INSA urges government to exempt shipping industry from service tax

Mumbai, Sep 28 (UNI) The shipping companies, which have already welcomed the introduction of tonnage tax, are miffed at plethora of taxes that have been imposed by the government on them.

Addressing the Indian National Shipowners' Association's (INSA) annual review meet here yesterday, its president, Yudhisthir Khatau, said while on one hand the industry got a globally competitive tonnage tax scheme, it was plagued with a variety of taxes totaling up to 12, such as the service tax and fringe benefit tax (FBT) along with the earlier existing taxes.

In fact, these taxes threaten to take away the much sought level playing field by the industry against global competition, he said. The cumulative effect of these taxes leads to an inherent cost disadvantage of 4-5 per cent for the Indian owners, he added.

The industry has urged the government to exempt it from service tax on services availed by the shipping companies in line with the practice followed by most of the maritime nations so as to remain competitive.

Releasing the Annual Review for the year 2005-06, which presents a roundup of the shipping industry, Mr Khatau rued that despite making its promise to INSA not to levy service tax on reverse charge basis, no clear-cut clarification has been issued by the Finance Ministry so far. Meanwhile, INSA has appealed for regrouping of various services notified in the Import of services Rules applicable since 2006 onwards.

CMD of Shipping Corporation of India and Vice President of INSA, S Hazra and its general secretary S R Kulkarni were present on this occasion.

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