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Thursday, August 28, 2008

GANDHIAN MOVEMENT FOR TAX RELIEF BEGINS

Gandhian movement for tax relief begins

Exemption at par with Sikkim subject holders: Old Business community
Cause extends to prospective implementation of Income Tax Act, 1961


GANGTOK, August 27: Peeved at the ‘discriminatory’ attitude of the Centre on Income Tax exemption issue, the business community of Sikkim launched its ‘Gandhian’ movement from today in the State with two demands- exemption from Direct Income Tax at par with Sikkim subject holders for old business community and implementation of Income Tax Act, 1961 to Sikkim on a future date for the leftouts.

The ball was set rolling by the Sikkim Chamber of Commerce who is spearheading the movement for those not under the exempted lot in Sikkim by placing a memorandum today to the Income Tax office (Sikkim division) addressed to the Union Finance Minister.

The old business community who have settled in Sikkim for generations before April 26, 1975 (the day when Sikkim merged with India) should be given Income Tax exemption at par with Sikkimese subject holders under the Ladakh model, SK Sarda said while submitting the memorandum to the Income Tax office representative.

Mr. Sarda was leading a large contingent of business community of Sikkim who have been left out in the Income Tax exemption by the Centre.

Earlier this year, the Centre had exempted Sikkim subject holders from paying Direct Income Tax by passing an amendment in the Finance Bill of 2008.

People of Sikkimese origin having Sikkim subjects have been exempted from Direct Taxes as per the 26AAA clause paving way for the Act to be enforced in the State.
The era of Direct Taxes began in Sikkim with the Central Income Tax office starting its operations from August 6 earlier this month.

Old business community numbering to 400 families living pre-merger in Sikkim and other people working in the State post-merger represents a huge chunk of those people who do not have Sikkimese subjects and thus have to cough up taxes now as per Income Tax Act 1961.

This has triggered strong resentment among the local business community who do not have the Sikkim Subjects though they have been living in Sikkim for generations. The community have already placed their demands for Income Tax exemption with the Governor and Chief Minister.

“Today is the beginning of our Gandhian movement to seek Income Tax exemption at par with Sikkimese subject holders”, said Mr. Sarda. “Yesterday we submitted our memorandum to the Governor, Chief Minister, Chief Secretary and Finance Secretary seeking their intervention,” he said.

Mr. Sarda asserted that the old business community will continue its movement till they get exemption.

“We have stressed that the Chief Minister has been repeatedly been assuring that the old settlers residing in Sikkim before the merger date have been left out of exemption from Income Tax and that they too would now be given the same benefits under Ladakh model in consultation with the Union Government,” said Mr. Sarda.

The business community further demanded the Income Tax Act 1961 to be implemented on a later date for those people who have settled in Sikkim after the merger date.
“We have drawn the attention of the Union Finance Minster to the difficulties that would be faced in compliance of Direct taxes in Sikkim if made applicable retrospectively from April 1, 2007,” said Suresh Agarwal, the General Secretary of the Chamber.

The Union Finance Minister had stated in his Budget speech that the Act will be implemented only prospectively and no date had been given for the implementation, said Mr. Agarwal.

“Hence the Act should not be implemented at once and proper time period should be given to those settled after merger date to be fully prepared. The Act should be made applicable prospectively from a later date after an extensive awareness campaign is conducted to prepare the people mentally for a smooth and meaningful implementation”, added Mr. Sarda.

According to Mr. Agarwal, the Sikkim Income Tax Manual 1948 ceased to operate only on June 16 this year after which the Central Income Tax Act, 1961 was enforced.
And also in light of the assurances of the Finance minister in the Parliament for prospective implementation, the Central Board of Direct Taxes instructions for assessing the non Sikkimese individuals from the accounting year 2007-08 was ‘not just and had created much anguish and confusion leading to a state of helplessness to cooperate in such unpractical situation’.

Despite the request of the State Government for sufficient time to be given before the Act is implemented, the Centre’s order for assessing the non Sikkimese individuals from the accounting year 2007-08 is not just and has created much anguish and confusion, said Mr. Sarda.

The prospective implementation demand stems from the belief among the business people here that the Income Tax Act 1961 will be difficult to understand.
We are accustomed to the simple ten pages Sikkim Income Tax Manual 1948 and quite understandably the prospective assesses of Sikkim would require at least a few years of study of the new, complicated and voluminous Indian Income Act, Mr. Sarda said.
We are confident that Union Finance Ministry will take our cause with due importance, he said.

LD Lepcha, the Income Tax officer posted in Sikkim received the memorandum on behalf of his department and assured to present the grievances of the business community before his superior officials, Chief Commissioner and the Commissioner. He informed that the Commissioner would be here in the next couple of days and also hold consultations with the state government in this regard.

( Source: Sikkim Express)

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