The port users and the exim community in Kochi are finding considerable difficulties on account of the withdrawal of exemption for Kochi Port under section 197 of the Income Tax Act "for no deduction of tax under TDS".
It is pointed out that the Assistant Commissioner of Income Tax, Kochi has recently withdrawn the exemption quoting CBDT (Central Board of Direct Taxes) notification on technical grounds.
"Cumbersome procedure"
Sources in the shipping fraternity pointed out that the port users now had to follow the cumbersome procedures of TDS (Tax Deducted at Source) as specified in the port circular and reconcile their account with the FA and CAO's Department in the beginning of every month.
It is practically difficult to reconcile the individual accounts of port users every month with the deposit accounts maintained by the port for different users based on their activities and to remit the TDS accordingly.
Fiscal crisis
The exemption certificate is beneficial for the port as it is facing severe financial crisis from the current fiscal due to the commencement of the operations of SPM (single point mooring) facility of BPCL Kochi Refineries.
Until the new projects of the port are materialised, there is bound to be severe financial constraints on the port. Hence it is all the more important for the port to get the exemption, sources added.
The TDS exemption obtained by the port for 2008-09 was a welcome relief to port users as they were able to concentrate on their business activities without bothering about cumbersome TDS procedures in their financial remittances to the port. Sources said that the exemption certificate also put the port in an enviable position compared to some other major ports and it was also really helpful in promoting cargo through the port.
Plea for succour
The shipping fraternity has also requested the port administration to take up the matter with the Commissioner of Income Tax or with higher authorities at the Income Tax Department to restore the exemption, as the same would be beneficial for port users and the port.
When contacted, senior port officials said that the port had approached Income Tax authorities for restoration of exemption and they are actively considering the proposal.
