Mumbai, Feb 04: The proposal of implementing tonnage tax for shipping companies in the interim budget has proved to be just another `intention` going by the mixed response in the domestic shipping circles. While presenting his budget, Union Finance Minister Jaswant Singh said, ``to make Indian shipping internationally competitive, a tonnage tax scheme, with notional income at a fixed rate, on the basis of net registered tonnage should be considered``.
According to RSM’s Ketan Dalal, the implementation of tonnage tax proposal is confusing as there is no mention regarding the proposal in the text of finance bill.
Dalal, who was actively helping Indian National Shipowners` Association (Insa) in putting a representation on tonnage tax to the government, said that the government has chosen the concept of tonnage tax.
While some sources in the shipping circles called the mention in the interim budget speech regarding tonnage tax as a `political plus election stunt`. ``There is no point in mentioning tonnage tax proposal when there is no mention of the time of implementation. Moreover, for implementing tonnage tax, it needs amendments in income tax act and apparently the government is not ready for that``, he said.
Meanwhile, Insa welcomed the move to introduce tonnage tax for shipping sector as it was their long standing demand. ``It is great that the government has made a commitment to take the concept of tonnage tax forward by mentioning in the budget speech``, he said. Officials from Great Eastern Shipping Company Ltd (GE Shipping) said that the move to introduce tonnage tax for shipping sector is a positive note as it will provide shipping companies a level-playing field.
Bureau Report