27thAugust 2008
Hon'ble Shri P Chidambaram
Finance Minister
Government of India
North Block
New Delhi 110 001
Sub: Implementation of Direct Tax laws in the State of Sikkim.
Ref: Difficulties in compliance
Hon’ble Sir,
We beg to refer Hon’ble Finance Minister’s speech in the Lok Sabha on 29th April 2008
“This( Income Tax Act 1961) will apply only prospectively”
Sir, the Income tax department has set up office in Gangtok on 6th of August 2008. We were given to understand that incomes of non Sikkimese individuals commencing from accounting year 2008-2009, would now be assessed by this office.
Subsequently, we came to know from the press that instruction No 8/2008 dt July 29, 2008 issued by CBDT directs that all non-Sikkimese individuals shall be assessed in accordance with the provisions of the Income tax Act 1961, for the accounting year 2007-08 and subsequent years.
However, the Government of Sikkim vide circular No 2/Fin/Adm dt 16th June 2008 intimates “And therefore, consequently, the Sikkim Income Tax Manual of 1948 shall not be acted upon any further in respect of any assessee within the State, with immediate effect.”
As the Sikkim Income Tax Manual 1948 ceased to operate only on 16th June 2008 and also in light of the Hon’ble Finance Minister’s assurance in 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.
In response to the queries of the Finance Ministry, GOI, on the Income tax issue Shri T T Dorjee IAS, Additional Chief Secretary, Government of Sikkim,on 16.4.2007 had rightfully written: “ 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, in course of negotiations to arrive at the referred package, was ignored and the said Instruction No 8/2008 dt 29th July 2008 was issued by CBDT unilaterally.
Sir, your goodself would appreciate that we have been accustomed to our simple 10 page Sikkim Income tax Manual 1948 and quite understandably the people of Sikkim would require at least a few years of study and education to understand and be mentally prepared to operate as per a totally new, complicated and Greek voluminous Indian Income Tax Act 1961.
Even after 46 years since the Indian Income Tax Act was enacted in 1961, people at large in most States of India are finding difficulty in compliance and are often entangled in appeals and litigations a n d expecting the simple individuals of Sikkim to comply with the Act overnight at the switch of a button is definitely not meeting ends of natural justice or befitting our democratic nature.
Under the facts and circumstances stated above, we are to humbly submit:
For smooth and meaningful implementation and also to include the prospective assesses from Sikkim in the National Mainstream, an extensive education and awareness programme comprising of workshops and seminars to cover the prospective assesses be conducted in all nooks and corners of the State over a period of atleast two years, such that we are adequately educated and mentally prepared to contribute to development of the Nation a n d the Act be made applicable prospectively from 1.4.2009 i.e, accounting year 2009-10, uniformly on “ non Sikkimese” individuals and “other persons” as defined in Income tax Act 1961
May we stress here that our Hon’ble Chief Minister Dr Pawan Chamling has been repeatedly and time and again been assuring that the old settlers residing in Sikkim before the merger date i.e.,26th April 1975 have been inadvertently left out and they too would now be given the same benefits under Ladakh Model, in consultation with Government of India. And in this respect may it please be held on record, that these old settlers are in fact “LEFT OUT SIKKIMESE” and their reference as “NON-SIKKIMESE INDIVIDUALS” be please discontinued hereinafter, as they have an inseparable bond and sense of belonging with the soil of Sikkim, with highest regard for its Monarchs who always held them in high esteem.
And as such, the matter of implementation be deferred till the matter is settled.
With warm regards,
Yours faithfully,
President,
Sikkim Chamber of Commerce
Enclosures:
1. Instruction No 8/2008 dt 29.7.2008 issued by CBDT
2 Circular No 2/Fin/Adm dt 16.June 2008 issued by Government of Sikkim
3. Extract of correspondence of Addl Chief Secretary, Government of Sikkim dated 16.4.2007 ( Page No 293 of White Paper on the Direct tax laws in Sikkim Volume III)
4. Circular No 67 dt 23.9.71 issued by CBDT on exemption of Income tax to other residents of Ladhakh vide clause 26A of Section 10 of Income tax Act 1961
5. Copy of Sikkim Reporter dt June 23, 2008.. item ‘ Kranti is reformative…” He assured… Ladhakh Model…”
6. Copy of Sikkim Express newspaper dt 30 July 2008..item ‘CM assured the business community…follow the Ladhak Model to exempt Central Direct taxes for all Old business Communities and employees residing in Sikkim for decades..’
No comments:
Post a Comment