CBDT circular on interest related to non-resident engaged in shipping business


Whether non-resident assessees engaged in business of carriage by shipping of passengers and goods, etc., shall neither be liable to pay interest under sections 234B and 234C nor entitled to interest under section 244A in respect of their income attributable only to business of such carriage of passengers and goods, etc.

Circular : No. 730, dated 14-12-1995.

1. Section 172 of the Income-tax Act, 1961, deals with shipping business of non-residents. The scheme of section 172 is that every time a ship belonging to or chartered by a non-resident makes a voyage from a port in India, carrying passengers, live stock, mail or goods, shipped at the airport, 7½ per cent of the amount paid or payable on account of the carriage of the passengers, etc., is taken as the income and tax levied on such income at the rate applicable to a foreign company. The rate, at present, is 55 per cent.

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