The tonnage tax regime, on the other hand, envisages tax calculation based on a notional annual income on the net registered tonnage. This ensures that the tax burden is known in advance and is neutral to the financial performance of the company. Following are the Budget recommendations on tonnage tax (basis of calculation: notional profit /day/100 NRT or net registered tonnage).
- A minimum lock in of 10 years once a company opts for the tonnage tax.
- Once the tonnage tax is opted for, at least 20 per cent of the book profit should be credited to a reserve account to be utilised only for acquisition of ships within eight years.
- Tax is payable at prevailing corporate tax rates on the notional profit calculated as per the below method.
As per the recommendations, tax rates for Indian firms would range from 1 to 3 per cent depending on profits before tax. The tax payable is depending on the capacity you own and is irrespective of the amount of profit/loss you make in any year. In the short term, we expect GE Shipping and SCI to save Rs 12-15 crore and Rs 20 crore in taxes respectively.
| Vessel type | Daily tonnage income |
| Upto 1,000 NRT | Rs 46 for every 100 tonnes |
| 1,000-1,0000 NRT | Rs 460 plus Rs 35 for every 100 tonnes exceeding 1000 tonnes |
| 10,000-25,000 NRT | Rs 3,610 plus Rs 28 for every 100 tonnes exceeding 10,000 tonnes |
| Above 25,000 NRT | Rs 7,810 plus Rs 19 for every 100 tonnes exceeding 25,000 tonnes |