FSUI
Welcomes Move By Ministry; Real Income Of Seamen Could See a Rise Of As Much As
30%
A long pending demand of
seafarers working on Indian flag ships and the merchant navy trade unions are
all set to get fulfilled with the finance ministry in-principle agreeing to
extend non-resident Indians (NRIs) status and the subsequent income tax benefit
to the seafarers while in Indian waters as well. At present over 50,000
seafarers working on Indian flag ships do not enjoy the benefit. It is restricted
only to seamen employed in ships with foreign flag.
Currently seamen employed in
Indian flag vessels become eligible for NRI benefits in Income Tax only if he
spends more than 183 days in foreign water. So, if a seafarer serves for 200
days in a foreign going ship that spent twenty days in the Indian water
collecting cargo from, for instance, Mumbai, Mangalore and Kochi ports, the
seaman would not become eligible for NRI status. The number of days served by
him in Indian water will be deducted from the total number of days served on
the ship, and if the tally falls short of 183 days, then he will become liable
to pay full taxes.
Once the new guideline comes
into effect, even the days spent in domestic water will be taken into
consideration along with the days spent in foreign water. “Our former Vice
President, the late Dr. M. K. Pandhe had pointed out to Dr. Pranab Mukherji,
the then Finance Minister, in the pre-budget meeting of 2009 and through various
other letters and petitions, that the Indian officers and seamen who are
working onboard the Indian flag ship is subjected to the Income Tax Process, as
taxes, whereas the officers and seamen of the Foreign flag vessels are exempted
by the Indian Government,” says Mr. Naresh Birwadkar, General Secretary,
Forward Seamen’s Union of India (FSUI). “With the correction of disparity,
seamen employed by Indian ships could end up saving as much as 30% of the their
pay.”
“Once the new directive is
issued, Indian officers and seafarers will find it equally attractive to be
employed by Indian vessels. Indian officers and seafarers currently prefer to
work for foreign flag vessels, making a dent in the Indian Shipping Industry
creating shortage of officers. Many Indian flag ships are standing without
proper manning and unable to sail out as key officers are not forthcoming. The
new structure will hopefully correct the imbalance,” adds Mr. Birwadkar.
Forward Seamens’ Union of
India (FSUI), the largest trade union of Indian seafarers has been demanding an
NRI status and review on tax structure for them. “We have been advocating with
the various central government agencies for the
same. Now, the finance ministry has agreed. A formal notification will be
issued soon,” said FSUI’s General Secretary Naresh Birwadkar.
