Business India ×
  Magazine:
Branding

Published on: Oct. 27, 2020, 8:50 a.m.
Seafarers’ dilemma
  • Currently over 130,000 Indian seafarers work aboard specialised cargo vessels world-wide

By Hemang Palan

India’s oldest union of merchant navy officers, The Maritime Union of India (MUI), has sought an urgent intervention of the Shipping Ministry of India for enabling Indian seafarers qualify for the Non-Resident Indian (NRI) status for 2020-21. To qualify for NRI status, like any other citizen of India, an Indian seafarer too has to be outside India for 182 days, or six months in a year. Consequently, his entire income while abroad is not subject to tax by Indian income tax department.

“Problems such as crew changes from foreign ports and Covid-19 pandemic have posed a critical challenge for Indian seafarers, as far as their income and liability to pay income tax is concerned,” says Amar Singh Thakur, general secretary, MUI, in a letter submitted recently to the Shipping Ministry of India. “It is to be understood that, on the one hand, Indian seafarers serving on ships when major lockdowns were announced worldwide could not be brought home. On the other hand, those seafarers who were waiting to join or were on leave could not join ships to replace those returning home. As a result of this dual challenge, the seafarers on shore have not been in a position to fulfil the officially declared criteria of working outside India for more than 182 days in a year to qualify as NRI”.

The letter further calls attention to the fact that the prime asset of the merchant shipping industry are the seafarers, who continue to work without interruption even when all other modes of transport and most businesses have ceased work during the ongoing pandemic. “Seafarers continue to provide essential goods all around the globe, working onboard ships, away from their families, who have to face challenges all alone at home. Seafarers have always brought valuable foreign exchange to our country. This issue has already badly affected employment prospects and it appears this will continue to do so in the coming months. In order to improve the morale of our seafarers, we seriously need to be fair to them and grant exemption from income tax for 2020-21, since the pandemic continues to hamper their jobs.”

High tax burden

Therefore, MUI would like to appeal to the Ministry of Shipping to acknowledge this issue and ensure that an appropriate circular to exempt those Indian seafarers, who are not in a position to qualify as NRIs for no fault of theirs, be issued forthwith. “The entire shipping industry in India is in agreement with our sentiment,” the letter states. “And, we are certain that our appeal is the given urgent attention in the interest of Indian seafarers. I met senior officials of the Shipping Ministry in New Delhi and was assured full co-operation by the administration,” informs Thakur.

“The officials said that they had forwarded the letter to the Ministry of Finance, with a request to do the needful at the earliest.” In the letter submitted to the Shipping Ministry, MUI has also made a mention to a clarification issued by the Central Board of Direct Taxes on 8 May 2020 in respect of residency under Section 6 of the Income-Tax Act 1961.  Also, countries like the Philippines and Ukraine, which compete with India for global share of seafarers, do not levy high income taxes on their seafaring citizens.”

  • Problems such as crew changes from foreign ports and Covid-19 pandemic have posed a critical challenge for Indian seafarers, as far as their income and liability to pay income tax is concerned

Currently over 130,000 Indian seafarers work aboard specialised cargo vessels world-wide and tax-free income has always been an added attraction for these Indian merchant navy workforce, which contributes about $50 million annually to our country’s exchequer. The global share of Indian seafarers is about 7 per cent at present.

Interestingly, a judgment delivered by the Kolkata income tax tribunal in August 2016 had mandated that Indian merchant navy workforce should pay taxes in India. This ruling then had shattered the morale of Indian seafarers. Upon the timely intervention by the Maritime Union of India, Indian seafarers got tax exemption from the Ministry of Finance, as it subsequently issued a clarification regarding the liability to income-tax in India for a non-resident seafarer receiving remuneration in NRE (non-resident external) account maintained with an Indian bank.

Headquartered in Mumbai, The Maritime Union of India represents Indian merchant navy officers. The union is affiliated to the London-based the International Transport Workers’ Federation, which is a democratic, affiliate-led federation, recognised as the world’s leading transport authority. ITF works passionately to improve working lives, connecting nearly 700 affiliated trade unions from 150 countries and represents nearly 20 million working men and women across the world. 

Corporate Report

How IRM Energy fuels growth, naturally

IRM Energy moves ahead with a clear vision towards transitioning to an energy-oriented company

Cover Feature

Air India 3.0: New wings

Irrespective of whether the final number is 470 or 840, Air India’s massive plane order is the best indication of its confident moves to reclaim its preeminent position in Indian skies

Special Report

How prepared are we to face El Nino

India gears up to tackle the heat wave and El Nino concerns which could spoil the rural party

Corporate Report

CapitaLand expands horizons

Singapore’s CapitaLand is looking to significantly enlarge its portfolio in India

E-MAGAZINE
Air India 3.0-new wings
One step forward two steps backward
Budget 2023
FROM THIS ISSUE

Corporate Report

Technology

Government

Government

Business Notes

Business Notes

Agriculture

The introduction of black pepper as an inter-crop in the sopari and coconut orchards, has enabled farmers to cultivate crops simultaneously

Skill Development

In 2020-21, the programme reached over 112,482 girls in urban and rural locations across six states in India, including 10,000 across Delhi

Collaboration

The event brought together stakeholders and changemakers to participate in a series of conversations on global trends and recent developments

Healthcare

The programme will focus on educating children on oral health and building awareness around the dangers of tobacco use

Airports

Airports set green deadline

Published on March 24, 2023, 12:01 p.m.

Currently Mumbai, Cochin and 25 other airports are using 100 per cent Green Energy

Government and Policy

TN plans to make RE share 50 per cent by 2030

Published on March 24, 2023, 11:44 a.m.

Tamil Nadu is banking high on renewable and green energy

Renewable Energy

Global green investment to triple by 2030: EC

Published on March 24, 2023, 11:22 a.m.

The bloc has also set a goal for carbon capture of 50 million tonnes by 2030

E-vehicles

Ola to raise $300m for expansion

Published on March 24, 2023, 11:03 a.m.

The fundraising would be managed by investment bank Goldman Sachs