PHASE II OF INCOME TAX PROTEST LAUNCHED IN SIKKIM

SIKKIM CHAMBER OF COMMERCE
M.G.MARG, GANGTOK,SIKKIM

Dated:22nd SEPT.08

PRESS RELEASE



ANNOUNCING PHASE II OF PROTEST ON INCOME TAX ISSUE


Under the aegis of Sikkim Chamber of Commerce a packed gathering of about 300 delegates of business enterprises and old settlers assembled at Gangtok on 22 Sept 2008 and approved going in for Phase II of the Protest on Central Income Tax Issue.

It is important to recall here that on 27th August 2008, more than 800 delegates of business enterprises, small and big and old settlers from all over Sikkim had assembled at the Newly Opened Income Tax Office at Gangtok and submitted a copy of memorandum addressed to Hon’ble Finance Minister Shri P Chidambaram seeking implementation of Income Tax Act from a future date and consideration of exemption from income tax for old settlers residing in Sikkim prior to date of merger i.e., 26th April 1975 .

The meeting noted with deep concern that even after passage of a reasonable time period from date of submission to the Ministry of Finance, nothing conclusive has emerged from Government of India and delay on this account would simply add difficulties both for the prospective tax payers and the administrator.

SCC in its memorandum had drawn attention of the Hon’ble Finance Minister to the difficulties that would be faced in compliance of Direct taxes in the State of Sikkim, if made applicable retrospectively from 1.4.2007.

The Chamber drew the attention of the Hon’ble Finance Minister to his speech made in Lok Sabha on 29th April 2008 wherein he had promised that:

“This( Income Tax Act 1961) will apply only prospectively”

The Sikkim Income Tax Manual 1948 ceased to operate only on 16th June 2008 and also in light of assurance of the Finance Minister in the Parliament for prospective implementation, the order for assessing the non- Sikkimese individuals from the accounting year 2007-08 is not just and has created much anguish and confusion leading to a state of helplessness to co-operate in such unpractical situation

Quoting the White Paper on Implementation of Direct Taxes in Sikkim, the SCC had submitted that in the course of discussions with Government of India on the implementation of direct tax laws in Sikkim, the State Government had rightfully requested as under:

“ The State Government would however like to reiterate its request that sufficient time should be given, before the direct tax laws are implemented, to create an awareness in the State on implementation of the direct tax laws and to educate and mentally prepare the people of the State of the new system of taxation and at the same time allow the State Government to sort out the transitional issues.”

It is regretful that quite inadvertently such an important issue raised and request made thereupon by Government of Sikkim, in larger public interest, was ignored and Instruction No 8/2008 dt 29th July 2008 was issued by CBDT unilaterally.

The general body drawn from all over Sikkim, therefore, resolved to continue with the Gandhian way of movement and unanimously agreed to launch the Second Phase of Protest on 24th and 25th September 2008 by wearing black band on arms and displaying Protest Posters in their premises, demanding from Government of India:

1. Exemption from Income Tax- also for old settlers, government officers and old businessmen of Sikkim.

2. Implementation of direct tax laws on other categories from accounting year 2009-2010.

In the reminder addressed to the Finance Minister the Chamber has held that review of the matter is of utmost importance in view of need to include prospective taxpayers of Sikkim in the National mainstream and this task can only be accomplished by a progressive, systematic and logical approach that may be acceptable to the first timer prospective assesses.

The Chamber has sought to further remind the Hon’ble Finance Minister that the issue of exemption from Indian Income Tax to 400 families of old settlers residing in Sikkim before the merger date i.e., 26th April 1975 who have been inadvertently left out is pending settlement and is under active consideration of both the Union and the State Governments.

The general body also decided to submit memorandums to His Excellency the Governor of Sikkim as well as to Hon’ble Chief Minister and all concerned in Union Government urging them to redress the issue to its logical conclusion.

The meeting thanked Hon’ble Chief Minister Dr Pawan Chamling and Government of Sikkim for their positive approach in the matter which shall go a long way to solve the issue.

( Suresh Agarwal)
General Secretary
Sikkim Chamber of Commerce