Indian ship management companies that invoice foreign shipowners for technical, crew or commercial management should declare those invoices on a monthly EDF, filed within 30 days from the end of the invoice month. The hardest part is not the form but separating your management fee from the owner's money that passes through your hands for crew wages and vessel expenses — agree that split with your CA and AD bank before you fill Part 2B.
Key takeaways
- Management fees billed to foreign owners are service exports and belong on the EDF, one row per invoice.
- Funds remitted by owners to cover crew wages, stores or repairs may not be your export income; how they are documented needs advice and a clear conversation with your bank.
- Owners often pay through ship-owning SPVs or group treasury companies — fill the third-party fields (1.15–1.16) where the payer differs.
- Amounts are usually above ₹10 lakh, so expect full matching with invoice, FIRA and instructions rather than the declaration route.
How ship management income is structured
A typical Indian ship manager earns in some combination of these ways:
- Technical management fee — a fixed monthly fee per vessel for maintenance planning, superintendence, safety and compliance.
- Crew management fee — a fee per vessel or per seafarer for recruitment, training, documentation and payroll administration.
- Commercial or other services — chartering support, insurance handling, newbuilding supervision, often billed separately.
- Pass-through funding — the owner sends money for crew wages, provisions, spares and port costs, which the manager spends on the owner's behalf.
The first three are what you're paid for. The fourth is the owner's money. Mixing them is the commonest source of confusion — in your books, in GST and in the EDF.
What goes on the EDF and what may not
| Receipt | Your income? | On the EDF as a service export? | Who to check with |
|---|---|---|---|
| Monthly technical management fee | Yes | Yes | — |
| Crew management fee | Yes | Yes | — |
| Newbuilding supervision fee | Yes | Yes | CA on place of supply if work is at a foreign yard |
| Crew wage funding | Generally no — spent for the owner | Treatment varies; take advice | CA and AD bank |
| Vessel running cost funding | Generally no | Treatment varies; take advice | CA and AD bank |
| Mark-up on purchases for the owner | Possibly | Depends on contract | CA |
Our general article on reimbursements from foreign clients explains the principles. For ship managers the sums are larger, so it's worth a written note from your CA on how your agreements should be treated.
Whatever you decide, tell your bank. When large owner remittances land, a bank that knows which are fees and which are funding can tag them correctly.
Filling the EDF
| Field | Typical ship manager entry |
|---|---|
| 1.1 Type of export | Services |
| 1.4 Mode of delivery | Depends on how the service is delivered; office-based management delivered remotely may be Internet, other cases Others — confirm with your bank |
| 1.5 Category of exporter | Others, unless an SEZ or EOU unit |
| 1.12 Mode of realisation | Others for direct transfers |
| 1.13 Consignee/recipient | The owner or owning company that contracted you |
| 1.15–1.16 Third party | The SPV, group company or treasury entity that pays, with the relationship |
| 1.17 Country | The recipient's country |
| Part 2B description | "Technical management fee — MV Example Star — November 2026" |
| Part 2B contract no. & date | Your ship management agreement reference |
Third-party payers
Shipping groups often hold each vessel in a separate company and pay through a central account in another jurisdiction. If the company paying you isn't the one you contracted with, fill fields 1.15 and 1.16 and keep the documents that show the link — the management agreement, a payment instruction or a group structure note. Our explainer on third-party payments in the EDF covers what banks usually look for.
Codes
Shipping and ship management services have their own SAC headings and RBI purpose codes, separate from the IT and consultancy codes common in other industries. Confirm the SAC with your CA and ask your bank which purpose code it applies to management fee receipts. Our purpose code finder helps you prepare for that conversation.
Worked example: a Mumbai manager with a 9-vessel fleet
Konkan Marine Management Pvt Ltd manages nine bulk carriers for two owners: a Greek family group (six vessels, paid through a Cyprus treasury company) and a Singapore owner (three vessels). In November 2026 it raises:
| Invoice | Contracting owner | Payer | Basis | Amount | Approx. INR |
|---|---|---|---|---|---|
| KMM/26-27/0611 | Greek group, 6 vessels | Cyprus treasury co. | Technical management | USD 81,000 | ₹68 lakh |
| KMM/26-27/0612 | Greek group, 6 vessels | Cyprus treasury co. | Crew management | USD 27,000 | ₹22.7 lakh |
| KMM/26-27/0613 | Singapore owner, 3 vessels | Same owner | Technical and crew management | USD 52,500 | ₹44.1 lakh |
These three fee invoices go on one November EDF, due 30 December 2026. The first two rows show the Cyprus company in the third-party fields. Crew wage funding of several lakh dollars received the same month is handled as agreed with the CA and bank, not added to these rows.
All three invoices are well above ₹10 lakh, so when each is paid, Konkan sends its bank the invoice, the FIRA and matching instructions. A cover note listing the month's invoices helps; our EDF cover letter is a quick start.
Realisation and owner disputes
Each fee invoice must be realised within 9 months from its date. Owners usually pay management fees promptly, but disputes do happen — over off-hire, vessel sales or contract terminations. If a fee is reduced by agreement, issue a credit note and tell your bank. If payment is delayed for a genuine reason, ask your AD bank for an extension before the 9 months run out.
GST and the EDF's limits
Whether ship management fees qualify as a zero-rated export under GST depends on the Section 2(6) IGST Act conditions, including place of supply. Services connected to vessels and goods can raise place-of-supply questions, so take specific advice. If they qualify, most managers export under LUT. The EDF itself doesn't change any GST or income-tax obligation.
This is general information, not legal or tax advice. Ship management contracts vary widely and the treatment of pass-through funds depends on their terms.
Frequently asked questions
Do ship managers need to file the EDF for each vessel separately?
No. One EDF per month can cover all your service exports to one or more recipients. You can raise one invoice per vessel or one per owner; either way, each invoice becomes one row on the month's form.
Should crew wage funding go on the EDF?
Funds an owner sends for you to pay crew on its behalf are generally not your fee income, and their treatment depends on your agreement. Take advice from your CA and agree the approach with your AD bank before declaring anything.
What if the payer is a different company from the owner?
Fill fields 1.15 (third party) and 1.16 (relationship) and keep documents linking the payer to the contracting owner. Banks generally want to understand why a third party is paying.
Can we use the ₹10 lakh declaration for management fees?
Only for invoices of ₹10 lakh or less. Most ship management invoices are larger, so the bank will need the invoice, payment evidence and matching instructions to close each EDPMS entry.
Our unit is in an SEZ. Does anything change?
Yes. SEZ units file the EDF with the SEZ Development Commissioner rather than the AD bank. The rest of the approach — separating fees from funding, third-party fields, realisation — still applies.
Bottom line
Declare your management fees, keep owner funding separate on advice, and fill the third-party fields when an SPV or treasury company pays. Build each month's form in the free EDF form generator.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.