Adani Ports and Special Economic Zone Ltd (APSEZ) has established a ship leasing unit in Gujarat International Finance Tec-City (GIFT City), India’s first International Financial Services Centre (IFSC), in order to bring India-focused business back to the country from abroad. This move is seen as a significant boost to the government’s efforts to onshore such business activities.
The newly formed subsidiary, Poseidon Leasing IFSC Ltd, is a wholly owned subsidiary of APSEZ’s Shanti Sagar International Dredging Ltd. This new company will be involved in ship leasing, including operating lease or financial lease of ships and ocean-going vessels and their engines. The establishment of this unit is part of the International Financial Services Centres Authority’s (IFSCA) initiative to attract shipping companies to set up ship leasing units in the GIFT City, offering a range of tax incentives and exemptions.
IFSC entities enjoy various tax and regulatory benefits, such as a ten-year tax holiday, exemption from capital gains during the tax holiday, stamp duty exemption for five years, and additional exemptions on income generated from leasing ships. The GST does not apply to the import of vessels, and entities operating from IFSC are considered non-resident from the Foreign Exchange Management Act (FEMA) perspective, making borrowings easier. After the initial tax holiday, IFSC entities can benefit from the same tax benefits available to fleet owners operating in the domestic tariff area (DTA) regime.