Knowledge Marine & Engineering Works Limited (KMEW) has received approval from the Joint Commissioner of Income Tax, Mumbai, under section 115VP (3) of the Income Tax Act to opt for the Tonnage Tax Scheme. This approval, effective for 10 years starting from Assessment Year (A.Y.) 2026-27, is expected to significantly reduce KMEW's tax liability and strengthen its capital expenditure-driven growth. The Tonnage Tax Regime (TTR) is a simplified taxation method for shipping companies, calculating tax based on the net tonnage of vessels rather than profit. The Union Budget 2025 extended this regime to inland vessels to promote India's inland water transportation industry. This move aims to attract investment in the capital-intensive sector by treating inland vessels similarly to seagoing ships, with amendments effective from April 1, 2026. For KMEW, the TTR offers enhanced profitability and cash flow, reduced tax liability compared to standard corporate tax, and a competitive advantage in bidding for contracts. The company plans to reinvest freed-up cash resources into fleet expansion and operational growth. To avail the TTR under Inland Vessel rules, vessels must be registered under the Inland Vessels Act, 2021, with a gross tonnage of at least 100 tons. Additionally, companies must transfer at least 20% of their book profits from tonnage tax activities to a Tonnage Tax Reserve Account for acquiring new vessels within eight years and opt for the scheme for 10 years. The Tonnage Tax is computed based on the gross tonnage of vessels. The slabs are: ₹70/- for each 100 tons up to 1,000 tons; ₹700/- plus ₹53 for each 100 tons exceeding 1,000 tons (up to 10,000 tons); ₹5,470/- plus ₹42 for each 100 tons exceeding 10,000 tons (up to 25,000 tons); and ₹11,770/- plus ₹29 for each 100 tons exceeding 25,000 tons. The tax is charged on deemed income, not actual profits. KMEW's registration under the Tonnage Tax Regime is a pivotal step towards aligning fiscal efficiency with long-term growth. It positions the company to reinvest aggressively in fleet expansion, enhance competitiveness, and capitalize on rising demand in inland and coastal shipping.