MASSA, NUSI demand to amend proposal to bring Indian seafarers under tax net

Maritime bodies MASSA and NUSI on Monday sought intervention of Finance Minister Nirmala Sitharaman to amend a Budget proposal, which will now bring Indian seafarers under the Income tax net.

Maritime unions are protesting against the proposed change in the Income Tax Act after Budget 2020 proposed to tax Non Resident Indians (NRI) in India, who are not paying tax anywhere in the world.

Also, with the period of stay in India being reduced from 181 to 120 days, people have to spend more time abroad - more than 245 days compared to 183 days earlier, will get the NRI status as proposed in Budget 2020.

"Today on March 2, 2020; when Indian Parliament's session gets resumed to approve the Union Budget 2020, leading maritime bodies of India like Maritime Association of Shipowners Shipmanagers and Agent (MASSA) and National Union of Seafarers of India (NUSI) have intensified their ongoing protest against a Budget proposal to bring Indian seafarers under the income tax net," the maritime bodies said in a joint statement.

Both these bodies have demanded to amend the Union Budget proposal to levy income tax on Non Resident Indians (NRIs) who are not paying tax anywhere in the world.

Shiv Halbe, MASSA Chairman said by virtue of their profession, Indian seafarers attain an NRI status by working aboard cargo vessels that sail across the globe on international waters for a substantial period in a financial year.

These Indians, who thus attain an NRI status, cannot hence pay income tax anywhere in the world as they do not reside and work on foreign soil, Halbe said.

"I therefore urge Finance Minister Ms Nirmala Sitharaman to amend the Union Budget 2020 proposal suitably in the interest Indian seafaring population. Otherwise, Indian seafarers will be subjected to income tax as high as 30 per cent, and global share of Indian seafarers might drop substantially over a period of time.

"Countries like Philippines and Ukraine compete with India for global share of seafarers, but they do not levy high income taxes on their seafaring citizens," he added.

NUSI General Secretary Abdulgani Serang said, "Unlike land-based jobs, seafarers are a floating population as they don't have any country of residence. Logically, they cannot pay tax and they are not supposed to pay because they are floating population. It's a retrograde and negative step".

Both MASSA and NUSI have sought a legal opinion from taxation and law firms of immense repute to protect the legitimate rights of Indian seafarers.