For a seafarer who is genuinely an employee, salary for services performed in the course of or in relation to that employment is outside GST in India. The rule is not a blanket exemption for everyone working at sea: if the arrangement is independent contracting, GST treatment must be assessed separately. Working overseas does not by itself turn wages into an export of services, and provident-fund coverage is a separate question from GST.
Is GST applicable to a seafarer’s salary?
Generally, no, if the seafarer is an employee receiving remuneration for services in the course of or in relation to employment. Schedule III of the Central Goods and Services Tax Act states that “Services by an employee to the employer in the course of or in relation to his employment” are neither a supply of goods nor a supply of services. Because GST applies to supplies, employee salary is outside GST under this rule. CGST Act, Schedule III.
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The Central Board of Indirect Taxes and Customs (CBIC) puts the practical answer plainly in its GST FAQ: “Salary will not be leviable of GST.” That is a general employment rule, not a special ruling on every seafarer’s contract. CBIC GST FAQ. A Ministry of Finance clarification also explains the treatment of employee services and contractual perquisites. Ministry of Finance clarification.
First determine whether the seafarer is an employee
The deciding issue is the substance of the working relationship, not whether a contract or payslip uses words such as “salary,” “consultant” or “contractor.” Review the agreement and actual arrangement before applying the employee rule.
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- Does the agreement establish employment, or does the seafarer independently provide services?
- How is remuneration determined, and what do the contract and amendments say about the relationship?
- Is a recruiting or placement intermediary involved, and what role does it play?
If the seafarer is an independent contractor, the Schedule III exclusion for employee services may not cover the payment. The applicable supply classification, place-of-supply rules, registration requirements and any export treatment then need separate review. The available government material does not establish one universal GST result for all seafarer contractor arrangements. CGST Act; CBIC GST FAQ.
Does working overseas make seafarer wages an export?
No—not where the payment is salary for employment. The employee rule comes first: services in the course of or in relation to employment are not a supply under Schedule III. A vessel’s location, the seafarer’s work location or the fact that the employer is abroad does not, by itself, convert employee wages into an export of services.
CBIC explains that exports are zero-rated and that registration is required to claim refunds under the export framework. Those general rules do not change the prior classification of employee services. If the relationship is instead independent contracting, export status and place of supply depend on the relevant parties, their locations and the contract; do not assume that overseas work alone satisfies the requirements. CBIC GST FAQ.
The IGST Act’s place-of-supply provisions distinguish transactions by supplier location and place of supply, including rules for services where supplier and recipient are in India. These rules can matter for a taxable service supplied by a contractor, but they do not override Schedule III’s employee exclusion. IGST Act.
Provident fund is a separate question
The Seamen’s Provident Fund is a statutory social-security scheme, separate from GST on wages. The Directorate General of Maritime Administration lists the Seamen’s Provident Fund Act, 1966 and the Seamen’s Provident Fund Scheme, 1966. DGMA acts and rules. The Seamen’s Provident Fund Organisation describes a contributory arrangement involving employer and matching contributions and trustee administration. Seamen’s Provident Fund Organisation. The Directorate General of Shipping describes SPFO’s role in collecting seafarer contributions from shipping companies and managing and distributing benefits under applicable rules. Directorate General of Shipping: Seafarers.
Those descriptions do not establish that every person working on an overseas vessel is covered, or that one contribution rate applies universally. Check the current scheme provisions and the seafarer’s employer, employment and worker category before drawing a conclusion about eligibility or deductions. Maritime material also points to the relevance of employer identity, vessel flag and recruiting or placement arrangements; discussion of proposals or concerns in meeting minutes should not be treated as a binding, universal coverage rule. Directorate General of Shipping: Seafarers; Directorate General of Shipping material.
What to check before deciding your position
- Collect the documents: obtain the seafarer employment agreement and any amendments.
- Identify the parties: establish the legal identity and location of the employer, shipowner, payroll payer and any recruiting or placement intermediary.
- Classify the relationship: determine whether the agreement and actual working arrangement create employment or independent service provision.
- Record the maritime details: note the vessel’s flag and relevant engagement details.
- Check fund coverage separately: identify the fund involved and review the current scheme provisions governing coverage and contributions.
- Separate the questions: GST, income tax, withholding and provident-fund eligibility are distinct issues; an answer to one does not settle the others.
For a particular contractor arrangement or a disputed provident-fund deduction, have the contract and current scheme terms reviewed by a qualified Indian tax or maritime-employment professional.
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