The Hindu Business Line : Extension of tonnage tax to inland, coastal vessels sought

The committee has recommended that "matters for extending the benefits of tonnage tax to the vessels registered under Indian Vessels Act 1917 and Indian Coastal Vessels Act 1838 may be pursued further with the Ministry of Finance as this is also vitally linked to the viability of inland water transport sector."

The Government had introduced tonnage tax regime for shipping industry in the 2004-05 Union Budget with an option for the shipping companies to opt for either tonnage tax or corporate tax.

However, it had excluded the dredgers, and vessels registered under Indian Vessels Act and Indian Coastal Vessels Act, who continued to be under the corporate tax net. Meanwhile, in the Budget 2005-06, tonnage tax was extended to the dredgers as well, but not to inland and coastal vessels.

The committee pointed out that introduction of tonnage tax in lieu of corporate tax would facilitate investment in the shipping sector as well as provide a level playing field to the shipping industry vis-à-vis its foreign counterparts. This would result in shipping companies acquiring more tonnage.

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