Terming the Budget 2020 proposal to tax NRIs in India as "draconian", maritime unions on Monday said they will call on Union Finance Minister Nirmala Sitharaman to express their concerns.
Countries like Philippines and Ukraine compete with India for global share of seafarers, but they do not levy high income taxes on their seafaring citizens, leading maritime unions said.
The Maritime Union of India (MUI) and National Union of Seafarers of India (NUSI) have initiated a strong protest campaign against the proposed change in the Income Tax Act after Budget 2020 proposed to tax Non Resident Indians (NRI) in India, who are not paying tax anywhere in the world, a joint statement from MUI and NUSI said.
Also, with the period of stay in India being reduced from 181 to 120 days, people have to spend more time abroad more than 245 days compared to 183 days earlier, will get the NRI status as proposed in Budget 2020, it added.
"It is a double whammy as Indian seafarers will have to pay income tax on the income generated from sailing aboard cargo ships across the globe for atleast 245 days in a year.
"We have started collecting the protest letters signed by all members of NUSI and intend to submit them to both, Ministry of Finance and Ministry of Shipping within few days. Our nationwide protest against this Draconian and frustrating tax proposal is going to escalate in various forms across the country in the days to come," said NUSI General Secretary, Abdulgani Serang.
The statement said a joint delegation of MUI and NUSI is likely to meet Finance Minister, Nirmala Sitharaman and Shipping Minister, Mansukh Mandavia to hand over the protest letters signed by Indian seafarers.
MUI General Secretary, Amar Singh Thakur said, "such a tax proposal is going to retard the growth of Indian ship-manning sector as henceforth attracting young Indians to join merchant navy will be extremely difficult. Until now, merchant navy personnel enjoyed benefits similar to non-resident Indians and did not pay taxes in India.