, Union Shipping Minister (Minster of State) Mansukh Mandavia and Union Finance Minister (Minister of State) Arjun Meghwal along with advocate R S Padvaker, Ex Judge ITAT and Member of Parliament (Lok Sabha) Gajendara Singh Shikhawat.