Tonnage Tax

Available to a Qualifying Company

 Indian company

 Place of effective management is India

 The board owns at least one Qualifying ship

 Main object of company is to carry on the

business of operating ships
What is a qualifying ship

 Sea going ship or a vessel with a capacity of at

least 15 Net tonnage

 Registered under Merchant Shipping Act.

 A valid
Exceptions: Cruise ships, Fishing certificate
Vessel, Factoryofships,
its Net tonnage
offshore is in force
installations
etc are not qualifying ship
 How to calculate tonnage tax
Multiply the above daily income with the number of days the ship was in
operation

Net Tonnage of qualifying ships Daily Tonnage

Income
Upto 1000 tons Rs. 70 per 100 ton
More than 1000 tons but upto 10000 Rs. 700 + Rs.53 for
ton each 100 ton in
excess of 1000 tons
More than 10000 ton but upto 25000 Rs.5470 + Rs.42 for
tons each 100 Tons in
excess of 10000
tons
More than 25000 tons Rs.11770 + Rs.29 for
each 100 tons in
excess of 25000
tons
Rules

 Find out Net tonnage of each qualifying ship

 Ignore any tonnage in terms of kilograms

 Round off the balance tonnage to the nearest multiple of 100.

 Apply the daily income on the tonnage as calculated above.

 No deduction under any other provisions of the act to be allowed.

 The company has to transfer 20% of Book Profits to Tonnage Tax Reserve A/c
 Actual Income

Profit from CORE Profit from NON CORE

activities activities

If the profit from Non core activity exceeds

0.25% of turnover from core activities then
such non core income shall be seperated
and such non core income shall be
computed in accordance with PGBP
Other pointers

•  MAT provisions not to apply to such companies.

•  Once a company opts for T/T the scheme shall be in force for 10 years.

•  In certain cases the T/T scheme shall be withdrawn – In such cases the option
to re-opt into the T/T scheme shall not be available for a period of 10 years.

•  Separate books to be maintained – to be audited