Search EngineSitemap-AA+A हिन्दी
National Emblem Directorate General of Shipping, Government of India
नौवहन महानिदेशालय
Directorate General of Shipping
Ministry of Ports, Shipping and Waterways
Government of India
image image
Welcome to the Personnel Branch
Notification, Order, Circular
Policies and Guidelines
Links
HR Status
Media Gallery
Latest News
Welcome to the Vigilance Branch
Act/Circulars/Orders
Handling of the Complaints
Other obligatory functions
Media Gallery
Latest News
Welcome to the Coordination Branch
Media Gallery
Latest News
Welcome to the Administration Branch
Acts, Rules, Regulations and Guidelines
Media Gallery
Latest News
राजभाषा अनुभाग
संवैधानिक प्रावधान
उपयोगी लिंक
सूचना
नगर राजभाषा कार्यान्वयन समिति
मीडिया गैलेरी
डाउनलोड्स
ताजा खबर
Welcome to the NMDC Branch
Media Gallery
Latest News
Secretariat
Former Director General of Shipping
Media Gallery
Latest News
Welcome to the RTI Branch
RTI Branch Acts and Rules
Procedure Related With
Media Gallery
Latest News
Mercantile Marine Departments
Ship Registration
Survey & Inspection
Examination & Certification
Other Area
Support & Resource
Notices & Circulars
Downloads
Finance, Accounts, Audit & Public Procurement Personnel Branch Vigilance Branch Coordination Branch Administration Branch राजभाषा अनुभाग NMDC Branch DGS Secretariat RTI Mercantile Marine Departments

Tonnage Tax

Tonnage Tax Scheme

  • Tonnage tax is a presumptive taxation method that enables shipping companies to choose taxation based on the net tonnage of their vessels instead of their actual variable business profits or losses.
  • This scheme was introduced in the Finance Bill of 2004 and came into effect on April 1, 2004. Initially, the benefits of the tonnage tax were applicable only to shipping companies. However, beginning with the fiscal year 2005-06, these tonnage tax benefits have also been extended to dredging companies.
  • Section 115VU of the Income Tax Act, 1961, currently in effect, stipulates that a tonnage tax company, once its option has been approved under subsection (3) of section 115VP, must comply with the minimum training requirements for trainee officers as outlined in the guidelines established by the Director-General of Shipping and published in the Official Gazette by the Central Government.
  • The Ministry of Shipping, Government of India, issued guidelines for training provided by shipping companies that opt to participate in the Tonnage Tax scheme under Chapter XII-G of the Income Tax Act, 1961, through Gazette Notification No. S.O. 1436(E) dated December 30, 2004.
  • For the purposes of these Guidelines, as outlined in clause 1(b) of the aforementioned Notification, the term refers to the Training Trust (MTT), established by the Directorate General of Shipping in consultation with the Indian National Shipowners' Association (INSA). The MTT was created by the Director General of Shipping, acting as the through a Deed of Trust dated December 15, 2004, which was registered with the Charity Commissioner in Mumbai.
  • The guidelines were amended by Gazette Notification No. S.O. 2132 (E) dated December 12, 2007.
  • The Gazette Notification dated December 12, 2007, concerning training guidelines for companies that have opted for tonnage tax, has established the Minimum Training Requirement (MTR) to be fulfilled by all such companies as 10:1.5 of the Minimum Safe Manning Document (MSMD) of a ship. This means that for every 10 officers and crew members listed in the ship's MSMD, 1.5 trainees must be trained within a financial year.
  • Companies subject to the tonnage tax must obtain a Merchant Tonnage Tax Compliance Certificate issued by the Director General of Shipping and attach it to their annual income tax return.
  • The Directorate General of Shipping has issued several circulars to regulate the Tonnage Tax scheme. They are as follows:
    1. The Tonnage Tax Cell Circular No. 2 of 2005, dated January 28, 2005, was issued by the Directorate General of Shipping. It outlines the system for administering the Minimum Training Requirements that shipping companies must adhere to after opting for the Tonnage Tax regime under Chapter XII-G of the Income Tax Act of 1961, as amended by the Finance Act of 2004. This Circular specifies various returns and forms that companies opting for the Tonnage Tax must submit.
    2. TTC Circular No. 8 of 2005, dated November 28, 2005, establishes a late submission fee of Rs. 10,000 (Rupees ten thousand only) per week, or any portion thereof, for delays in submitting the BTC, Annual Adjustment, and Annual Return as specified in TTC Circular No. 2 of 2005, dated January 28, 2005.
    3. TTC Circular No. 1 of 2009, dated March 2, 2009, established the penalty amount that a tonnage tax company must pay for failing to meet the Minimum Training Requirement within a financial year.
    4. To cover the operational expenses of the Marine Training Trust (MTT), the Directorate General of Shipping (DGS) established an administrative cost of Rs. 500 per trainee per month, which was recoverable from the tonnage tax company in accordance with TTC Circular No. 1 of 2009, dated March 2, 2009. The DGS has now revised the administrative cost to Rs. 1,000 per trainee per month, as stated in DGS Order No. 6 of 2023, dated February 22, 2023.
  • The details of Tonnage Tax companies for previous years are as follows:
    FY No. of Companies No. of Vessels Net Tonnage No. of Trainees (Training berths)
    2018-19 63 497 4662213 986
    2019-20 58 450 4256766 881
    2020-21 54 437 4242752 874
    2021-22 54 442 4048107 867
    2022-23 56 468 4445818 921
    2023-24 61 470 4357443 1042

Directorate General of Shipping. All rights reserved.