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Passenger carriage in round-trip cruises qualifies for presumptive taxation despite onboard hospitality and return to the originating port.
Section 44B applies to a non-resident operating ships for carriage of passengers and permits presumptive income computation from amounts paid or payable for that carriage. Passenger carriage need not involve travel between two distinct ports: a round-trip voyage returning to its origin remains carriage, particularly where passengers may disembark at intermediate ports. Hospitality and entertainment provided on board are ancillary to cruise operations and do not alter the activity's essential character. A non-resident cruise operator conducting such voyages falls within the presumptive-income regime under Section 44B.
Presumptive taxation u/s 44B of foreign shipping enterprises - Carriage of passengers by cruise ship - interpretation of the word ‘carriage’ Applicability of the presumptive scheme for foreign shipping enterprises to income from cruise services involving a round voyage and on-board hospitality and entertainment - HELD THAT: - The Court held that the expression "carriage" could not be restrictively confined to transportation from one port to another. It is difficult to confine the meaning of the word ‘carriage’ as attributed by the AO. The Appellate Authority and the Tribunal, being competent authorities to examine the facts in issue, as noted supra, have held that the activity established by SLL does not fall outside the expression of ‘carriage’ as per Section 44B. On a voyage, the providing of ancillary services does not take away from the meaning of ‘carriage’ as per Section 44B of the Act. The factual findings that passengers could disembark at intermediate ports and that the cruise operator's principal receipts were cabin and transport fares established that the cruise activity remained carriage of passengers. Ancillary hospitality and entertainment services provided during the voyage did not take the activity outside the scope of Section 44B. [Paras 14, 15, 16] Section 44B was applicable to the non-resident cruise operator's estimated income, and its assessment at the statutory presumptive rate was sustained. Final Conclusion: The Civil Appeals were dismissed. The concurrent determination that the cruise operator was engaged in carriage of passengers and was entitled to computation of income under Section 44B was affirmed.
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