Union ministry of finance has granted income tax exemption to Indian seafarers sailing aboard foreign ships outside India for more than 182 days a year.

Through the Central Board of Direct Taxes (CBDT) circular no. 13/2017, the ministry of finance has issued a clarification regarding liability to income-tax in India for a non-resident seafarer receiving remuneration in NRE (non resident external) account maintained with an Indian bank.

With this, the government has accepted the long-pending demand of India’s leading merchant navy Unions, the Maritime Union of India (MUI) and the National Union of Seafarers of India (NUSI).

MUI general secretary Amar Thakur said, “This decision is a huge boost for over 1.3 lakh Indian seafarers, as tax-free income has always been an added attraction for Indian merchant navy workforce, which contributes around $40 million annually to our country’s exchequer.”

“Income tax exemption to Indian seafarers will certainly strengthen the centre’s ‘Maritime Agenda 2020’ aimed at increasing the global share of Indian seafarers to 9% from 7% currently,” said NUSI general secretary Abdulgani Serang.

A judgement delivered by the Kolkata income tax tribunal in August 2016 mandating Indian merchant navy workforce to pay taxes in India had shattered the morale of Indian seafarers. Subsequently, MUI and NUSI had jointly challenged the tribunal’s decision in August 2016 in the Kolkata High Court through Dave & Padvekar Associates and Advocates.

Thereafter, representatives of MUI and NUSI sought centre’s intervention in the interest of Indian seafarers through a series of meetings in New Delhi with CBDT chairman Sushil Chandra, union shipping minister Mansukh Mandavia and union finance minister Arjun Meghwal along with advocate R S Padvaker, ex judge ITAT and member of parliament Gajendara Singh Shikhawat.