What is Operating ships? What is Qualifying company? Section 115VB and 115VC of Income Tax Act 1961

Operating ships and Qualifying company are defined under sections 115VB and 115VC of Income Tax Act 1961. Provisions under these Sections are :

Section 115VB of Income Tax Act "Operating ships"

Section 115VB. For the purposes of this Chapter, a company shall be regarded as operating a ship if it operates any ship whether owned or chartered by it and includes a case where even a part of the ship has been chartered in by it in an arrangement such as slot charter, space charter or joint charter :

Provided that a company shall not be regarded as the operator of a ship which has been chartered out by it on bareboat charter-cum-demise terms or on bareboat charter terms for a period exceeding three years.

 

Section 115VC of Income Tax Act "Qualifying company"
Section 115VC. For the purposes of this Chapter, a company is a qualifying company if-

(a) it is an Indian company;

(b) the place of effective management of the company is in India;

(c) it owns at least one qualifying ship; and

(d) the main object of the company is to carry on the business of operating ships.

Explanation.-For the purposes of this section, "place of effective management of the company" means-

(A) the place where the board of directors of the company or its executive directors, as the case may be, make their decisions; or

(B) in a case where the board of directors routinely approve the commercial and strategic decisions made by the executive directors or officers of the company, the place where such executive directors or officers of the company perform their functions.

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