A new tax-friendly regime in India’s shipping industry is gaining traction as several companies register under the International Financial Services Centre (IFSC) Authority in Gujarat. The Ripley Group, Bothra Group, Star Matrix, Alphard Maritime Group, and Propel Shipping are among the eight companies seeking to tap into this avenue to access Indian cargo. The IFSC offers tax and regulatory benefits, such as a ten-year tax holiday for IFSC entities, making it an appealing option for fleet owners.
Many companies are exploring the possibility of setting up a unit in the IFSC to access these benefits. The IFSC is seen as a regime that is equal to or better than Singapore for tax purposes, especially for accessing Indian cargo. The benefits of operating from the IFSC include being considered non-resident from a foreign exchange management act (FEMA) perspective, making it easier to do business, and being exempt from the goods and services tax (GST) for the import of vessels. ECB norms are also not applicable to IFSC entities, making borrowing easier.
One of the most attractive features of the IFSC is the ten-year tax holiday available to entities operating there. After the tax holiday period, IFSC companies can enjoy the same tax benefits as fleet owners operating in the domestic tariff area (DTA) regime. This makes the IFSC a lucrative option for companies in the shipping industry looking to benefit from a favorable tax environment and access Indian cargo.
In summary, the IFSC in Gujarat is gaining popularity among shipping companies in India as a tax-friendly regime that offers advantages such as a ten-year tax holiday and ease of doing business. Several companies have already registered under the IFSC Authority to tap into these benefits and explore the possibility of setting up a unit in the IFSC. With its attractive tax incentives, the IFSC is becoming an appealing option for fleet owners in the country.
Share it now