Applicability of the Tonnage Tax Scheme to income from Barge

Tax queries 1700 views 3 replies

Chintan Shah

534 Points Posted on 08 April 2010

Dear collegues,

In case a company earns income from operation of a barge which is used along with tug boats for the purpose of transport of the goods from port to ship and visa versa will the tonnage tax scheme be applicable??

Please do answer…. It would be of much help

Regards

Chintan

Replies (3)

Amit Sureka

Finance Manager-India

251 Points Posted on 09 April 2010

Dear Chintan,

Under tonnage tax scheme barge, tug is included if its satisfied the criteria specified by DG Shipping. Tonnage tax scheme is applicable to a company. Then you need to find out whether the assets is qualifying assets or not. After that on fullfillment of certain conditions you can adopt tonnage tax scheme. Please refer chapter XII-F and section 115VC and 115VD etc for tonnage tax scheme.

Regards,

Amit

Chintan Shah

534 Points Posted on 09 April 2010

But first of all is Barge included in the meaning of Ship or vessel???

Amit Sureka

Finance Manager-India

251 Points Posted on 09 April 2010

Please find details of qualifying ship under section 115VD

For the purposes of this Chapter, a ship is a qualifying ship if—

(a) it is a sea going ship or vessel of fifteen net tonnage or more;
(b) it is a ship registered under the Merchant Shipping Act, 1958 (44 of 1958), or a ship registered outside India in respect of which a licence has been issued by the Director-General of Shipping under section 406 or section 407 of the Merchant Shipping Act, 1958 (44 of 1958); and
(c)a valid certificate in respect of such ship indicating its net tonnage is in force,

but does not include—

(i) a sea going ship or vessel if the main purpose for which it is used is the provision of goods or services of a kind normally provided on land;
(ii) fishing vessels;
(iii) factory ships;
(iv) pleasure crafts;
(v) harbour and river ferries;
(vi) offshore installations;
(vii) a qualifying ship which is used as a fishing vessel for a period of more than thirty days during a previous year.

Earlier barge was consider by DG shipping for tonnage tax purposes. We need to check the current status whether barge is still there or they have removed.

Regards