A report submitted to the International Financial Services Centers Authority (IFSCA) pointed out that the current “legal and regulatory framework” relating to ship leasing and financing activities in India is “less favorable” compared to global hubs such as Panama, Dubai and Singapore. . GIFT City has recommended changes in the Goods and Services Tax (GST) and Special Economic Zones (SEZ) Act, 2005 to make the sector attractive.
“Financing and insurance of ships is a special area. Indian agencies (banks, insurance companies, pension funds, alternative capital and others) lack exposure to marine finance and insurance and, therefore, implement non-risk-taking or lengthy, time-consuming procedures,” a committee said. This paper, accessed by IFSCA on June 24, said a report constituted by it. It described how the cost of financing – borrowing and insurance (plough, cargo, and security and indemnity) – increased in India, particularly in London and Singapore has more to offer than its international counterparts who offer highly competitive rates.
“Moreover, India’s tax regime, on the whole, is not encouraging the shipping industry and is not at par with the tax regimes of Singapore, Malta, Cyprus and Panama, where most international carriers are registered … Similarly, the GST provisions The report, prepared by a committee headed by Vandana Agarwal, former senior economic advisor to the central government, said that shipbuilding, ship management, bunkering, repair, etc. are in favor of foreign entities, making Make-in-India unattractive. The other members of the 11-member panel are Mandeep Randhawa, Director, Ministry of Shipping, Nebu Oommen, Ship Surveyor, Directorate General of Shipping, Sandeep Shah, IFSC Department, GIFT SEZ Ltd., GVN Rao, Associate Professor of Law at Gujarat Maritime University, Kalpesh. Vithlani, General Manager (Projects), Gujarat Maritime Board, Dipesh Shah, Executive Director, IFSCA, among others.
Suggesting various changes, the report states that GIFT City in Gujarat does not have ports and therefore appropriate changes need to be made in the SEZ laws so that “shipping leasing and the business concerned will not be able to physically bring goods to the SEZ”. exemption may be granted.” It asks IFSCA to notify ports as SEZs for IFSC vessels and exempt ship leasing business in IFSC from net foreign exchange income requirement as the ship leasing business is net foreign exchange in a period of five years. may not be an earner.
Seeking relaxation in the IFSC regime, the report suggests broadening the definition of “ship leasing” to include bare boat charter, time charter, voyage charter, etc. and from the government to make ship leasing a “financial product”. As asked to be notified. Highlighting some of the taxation challenges in India, the report said foreign remittances from India are “cumbersome” and subject to obtaining a Chartered Accountant’s certificate.
Source : Henry Clubs
