Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: form 3cd :: due date for vat payment :: VAT RATES :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: cpt
 
 
« News Headlines »
 What you should know about income tax refunds
 Income tax scrutiny to remain limited despite surge in returns filed
 Regarding Filing of online return for first quarter of 2017-18 extension upto 01-09-2017
 Deadline to file returns extended to 28 August for biz with transitional
 GST input tax credit form
  How to rectify income tax returns
 Govt extends tax exemption for industry in North East, hilly states
 Should you file revised Income Tax returns; find out here
 Tax Deducted at Source (TDS) in Goods & Services Tax (GST)
 10 companies that blamed GST for soft June quarter
 How will GST impact the Indian economy

Industry facing manpower crunch, tax disparities
October, 25th 2006

The Indian shipping industry is facing a shortage of around 650-750 senior officials, but the paradox is the number of Indians working on foreign ships is double that of those working on ships owned by Indian companies. Its compounding the human resources problem in the industry, which is already facing an acute shortage of trained personnel.

The current problem is due to the tax disparities with peers working in foreign ships. The taxation disparity has made us subsidise the training cost of our foreign competitors, Shipping Corporation of India (SCI) CMD S Hajara says. Indian nationals working on Indian ships come under a 30% income-tax bracket, regardless of the location of the work, which could be any country as ships move all over the world. However, Indians working on foreign ships are exempt from this tax.

As a result, the Indian shipping industry expects the government to rationalise the income tax structure to curb the migration of Indian talent to foreign vessels. Also, there is a need for foreign crew (officers) to be allowed to work under Indian flagships in order to meet the experience matrix as stipulated by oil majors.

This manpower shortage is inspite of having adequate training facilities within the country. Maritime training was privatised ten years ago. At present, there are four government-owned and thirteen private institutes.

Fiscal issues include the imposition of customs duty on import of certain categories of ships (between 30 to 40%) and service tax among others. INSA president Yudhisthir Khatau says the industry is plagued with a variety of taxes totaling upto twelve, in the form of service tax and FBT along with the earlier existing taxes which threaten to take away the much sought level playing field against global competition.

The cumulative effect of these taxes lead to an inherent cost disadvantage of 4-5% for Indian owners. Therefore, the industry is asking for a complete exemption from service tax on services availed by shipping companies, in line with the practice followed by most of the maritime nations in the world.

Globally, input services for shipping industry are not subject to service tax whether services are availed domestically or internationally. On the other hand, to maintain their global competitiveness, the shipping industry needs at least another 200 vessels replacing 99 old vessels. Assuming a price of $10 million per ship, the total cost of maintaining market share over the next six-seven years to the Indian shipping industry will be $3.75 billion.

The need of the hour is also to increase port efficiency. At present, JNPT port does 18 moves per hour while Chennai Port does 12 moves per hour.

In comparison, Shanghai does about 40 moves per hour and Colombo, 22 moves. Moreover, not a single port in India is able to handle 6000 TEU vessels due to low draft port.

Hajara adds, Lack of major shipyards and deep draft port to handle larger vessels are major problems for the shipping industry.

The share of Indian ships in the countrys overseas sea-borne trade has slipped to 13.7% from a high of around 40% in the late 1980s, while the share of foreign companies has been rising steadily. Indian ships share in the countrys overseas trade is continuously decreasing and as a result, the country has to depend on foreign ships to a considerable extent, resulting in higher freight payments.

These issues notwithstanding, the Indian fleet registered a growth of 5.6% during the year 2005-06 with its strength showing an increase from 686 ships of 8.01 mill gt to 739 ships of 8.58 mill gt, an increase of 24% since the introduction of tonnage tax. Around Rs 1,300 crore have been set aside in TT reserve by the shipping companies for acquisition of ships in two years.

Together with the additional funds that can be leveraged against this by way of bank borrowings, the total commitment for acquisition of ships amounts to approximately Rs 5,200 crore.

As per Lloyds-Fairplay World Fleet Statistics for 2005 Indias ranking in terms of gross tonnage was twentieth amongst major maritime countries.

With the fleet acquisition plans currently being undertaken by the shipping companies, it is hoped that India will cross 10 million gross tonnes shortly to rank among the top ten maritime nations.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions