Rule 146: Tonnage-tax forms, deemed tonnage and charter calculations
Rule 146 brings together several procedures for the tonnage tax scheme: the option or renewal application, deemed-tonnage conversions, specified incidental activities, charter-in ratio and audit report. Each part serves a different parent-section requirement.
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Rule 146 - Rules related to application for exercising the option for tonnage tax scheme and other matters related to it
For the purposes of Tonnage Tax Scheme under Chapter XIII-G of the Act:–– (a) an application under section 231(1) to opt for the Tonnage Tax Scheme, or under section 231(10) for renewing the option for the Tonnage Tax Scheme, as the case may be, shall be made in Form No. 80 and shall be verified as specified therein; (b) deemed tonnage under section 227(4)(b) in respect of an arrangement mentioned in column B of the following Table shall be computed on the basis as specified in column C thereof:
Sl. No. Arrangement Basis of computation 1 Purchase of slots and slot charter 2.5 TEU = 1 Net Tonnage (1 NT), where TEU is Twenty foot Equivalent Unit (Container of this size). 2 Sharing of break-bulk vessel (i) Where cargo is restricted by volume, 19 cubic meter (cbm) = 1 net tonnage (1 NT); and (ii)where cargo is restricted by weight, 14 metric tons = 1 net tonnage (1 NT); (c) the incidental activities referred to in section 228 (7) shall be the following,: — (i)maritime consultancy charges; (ii)income from loading or unloading of cargo; (iii)ship management fees or remuneration received for managed vessels; and (iv)maritime education or recruitment fees;
(d) the limit for charter-in of tonnage of the qualifying ships referred to in section 232(15) to (20) during any tax year, shall be computed by dividing the total number of chartered-in ton days by the total number of ton days operated by the company; and
(e) the audit report of a qualified company, required to be furnished under section 232(21)(b) shall be in Form No. 81.
Rule breakdown
Option and renewal use Form 80
An application to opt under section 231(1), or to renew under section 231(10), is made in Form 80 and verified as specified.
Establish eligibility and the relevant parent-section timing first. The form prescription does not itself grant entry into the scheme.
Apply the deemed-tonnage conversion for the arrangement
For purchased slots and slot charter, 2.5 TEU equals 1 net tonnage. For shared break-bulk vessels, the basis is 19 cubic metres per net tonnage if volume-restricted, or 14 metric tons per net tonnage if weight-restricted.
For illustration, 250 TEU corresponds to 100 net tonnage under the slot conversion. Select the applicable arrangement and restriction before calculating; do not mix volume and weight measures.
The listed incidental activities are specific
The list comprises maritime consultancy charges, loading or unloading cargo income, ship-management fees or remuneration for managed vessels, and maritime education or recruitment fees.
Classify receipts against the list and read the parent section for the resulting treatment and limits. The rule does not describe every maritime business receipt as incidental income.
Charter-in measurement is a ton-days ratio
The stated charter-in limit calculation divides total chartered-in ton days by total ton days operated by the company in the tax year.
For example, 20,000 chartered-in ton days and 100,000 total operated ton days produce a 20% ratio. Compare that result with the current parent-section limit and conditions rather than inventing a separate limit from this rule.
The audit report is Form 81
The specified company audit report required under section 232(21)(b) is Form 81. Keep the arrangement records, tonnage support, ton-day calculation and income classification ready for the report.
Coordinate the application, annual computation and audit as distinct obligations; Form 80 does not replace Form 81.
Key takeaways
Form 80 for option or renewal
Check the corresponding parent-section conditions.
Arrangement-specific conversions
Slots and break-bulk cargo have different measures.
Ton-days ratio
Use chartered-in and total operated ton days.
Form 81 audit
The annual audit report is a separate obligation.
Practical checklist
- Identify the precise arrangement and conversion.
- Maintain tonnage and ton-day evidence.
- Separate incidental receipt categories.
- Retain Forms 80 and 81 as applicable.
Avoid
- Do not substitute vessel counts for ton days.
- Do not treat all maritime receipts as listed incidental activities.
FAQs
What form is used to renew the option?
Form 80 for the section 231(10) application, verified as specified.
Is one TEU equal to one net tonnage?
No. The table states 2.5 TEU equals 1 net tonnage.
Does the charter-in ratio use the number of vessels alone?
No. It uses chartered-in ton days divided by total operated ton days.
Which form is the audit report?
Form 81.
Glossary
- TEU
- Twenty foot Equivalent Unit, the container-size measure used in the slot conversion.
- Ton-days ratio
- Chartered-in ton days divided by total ton days operated by the company.