Vessel Engaged Under SEAIOCM Agreement Qualifies As 'Foreign

The Kerala High Court has clarified that a vessel engaged under a "Specialised-Vessel Services for Exploration and Production Operations under Indian Contractual and Tax Framework" (SEAIOCM) agreement qualifies as a "foreign-going vessel." Consequently, it is eligible for exemption on the consumption of imported stores (like fuel and provisions) under Section 87 of the Customs Act, 1962. The customs department had denied the exemption, arguing that the vessel, operating in Indian waters, did not meet the definition of a foreign-going vessel. However, the High Court interpreted the regulations broadly, considering the nature of the vessel's engagement in foreign-contracted operations. This ruling provides significant relief to companies involved in offshore oil and gas exploration, as it exempts them from paying customs duty on essential supplies consumed onboard, thereby reducing their operational costs and aligning the tax treatment with the international nature of their work.