What is Operating ships? What is Qualifying company? Section 115VB and
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
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
(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
(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.