THE OLD SETTLERS OF SIKKIM

   

Editorial: Sikkim Now
1.March 2012

On 29 February 2008, in a historic development for Sikkim, the then Union Minister for Finance, P. Chidambaram, granted a long-pending demand of the State – Income Tax exemption for all Sikkim Subjects. Included in the General Budget tabled by the Minister on the day was an amendment to Section 10 of the Income Tax Act. This Section deals with “incomes not included in total income”, meaning incomes exempted from Income Tax calculations. A fresh clause – 26AAA - was added detailing that “any income which accrues or arises to a ‘Sikkimese’ individual from any source in the State of Sikkim or by way of dividend or interest on securities, shall not be included in the total income of the individual’. “Sikkimese” for this amendment was defined as “anyone whose name is recorded in the register maintained under Sikkim Subjects Regulation, 1961, read with Sikkim Subject Rules, 1961, immediately before 26 April, 1975; or individuals whose name is included in the Register of Sikkim Subjects by virtue of Government of India Order No. 26030/36/90-I.Ci dated 07 August 1990 and Order of even number dated 08 April, 1991; or any other individual whose name does not appear in the Register of Sikkim Subjects but it is established beyond doubt that the name of such individual’s father or husband or paternal grandfather or brother from the same father has been recorded in the register”. Welcoming the development, in an exclusive conversation with NOW!, Chief Minister Pawan Chamling had said on the day, “Justice has finally been announced for the Sikkimese people who had been inconvenienced by the sudden extension of Direct Tax laws to Sikkim 14 years ago because of the profiteering indulged in by the then powers-that-be. We have succeeded in winning justice for all Sikkimese irrespective of their community, caste or creed. I am also thankful to all Sikkimese for trusting in me to be able to settle the matter in the best of their interests given the situation that had already been created. It is their victory as much as an achievement for my government.”
That was a leap year, as is the current one and today, 29 February 2012, marks the anniversary of that major development. Because a 29th of February comes about only once every four years, and because some things need to be brought back on record, we reproduce below the editorial featured in the 01 March 2008 edition of the paper which had reported on the exemption proposed...

Sikkim Subjects Win
Sikkim has won a major victory. Keeping all incomes earned by Sikkim Subjects, from sources in Sikkim, out of consideration while calculating the total income to asses Income Tax, is, as things stand, a blanket Income Tax exemption for the Sikkimese. Given that the present Government has been consistently demanding such a relaxation and keeping this demand transparent by announcing it at public meets and official get-togethers, it can congratulate itself for having won this relaxation finally. For a State as inconsequential politically [as weighed by strength in Parliament], winning any relaxation from the Centre is a major feat and this one could not have been easy to pull off otherwise it would not have taken so long.
That said, Income Tax is a very complicated issue and has a devastating track-record in Sikkim. For most concerned, even good news is best buried when it comes to Direct Tax Laws. This is unfortunate and perhaps stems from the failure of the government machinery, past and present, to educate Sikkim on what Direct Tax Laws entail. Reactions to it have always been emotional and arguments rarely reasoned. However, that is one worry that should not haunt the present Government. For one, extension of Direct Tax Laws is not of its making, it inherited a legacy of confusion on this count. The more important victory for the Chamling Government is that despite the messy inheritance, it has managed to positively address the emotional quotient that had peaked in 1994. At that time, the anti-Direct Tax movement was fuelled by a perceived dilution of Old Law, which, really, should be of value only to Sikkim Subjects. The rest can respect Old Laws, but an emotional connect with Old Laws is only for the Sikkim Subjects to forge. With the latest development, there should be no claims of hurt among the Sikkimese because the exemption is essentially a doff in the direction of the Old Laws and a reiteration of the unique identity enjoyed by the Sikkimese as Indians because no Central Income Tax is being imposed on them. It is a tacit admission that even though financial matters need to be aligned in symmetry with the rest of the nation, because Sikkim Subjects were promised a Special Status, this latest endeavour will not touch them. Seen in this light, what Mr. Chamling has secured is indeed very substantial. It is a given though that there will be attempts, even energetic attempts, to paint the latest development in a negative light. These are bound to meet with only limited success since the emotional quotient of 1994 will be missing. All Sikkim Subjects, after all, and their earnings in Sikkim, the amendment makes very clear, are exempted from the purview of Central Income Tax.
This is however also time to rue the general refusal to get involved in the “cut-off year” debate that the present government had thrown into the public domain some years back. If the civil society had engaged in these deliberations and eased the political hand to decide on one, many, who might not enjoy the exemption now [but could have, if the cut-off year had been ratified] would have been among the strongest contingents celebrating the latest development. Meanwhile, for all the Sikkim Subjects, congratulations!