MINISTRY OF
SHIPPING, ROAD TRANSPORT & HIGHWAYS
(Department of Shipping)
NOTIFICATION
New Delhi, the 12th December, 2007
S.O. 2132 (E) - In pursuance of Section 115VU of the Income Tax Act,1961, the Central Government had earlier notified vide S. O. No. 1436(E) dated 30.12.2004 the guidelines for providing training by Shipping Companies opting for Tonnage Tax scheme under Chapter XII-G of the Income Tax Act,1961. The Central Government hereby notifies following amended guidelines.
1. A tonnage tax company shall have trainee officers on board all or any of its Qualifying Ships and shall ensure that the aggregate of training man-days on all Qualifying Ships in a financial year is not less than the minimum training requirement.
Explanation: For the purposes of these Guidelines
a) A 'trainee officer' means a cadet passing out of any DGS approved pre-sea training course and possessing the requisite qualifications specified under the Manual on Maritime Education & Training Assessment (META) published by the Director General of Shipping and / or as per guidelines prescribed by the Director General of Shipping, from time to time, who joins a ship as a 'trainee officer”.
b) The 'Trust' means the 'Maritime Training Trust' settled by the Directorate General of Shipping in consultation with INSA
c) The 'minimum training requirement' for a financial year shall be:
i) In case of ship owned or chartered-in by the tonnage tax company, (other than space or slot charters), the number of man-days shall be equivalent to the number of days for which such ships are operated by the tonnage tax company during the financial year multiplied by the number of trainee-officers required on such ships based on one and half (1.5) trainee officer for every ten (10) complement as per the Minimum Safe Manning Document or pro rata thereof.
ii) In case of space charters or slot charters, the number of man-days to be calculated by dividing the Net Tonnage of slot / space charters of the tonnage tax company by the Net Tonnage Factor and multiplying the result by number of days for which such ships are operated by the tonnage tax company during the financial year and shall include any shortfall of the immediately preceding financial year brought forward in accordance with clause 12.
Explanation 1: For the purpose of this clause, the Net Tonnage of slot / space charters shall be Net Tonnage as calculated under the notification issued in the official gazette vide Explanation to section 115VG of the Income Tax Act, 1961,
Explanation 2: The 'Net Tonnage Factor' shall be the factor notified by the Director General of Shipping for each financial year calculated as the aggregate Net Tonnage of all qualifying ships registered under the Merchant Shipping Act, 1958 at the end of the preceding financial year divided by the total number of such ships at the end of the preceding financial year and shall be notified by the Director General of Shipping within 60 days from the beginning of each financial year.
d) 'Indian National Shipowners' Association' means the association of Indian ship-owners registered under section 25 of the Companies Act, 1956.
e) 'Financial Year' means the period beginning on April 1 and ending on March 31.
2. a) A tonnage tax company shall recruit trainee officers on board all or any of its qualifying ships from their own resources as a trainee-officer and shall provide the training in accordance with the Manual on Maritime Education & Training Assessment (META) and / or as per training guidelines prescribed by the Director General of Shipping, from time to time.
b) In the event a tonnage tax company is not in a position to meet the training requirement by virtue of the type of vessels it owns or its trading pattern or for other reasons to be specified and approved by the Director General of Shipping, such a company is permitted to recruit trainee officers and shall provide training as per clause 2(a) above in other qualifying vessels of tonnage tax opted companies or in qualifying vessels of Indian flag companies or in qualifying vessels of foreign flag companies whose manning agents are registered with the DGS by having contractual arrangements for training trainee officers with such companies. All payments towards such training arrangements should be fully borne by the tonnage tax company sponsoring such arrangements and no part of the cost of such arrangements should be recovered from the trainee officer.
c) When a tonnage tax company is meeting the minimum training requirement as per clause 2(b) above, such minimum training requirement would be deemed to be met by only the company whose trainee officers have been so placed on board for training and not for the company by whom the vessel is owned or operated.
3. All such trainee officers on board shall be in addition to the normal ship's complement. Any trainee officer on the board of a Qualifying Ship shall not be taken into account for the purpose of determining the minimum safe manning requirements prescribed by the Director General of Shipping.
4. The amount of administrative cost payable by the tonnage tax company to the Trust and stipend payable by the tonnage tax company to the trainee-officer shall be prescribed by the Director General of Shipping, from time to time.
5. The administrative cost payable by the tonnage tax company to the Trust under clause (4) shall be paid in advance for six (6) months.
6. The Trust funds may be used for meeting all the administrative expenses relating to the Tonnage Tax cell to be created by the Director General of Shipping and for the promotion of training and employment of Indian seafaring officers.
7. On completion of on-board training with a tonnage tax company and successful acquisition of a Certificate of Competency, the trainee officer shall be obliged to offer his first three years of service (after deducting leave periods) to the said tonnage tax company, if the tonnage tax company is desirous of availing of the 3 years' service from the trainee officer and provided the said tonnage tax company is ready and willing to employ the said trainee officer under articles on usual terms and conditions as are applicable to the other officers of the company at that level. In consideration of the facility of training offered by the tonnage tax company to the trainee officer, the trainee officer shall submit an undertaking to the tonnage tax company, before being accepted for training, to the effect that he, the trainee officer, shall not serve with any other shipping company on the strength of the Certificate of Competency awarded to him, until he accepts the offer of the tonnage tax company for employment, provided, however, that if the tonnage tax company does not make an offer of appointment within one months of the trainee officer acquiring his Certificate of Competency and reporting to the tonnage tax company, the trainee officer will be deemed to have been released of all his obligations to serve the tonnage tax company, and would be free to seek jobs with any other shipping company. However, the tonnage tax company will inform Indian National Shipowners' Association and Directorate General of Shipping within fifteen days of completion of training if it is not offering the to the trainee on his acquiring Certificate of Competency. In such case trainee officer may choose the offer received from other Shipping Companies. DG (Shipping) will maintain a list of such trainee officers who are not offered job by the tonnage tax company and facilitate placement of such trainee officers. DG(Shipping) will coordinate and issue further instructions in this regard.
