IFSC Authority amends rules allowing shippers to offer voyage charter

AHMEDABAD - In yet another boost for ship-leasing businessfromtheInternationalFinancialServicesCentre (IFSC) at GIFT City in Gandhinagar, the regulator IFSC Authority (IFSCA) on Wednesday ironed out ambiguities relating to employment of ships / vessels for voyage charter and other commercial transactions by companies atGIFT-IFSC.

This, according to shipping industry stakeholders, completes the bouquet of offerings under the ship leasing andowningbusinessatIFSC.

Recently, IFSCA issued an amendment to its earlier circular titled ‘Framework for Ship Leasing’, and allowed the lessor to undertake activities such as “operating lease, voyagecharters,contractofaffreightment,employmentin shippingpoolsandallotherlegalcommercialtransactions foremploymentofships.”

The amended circular also allows “Asset Management Support Services for assets owned or leased out by the lessor or by any of its Group Entities set up in IFSCs inIndia.”

Further, the sale and lease back, purchase, novation, transfer, assignment, and such other similar transactions in relation to ship lease are, henceforth, granted, besides any other related activity withthepriorapprovaloftheIFSCA.

The regulator also clarified that a transaction shall be classified as a lease if it is in accordance with the Indian Accounting Standards (Ind AS 116) on leases.

Shippingbusiness

Notably, the industry had represented to the IFSCA to notify voyage charter and other commercial transactions for employment of ships, as permissible activities under operating lease, thereby, enabling the full ecosystemforshippingbusinessattheIFSC.

In its amended circular, the IFSCA noted, “The matter was referred to the Directorate-General of Shipping, India, which clarified that these activities are an integral part of the ecosystem and may be included as part of the shippingecosystemintheIFSC,asatpresentmanyIndian playersaregoingoff-shoreforavailingoftheseservices.”

A shipping player remarked, “this was a serious issue impacting the operational aspect of leasing from IFSC.”