Stories
GST Council To Ease Tax Burden On Foreign Shipping Lines And Seafarers
- •The GST Council is likely to exempt foreign shipping lines from taxes on backend administrative support provided by overseas headquarters.
- •The proposed change aims to align tax treatment with global shipping business structures and could waive off thousands of crores in tax liabilities.
- •The Seamen’s Provident Fund Organisation may be exempted from GST, bringing it on par with the Employees’ Provident Fund Organisation.
- •Services provided to overseas customers by shipping and logistics companies through foreign offices are set to receive export treatment with nil GST.
- •Tax exemptions for defence vessels and submersibles will be aligned with the Customs Tariff Act to clear up classification disputes.
Key Questions Answered
The GST Council is likely to exempt foreign shipping lines from the 18 percent tax on backend administrative support provided by overseas headquarters to Indian offices, lowering operational costs and waiving thousands of crores in potential tax liability.
Shipping and logistics companies that provide services to overseas customers through foreign offices are set to receive export treatment for such supplies, meaning the service will qualify as exports and attract zero GST instead of the previous 18 percent rate.
The council aims to anchor tax exemptions for defence vessels directly to their tariff classification under the Customs Tariff Act to serve as a technical correction, resolving disputes where specialised platforms like unmanned submersibles faced standard 18 percent GST rates due to lacking specific HSN entries.
