The Maritime Association of Nationwide Shipping Agencies (MANSA) has urged the Central Board of Direct Taxes (CBDT) to urgently address recurring administrative and system-related difficulties faced by foreign shipping lines and their Indian agents in processing assessments under Section 172 of the Income Tax Act, 1961, and the corresponding provisions under the new Income Tax Act, 2025.
In a representation to Rahul Kumar, Commissioner of Income Tax (International Taxation)-2, Mumbai, MANSA highlighted what it described as a growing operational deadlock involving PAN requirements, generation of Document Identification Numbers (DINs), and processing of Double Taxation Avoidance Agreement (DTAA) relief for non-resident shipping companies.
According to MANSA, while port clearance and No Objection Certificates (NOCs) are generally processed without requiring an Indian PAN from foreign shipping principals, difficulties arise when Assessing Officers (AOs) seek to finalise statutory assessments or issue tax relief certificates. The association said the Income Tax e-filing system requires a PAN to generate a DIN, creating a procedural hurdle for foreign shipping companies that may operate only occasional or tramp voyages in India.
MANSA said many foreign vessel operators and charterers have no Permanent Establishment (PE) in India and are reluctant to obtain an Indian PAN for a single or occasional voyage.
The association also raised concerns over the use of Indian shipping agents’ PANs as a workaround for system requirements. It said such practice could potentially associate the foreign principal’s freight income with the Indian agent’s tax profile, resulting in complications involving AIS/26AS reporting, tax notices and possible contingent tax liabilities for agents.
MANSA Seeks CBDT Clarification
MANSA has requested CBDT to issue a formal circular clarifying whether an Indian PAN is legally mandatory for non-resident shipping lines for:
Finalisation of assessments under Section 172(4) of the Income Tax Act, 1961;
Corresponding assessment procedures under the new Income Tax Act, 2025; and
Grant of DTAA/DIT relief benefits.
If PAN is not mandatory, MANSA has proposed that the Income Tax Directorate modify the e-filing system to permit DIN generation through alternative identifiers, such as the International Maritime Organization (IMO) vessel number, foreign tax identification number (TIN), or a system-generated unique reference number.
The association has also sought clear instructions preventing the use of a local shipping agent’s PAN for assessments or tax relief certificates belonging to the foreign shipping principal.
Simplified PAN Mechanism Sought if PAN is Mandatory
In the event that CBDT determines that PAN is mandatory, MANSA has requested a clearly defined Standard Operating Procedure (SOP) specifying the circumstances in which PAN must be obtained.
It has further proposed a fast-track PAN allocation mechanism for non-resident shipping companies, with simplified documentation and without requiring physical presence in India, so that tax compliance does not delay vessel operations and port clearances.
MANSA has additionally sought consideration of undertakings or security cheques, depending on the circumstances of individual cases, as alternatives to immediate security deposits where reasonable doubt exists during the assessment process.
The association said it is prepared to submit specific case studies, portal error records and supporting documentation to assist CBDT in examining the issue and developing a uniform mechanism for foreign shipping assessments.
MANSA said a clear and standardised procedure would help eliminate uncertainty for foreign shipping principals and Indian shipping agents while ensuring that statutory tax compliance does not create avoidable delays in India’s port operations.