Indians rejoice, your dream cruise vacations are set to get cheaper with the The Central Board of Direct Taxes (CBDT) amendments notification to the Income-Tax Rules, outlining the conditions for the applicability of the presumptive taxation regime for non-resident cruise ship operators. An exemption has been provided for income of a foreign company from lease rentals of cruise ships, received from a related company operating such ships in India.
“The tax exemption for cruise-shipping industry will make India an attractive cruise tourism destination by attracting global tourists and popularizing cruise shipping with domestic tourists,” claimed tour operator Gaurav Rana organising custom tailored cruise travels for families.
The presumptive tax exemptions for non-residents engaged in the business of operating cruise ships stipulates passenger ship being operated must have a carrying capacity of more than 200 passengers or a length of 75 meters or more, be used for leisure and recreational purposes, and have appropriate dining and cabin facilities for passengers.
The tour and travel industry has welcomed the tax exemption to promote cruise tourism in India. “Indians go to Singapore or Europe for cruise because taxation are too high. The infrastructure like terminals and ancillary services for internationql cruise ship are now capable to handle big vessels,” said Abhijit Patil, specialise in Cruise vacations.
According to senior tax officials, the cruise ship being operated must also be on a scheduled voyage or shore excursion and touching at least two sea ports in India or the same sea ports in India twice. “the ship must be primarily for passenger transport not for cargo and must be operated according to the procedures and guidelines issued by the Ministry of Tourism or Ministry of Shipping,” said CBDT in a statement.
The five-year Cruise Bharat Mission launched aims to boost cruise tourism in India with a target of 1 million passengers and the creation of 400,000 jobs by 2029. The mission includes setting up a dedicated fund, easing cabotage regulations and offering financial incentives.
