I-T plan to tax sailors to hit Forex

Mumbai: The proposal of the Income-Tax authorities to tax Indian sea farers who remit their salaries earned abroad to India could cost the country a drop in foreign exchange.

There are 1,30,000 Indian seafarers working abroad and they remit around $35-40 million annually. These seafarers were so far exempted from paying tax on their remittances if they stay 182 days in India.

But the Kolkata bench of the I-T appellate tribunal recently held these seafarers are liable to pay taxes on receipt basis because the foreign employer on  the instruction of the seafarer remitted the salary to his NRE account in India.

The Centre’s ‘Maritime Agenda 2020’ as well as stakeholders of the maritime industry envisages the global share of Indian seafarers should increase to 9 per cent from the current 7 per cent. This could be in jeopardy if the tax authorities implement the decision of the court, said Capt Kamal Chaddha, former mariner and now MD of Marix Media.

He said most countries don’t tax international earnings of foreign going seafarers. India should not lag behind given the competition to secure lucrative assignments for their citizens, he said.

Hopes are now on the case filed by both Maritime Union of India and National Union of Seafarers of India challenging the I-T Tribunal’s decision in the Calcutta high court.