A presumptive taxation regime for non-residents engaged in the operation of cruise ships (section 44BC) was introduced by the Finance (No. 2) Act, 2024. This measure is aimed at promoting investment and generating employment. Further, income derived from lease rentals of cruise ships by foreign companies has been exempted, subject to specific conditions.
New Income Tax Rule 6GB
New income tax Rule 6GB regarding ‘conditions for non-resident, engaged in the business of operation of cruise ships for section 44BBC’ has been inserted vide Income Tax Notification 9/2025 dated 21st January 2025, detailing the conditions and procedures applicable to this regime.
Key Provisions of the Regime
Under this regime, foreign companies enjoy tax exemptions on income from lease rentals of cruise ships provided they meet specific conditions. These exemptions apply if the income is derived from a related company that operates the cruise ship in India. Key provisions of new IT Rule 6GB are summarised here-under:
A. Scope of Applicability
i) The regime is applied to non-residents engaged in the business of operating cruise ships.
ii) Income derived from lease rentals by foreign companies, when received from related companies operating such ships in India, is qualified for exemption.
B. Conditions for Non-Residents
To qualify for the presumptive taxation regime, the following conditions must be met:
a) Passenger Ship Specifications: The cruise ship must have a passenger capacity of over 200 or a length of at least 75 meters. It must also feature appropriate dining and cabin facilities catering to leisure and recreation.
b) Voyage Requirements: Scheduled voyages or shore excursions must be operated by the ship, touching at least two different sea ports in India, or the same port twice.
c) Purpose of Operations: Passengers should primarily be carried by the ship and not cargo.
d) Compliance with Guidelines: Procedures and guidelines issued by the Ministry of Tourism or Ministry of Shipping must be adhered to by operations.
This regime is viewed as a focused step toward enhancing the cruise tourism sector while being aligned with broader economic objectives.
CBDT Income Tax Notification 9/2025 dated 21st January 2025: New Rule 6GB on conditions/ procedures for presumptive taxation regime u/s 44BBC for non-residents engaged in operation of cruise ships