Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: cpt :: list of goods taxed at 4% :: VAT Audit :: TDS :: ACCOUNTING STANDARDS :: due date for vat payment :: empanelment :: Central Excise rule to resale the machines to a new company :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India
 
 
« News Headlines »
 New board for indirect taxes to become operational from June 1
  9 changes that came into effect from April 1
 First time filing income tax? Here's all you need to know about Form 16 and Form 26AS
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned
 All about income tax return form Sahaj
 Why seeing Form 26AS is a must before filing tax return and how to access it
 No tax on notice period pay cut
 Interpretation Of Central Goods And Services Tax (Cgst) Act (Part-1)

Tax tribunal rules in favour of foreign shipping companies
August, 25th 2008

Foreign shipping companies have won the second round in their battle with Indias income-tax department.
In a decision that could determine how these companies are taxed, an appellate tribunal has agreed that a Belgian shipping firm doesnt have to pay taxes in India on inland haulage charges. The Mumbai income-tax appellate tribunal last week dismissed an appeal by the income tax department, demanding taxes from Safmarine Container Lines N.V. on revenue earned by moving cargo by road and rail within the country. Mint reviewed a copy of the decision.
A dozen other cases of similar nature are lined up for hearing in the tribunal.

The tribunal upheld a ruling by the commissioner of income taxes (appeals) that inland haulage charges earned by Safmarine, part of Denmark-based shipping company A.P. Moller-Maersk AS, are within the scope of income derived from the operation of ships in international traffic.

Under the tax treaties entered by India with most countries, income earned by foreign shipping companies from operating ships in international waters is taxed in the country of residence, said Samir Kanabar, a tax and regulatory services partner at Ernst and Young.

But, according to Indian tax laws, 7.5% of certain collections of foreign shipping firms are deemed taxable here. Apart from sea freight income, earnings of foreign shipping companies in the form of demurrage, handling and other similar charges can be taxed under the presumptive basis.

However, the Indian tax law does not explicitly provide whether the inland haulage charges are covered under the presumptive basis of taxation. This lack of clarity has resulted in a debate between Indian tax authorities and foreign shipping companies on the taxability of inland charges, said Kanabar, who advises companies about issues on infrastructure, real estate and the government.

This is not the end of the road, said a person familiar with the litigation who didnt want to be identified. The income-tax department may approach the (Bombay) high court on this issue. The department can take up to three months to file its case before the court, this person added.

The chief financial officer at a European shipping line said this case would help set the base for tax calculations. The inland haulage is very much part of a composite contract, though it is discharged in a different way, the executive said asking not to be named. The inland haulage charges may constitute only 5-8% of the total revenues, but when you consider the volume it has huge financial implications.

Safmarine had received Rs9.64 crore as inland haulage charges out of a total Rs184.94 crore, for the assessment year 2001-02, according to submissions to the tribunal.

I cannot put a figure to the total revenue earned from inland haulage charges, though it will run into crores of rupees with more foreign shipping companies setting up shop in India, said another executive with a foreign shipping line. But if the Indian government decides to tax that portion, it will dampen the spirit of overseas companies to offer integrated logistics solutions.

Shipping companies such as AP Moller-Maersk, APL Ltd, CMA CGM group, Mitsui OSK Lines Ltd, Hapag-Lloyd AG, Mediterranean Shipping Co. SA and Kawasaki Kisen Kaisha Ltd of Japan have already set up own offices in the country.
A section of the local trade is opposed to any tax exemption for the foreign firms. The same shipping lines arguing for exemption of tax on inland haulage charges are not ready to include stevedoring charges and terminal handling charges as a part of ocean freight, said an executive with a Mumbai-based freight forwarding firm who also didnt want to be named because of the sensitive nature of the issue.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

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