Accepting the long-pending demand of India’s leading merchant navy unions - Maritime Union of India (MUI) and the National Union of Seafarers of India (NUSI) - the Ministry of Finance has finally agreed to grant income tax exemption to Indian seafarers sailing aboard foreign ships outside India for more than 182 days a year.
Central Board of Direct Taxes (CBDT) under the Finance Ministry has issued a clarification regarding liability to income-tax in India for a non-resident seafarer receiving remuneration in non-resident external or NRE account maintained with an Indian bank.
Following the decision of the Finance Minstry, Amar Thakur, General Secretary, MUI, said, “This decision is a huge boost for over 1.3 lakh Indian seafarers, as tax-free income has always been an added attraction for Indian merchant navy workforce, which contributes around $40 million annually to our country's exchequer.”
However, NUSI General Secretary Abdulgani Serang said, "Income tax exemption to Indian seafarers will certainly strengthen the Centre’s “Maritime Agenda 2020' aimed at increasing the global share of Indian seafarers to 9 per cent from7 per cent currently”.
A judgement delivered by the Kolkata income tax tribunal in August 2016, mandated Indian merchant navy workforce to pay taxes in India, which shattered the morale of Indian seafarers. Both MUI and NUSI jointly challenged the tribunal’s decision in August 2016 in the Kolkata High Court through Messer Dave & Padvekar Associates and Advocates.