8) The following periods shall be deemed as the period during which training is imparted by the tonnage tax company -
i) The period for which a trainee officer is absent on the board of a Qualifying Ship due to delay in reporting by the trainee-officer or a delay for any reason beyond the control of the tonnage tax company, where such delay has been intimated by the company to the Director General of Shipping.
ii) Where the training is terminated due to any reason other than the scheduled completion of the training, the period between such termination and deputation of another trainee officer at the next port of call in India provided the tonnage tax company has given notice to the Director General of Shipping within 30 days of such termination.
9) i) The tonnage tax company shall intimate the Director General of Shipping about the scheduled period of training in respect of each of the trainee officers and the Qualifying Ship(s) on which he would be deployed, within 30 days of the start of training and any change therein, within fifteen (15) days.
ii) The tonnage tax company shall intimate the Director General of Shipping about the actual period of training as well as the Qualifying Ship(s) on which each trainee officer was deployed within 30 days of the date of completion of training.
10) The tonnage tax company shall furnish an annual return to the Director General of Shipping within 45 days of the end of the financial year, providing the following details-
a) The calculation of its minimum training requirement for the financial year in accordance with Explanation (c) to clause (1) ;
b) The period for which it has actually imparted training supported by a summary of the man-days of training with respect of each of the trainee officer ;
c) The period for which it is deemed as imparting the training under clause 8;
d) The shortfall, if any, in meeting its minimum training requirement, and
e) The shortfall to be carried-forwarded, if any, under 12(i) to the subsequent financial year.
f) The shortfall for which payment has to be made under clause 12(ii)/clause 13.
11) i) Where the Director General of Shipping is not satisfied with the details submitted in the annual return in accordance with clause 10, he shall serve on the tonnage tax company a notice requiring it to produce within such time, not being less than 30 days and not more than 60 days, any particulars specified therein and shall provide an opportunity of hearing to the tonnage tax company.
However, in case of any mis-reporting by companies on this account Directorate General of Shipping shall have the right to reopen and reinvestigate the case and take necessary action as deemed fit.
ii) After hearing such evidence and after taking into account such particulars as the tonnage tax company may produce, the Director General of Shipping shall determine the compliance by the tonnage tax company of the training requirements and shall issue a certificate stating whether or not the tonnage tax company has complied with the training requirements in respect of the relevant financial year and in case of non-compliance, specifying the number of days of shortfall in meeting the minimum training requirement to be carried forward to the subsequent financial year and the number of days of shortfall in relation to which additional payment may be payable in accordance with clause (12)/clause (13).
12) i) In case of a shortfall in meeting the minimum training requirement by a tonnage tax company for any financial year is upto twenty five percent of the minimum training requirement, the number of days of such shortfall shall be carried-forward to the subsequent financial year.
ii) In case of a shortfall in meeting the minimum training requirement by a tonnage tax company exceeding twenty five percent of the minimum training requirement for any financial year, the tonnage tax company shall pay to the Trust penalty by way of an amount as prescribed by the Director General of Shipping from time to time in lieu of the obligation for training.
iii) The tonnage tax company shall be liable to pay simple interest at one percent for every month or part of a month comprised in the period commencing from the day immediately following the expiry of 30 days from the date of receipt of the order under sub-rule (ii) and ending with the day on which such penalty payment is made.
Explanation-For
the purpose of these Guidelines, any shortfall in meeting the minimum
training requirements brought forward from any preceding financial years
shall not be considered for calculating more than twenty five percent of the
minimum training requirement for the year.
13) In the event that the tonnage tax company is not in a position to meet any training requirement by virtue of the type of vessels it owns or its trading pattern or by arranging training in qualifying vessels of other tonnage tax companies / Indian Companies / foreign companies whose manning agents are registered with the DGS as per clause 2(b), such tonnage tax company may opt to pay penalty to the Trust in lieu of training and the Directorate General of Shipping may on the merit of each case grant exemption to the Tonnage Tax Company from meeting the minimum training requirement and permit it to pay penalty as prescribed by the Director General of Shipping from time to time.
14) Training requirements under these guidelines shall be applicable from 01-04-2007.
15) Saving Clause -
a) The trainee officers engaged by the tonnage tax companies for on board training would continue to be regulated by the relevant provisions Ministry of Shipping Gazette Notification S.O. 1436(E) dated 30.12.2004.
b) The trainee officers engaged by the tonnage tax companies for on board training would not be required to pay the training fees for their period of training after 1.4.2007.
16) The Director General of Shipping after giving notice in writing of not less than ten days to the tonnage tax company, can examine the records of such tonnage tax company to verify that the information given in relation to the annual return is correct. The tonnage tax company shall make provision for a suitable system to enable and to facilitate the checking of its records and documentation.
Note : The Director General of Shipping will notify the further circular/instructions on other relating aspects including various forms and describing the system for administering the minimum training requirements by tonnage tax companies separately.
[F. No.
SD-11018/12/2002-MD]
[RAJEEV GUPTA]
Jt. Secretary
