Form 66, Download Income Tax Form 66 in PDF Format

FORM NO. 66 for Audit Report under Clause (Ii) Of Section 115VW of the Income-Tax Act, 1961. This form is relevant only to companies which are engaged in the business of operating qualifying ships and have opted for computation of income from such business under the tonnage tax scheme contained in chapter XII G of the act, which had come into force from 1-4-2005.

An option for tonnage tax scheme by a tonnage tax company shall not have effect in relation to a previous year unless such company—

 (i)  Maintains separate books of account in respect of the business of operating qualifying ships; and

(ii)  Furnishes, along with the return of income for that previous year, the report of an accountant, in the prescribed form duly signed and verified by such accountant.

Explanation.—for the purposes of this section, “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288.

 

FORM NO. 66

[See rule 11T]

Audit Report under clause (ii) of section 115VW of the Income-tax Act, 1961

 

1.

Name of the Company

:
2.

PAN

:
3.

Assessment year

:
4.

Option for tonnage tax effective from assessment year

:
5.

Remarks, if any

:
6.

(a) Whether separate books of account are maintained in respect of the business of operating qualifying ships

Yes

No

(b) If yes, list of books of account maintained (in case books of account are maintained in a computer system, mention the books of account generated by such computer system).

(c) List of books of account examined.

7.

Limit for charter-in :

Whether correctly computed keeping in view the limit of 49% under section 115VV.

8.

Relevant shipping income :

(i) Profits from core activities referred to in sub-section (2) of section 115V-I, and

(ii) Whether profits from incidental activities exceed 0.25 per cent of the turnover from core activities.

9.

Tonnage tax reserve account :

(i) Certify the book profit

(ii) Minimum reserve created

(iii) Reserve utilized in the manner laid down under sub-section (3) of section 115VT

10.

Computation of tonnage income under section 115VG

 

*Name of the qualifying ship

Net tonnage / deemed tonnage

Owned / chartered

Kind of charter**

Daily tonnage income

No. of days operated

Tonnage income (56)

1

2

3

4

5

6

7

 

11.

Details of transactions by the company with related parties

12.

Depreciation :

I. Computation of depreciation in accordance with the provisions of section 115VK of the Income-tax Act, 1961 in the case of qualifying assets and other assets, as the case may be, in the following form [to be given only in case of the first year in tonnage tax scheme]:

II. Particulars of depreciation allowable as per the Income-tax Act, 1961 in respect of each qualifying asset or block of qualifying assets, as the case may be, in the following form :—

(a)    Description of asset/block of assets.

(b)    Rate of depreciation.

(c)    Actual cost or written down value, as the case may be.

(d)    Additions/deductions during the year with dates, in the case of any addition of an asset, date on which put to use including adjustments on account of—

(i)    Modified Value Added Tax credit claimed and allowed under the Central Excise Rules, 1944 or Central Excise Rules, 2002, as the case may be, in respect of assets acquired on or after 1st March, 1994,

(ii)    change in rate of exchange of currency, and

(iii)     Subsidy or grant of reimbursement, by whatever name called.

(e)    Depreciation allowable.

(f)    Written down value at the end of the year.

13.

Details of assets (other than ships), if any, not used exclusively for the tonnage tax business :

14.

Details of losses relating to the business of operating qualifying ships, if any :

There is no need to mention the name of the ship, income from which is computed on deemed tonnage basis.

Certificate of charter-in/out on Time Charter, Voyage Charter, Bare Boat Charter and Bare Boat Charter cum demise basis.

Declaration

I/We report that the statutory audit of
(mention name, address and permanent account number of the company) was conducted by *me/us/M/s

I/We have obtained the information and explanations which to the best of *my/our knowledge and belief were necessary for the purposes of ascertaining the profits of the said assessee derived from the business of operating qualifying ships.

In my/our opinion and to the best of *my/our information and according to the explanations given to me/us the particulars given in the report are true and correct.

Date
Place

Signed

Accountant

SUMMARY

1 NT: 19 cbm when loadable capacity is taken on volume basis.

1 NT: 14 t when loadable capacity is taken on weight basis.

1 NT: 2.5 TEUs when loadable capacity is taken on TEU basis.

Deemed tonnage would thus be calculated as under:

19 cbm is equivalent to 1 NT

14 metric tonnes is equivalent to 1 NT

2.5 TEUs is equivalent to 1 NT

Worksheet for TEU: NT formula

A.Indfex Service (Far East to India)
Name of Vessel R. GandhiNT9749
Capacity @ 14 MT Homogenus1534
TEUs
Operating days360
Round voyage days35
Theoretical volumes carried
Container carriage3068
Voyages completed10.29
Yearly traffic31557
Equivalent of one NT in TEUs0.30894
B.ISE Service (UK Continent to India)
Name of Vessel R. Gandhi NT9749
Capacity @ 14 MT Homogenous 1534
TEUs
Operating days360
Round voyage days 49
Theoretical volumes carried
Container carriage 3068
Voyages completed 7.35
Yearly traffic 22540
Equivalent of one NT in TEUs 0.43251
C.Indamex Service (USA to India)
Name of Vessel R. Gandhi NT 9749
Capacity @ 14 MT Homogenus 1534
TEUs
Operating days360
Round voyage days56
Theoretical volumes carried
Container carriage3068
Voyages completed 6.43
Yearly traffic 19723
Equivalent of one NT in TEUs0.49429

 

Average of INT in TEUs = A+B+C/3 1.23574/3 = 0.41192

0.41 NT = 1 slot

1.025 NT

2.5 slot

Therefore, 1 NT = 2.5 TEU

4. Formula for conversion of Cargo carried (by volume and weight) into NT (Space Charter)

(a)    The quantum of cargo that can be carried by a break-bulk vessel is restricted by two factors – (i) volume of the cargo or (ii) weight of the cargo.

