Supreme Court Holds Cruise Operations Qualify as "Carriage" Under Section 44B, Entitled to 7.5% Presumptive Tax Rate

Case Snapshot

Case Name: Director of Income Tax v. M/s Star Cruises (India) P. Ltd. & Ors.

Citation: 2026 INSC 771

Bench: Justice S.V.N. Bhatti and Justice N.V. Anjaria

Date of Judgment: July 30, 2026

Area of Law: Income Tax, International Taxation, Presumptive Taxation

The Judgment in One Line

Cruise operations, including round trips with onboard hospitality, constitute "carriage of passengers" under Section 44B of the Income Tax Act, attracting the presumptive tax rate of 7.5%.

Why This Judgment Matters

This judgment clarifies the scope of Section 44B of the Income Tax Act, which provides presumptive taxation for non-resident shipping enterprises. The Supreme Court rejected the Revenue's narrow interpretation that "carriage" only covers point-to-point transportation. It held that cruise operations involving round trips, shore excursions, and onboard entertainment still qualify as carriage of passengers. The ancillary services provided during the cruise do not change the dominant character of the business. This decision provides certainty to foreign shipping and cruise operators and affirms that the presumptive tax regime is designed to simplify tax computation for such enterprises.

Background

Superstar Libra Ltd. (SLL), a non-resident entity, operated a cruise ship nam

... Upgrade to a Premium Plan to view the full judgment.