(b)    Since the entire vessel is not chartered and only a small space is booked in the vessel, conversion of chartered space into net tonnage (NT) is not available. Hence, a conversion formula of cargo carried on a ship to its net tonnage has been worked out.

(c)    The formula has been worked out based on a break-bulk vessel, ‘MV State of Nagaland’ owned by the Shipping Corporation of India Limited. Physical parameters of the vessel are:

(i)    NT of the vessel: 8294

(ii)    GT of the vessel: 14166

(iii)     Cubic Capacity: 26186 Bale

(iv)    Dead wt.: 20574 M/T

(v)    Bunkers + water: 900 M/T

(vi)    Ballast + constant: 1000 M/T

(vii) Loadable Dead wt.

(iv) – (v) – (vi): 18675 M/T

(d)    A vessel can either load on—

    Maximum bale capacity (i.e., maximum capacity restricted by volume of cargo); or

    Maximum dead weight capacity (i.e., maximum capacity restricted by weight of cargo).

(e)    The vessel ‘State of Nagaland’ is a typical break-bulk vessel which operates in the India – UK Continent sector and can complete 3 voyages in a year. The complete circuit of India – UK Continent – India is considered as one voyage (i.e., cargo would be carried from India and discharged in UK Continent and on the return leg, cargo would be loaded at UK-Continent and discharged at India).

(f)    The vessel can thus carry one way cargo of maximum bale capacity of 26186 cubic meters (cbm), i.e., maximum volume permissible or cargo of maximum 18675 metric tons, i.e., maximum weight permissible. Thus conversion of cargo carried to net tons (NT) can be worked out depending on whether the carrying capacity is limited by volume or weight. The workings have been done on the basis of what a normal break-bulk vessel can carry during a period of one year.

A.    Cargo restricted by volume – In each leg i.e., from India – UK Continent and from UK-Continent to India, the vessel can carry maximum bale capacity of 26186 cbm. Thus in one voyage, the vessel can carry 2X26186 cbm. Therefore, in 3 voyages, the vessel would carry 2 X 26186 X 3 cbm bale capacity.

(i)    Loadable bale capacity 26186 X 2 per voyage: 52372 cbm

(ii)    Net tonnage of ship (NT): 8294

(iii)    Max No. of voyages/year: 3

(iv)    Loadable capacity 26186 cbm X 2 X 3: 157116 cbm

NT: cbm based on volume of cargo (iv)/ (ii)

= (157116 cbm/8294 NT)

1 NT = 18.94 cbm

say 19 cbm

B.    Cargo restricted by weight – In each leg i.e., from India – UK Continent and from UK-Continent to India, the vessel can carry maximum cargo weight of 18675 metric tons. Thus in one voyage, the vessel can carry 2 X 18675 metric tons. Therefore, in 3 voyages, the vessel would carry 2 X 18675 X 3 metric tons (mt).

(i)    Loadable weight 18675 mt. X 2 per voyage: 37350 mt.

(ii)    Net tonnage of ship (NT): 8294

(iii)    Max No. of voyages/year: 3

(iv)    Loadable capacity 18675 mt. X 2 X 3: 112050 mt.

NT: weight based on loadable weight of (IV)/ (ii)

= (112050 mt. /8294 NT)

Or

1 NT = 13.50

say 14 mt.

The loadable capacity in volume and weight has been taken on per year basis.

5.    Incidental activities for the purpose of relevant shipping income

(a)    Maritime Consultancy Charges – Maritime consultancy charges received by a shipping company in the course of business of operating ships in lieu of knowledge offered by it to other companies which do not possess such expertise and which may among other things include rendering advice on setting up of shipping business, ship designing and repair and business acquisition, etc.

(b)    Income Earned from Loading/Unloading of Cargoes – Charges received for services in connection with loading and unloading of cargo to and from the ship (such charges being separate from the transit charges).

(c)    Ship Management fees/remuneration for managed vessels – Fees or remuneration earned for providing services of operation and maintenance of vessels on behalf of other ship owners/agencies.

(d)    Maritime Education/Recruitment fees – Training fees charged/earned by a shipping company by extending its surplus training facility to other personnel in the shipping industry and fees earned from foreign ship owners for rendering services by way of screening, interviewing, short-listing and recruitment of floating staff and officers.

6. Calculation of average of net tonnage for computing the limit for charter-in (illustrative example):

Ship No.

Ownership/type of operation

Net Tonnage

No. of days

Ton-days

Operation Charter-in

1.Qualified ship chartered-in on BBCD basis

11000

365

4015000

2.Owned qualified ship

15000

365

5475000

3.Owned qualified ship but chartered out on BBC basis to another company for more than 3 years

20000

365

0

4.Qualified ship chartered-in for 5 years on BBC basis

12000

365

4380000

4380000

5.Qualified owned ship – time chartered – out

10000

365

3650000

6.Qualified ship – voyage chartered-in

15000

60

900000

900000

7.Qualified ship – time chartered-in

20000

120

2400000

2400000

8.Qualified ship – time chartered in

15000

365

5475000

5475000

9.Qualified ship-chartered-in (slot charter)

5000

365

1825000

1825000

10.Qualified ship-chartered-in (space charter)

6000

365

2190000

2190000

Total

30310000

17170000

Percentage of tonnage chartered-in: (17170000/30310000) X 100 = 56.65%. Since the percentage of net tonnage chartered in is more than 49%, as per section 115VV, the company’s option for tonnage tax scheme will cease to have effect.’

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