Meeting between central IT officials and business community ends in deadlock

AMEET OBEROI
GANGTOK, 22 Nov: The Commissioner of Income Tax, Siliguri, Subroto Sarkar, and the Joint Commissioner, PD Karwa, met with members of the business community of Sikkim to discuss issues and problems relating to the non-compliance of the community in filing their tax returns. The meeting, held today at Hotel Tashi Delek, ended in a deadlock. This, primarily because the sides are divergent agendas – the IT officials were here to convince the old settlers to file their Income Tax returns while the community keen on convincing the officials and the IT Office to include them in the exempted list at par with the Sikkim Subjects.
Addressing the huge gathering, the Commissioner stated that after having joined the office just about a month ago he has come to Gangtok to discuss the problems being faced, solve them and to advice the business community that as per law, they had to file their taxes if they were earning taxable incomes.
“The issue of Income Tax is at a very nascent state in Sikkim and there are certain problems, but as per the law [Clause 26AAA of the Finance Act, 2008], people [mostly members of the old business community] not having Sikkim Subject Certificates or Certificates of Identification in the state have to pay central taxes”, he said.
“The 400 families not of Sikkimese origin staying in Sikkim, according to the law, must file their returns as the white paper has already been signed between the state government and the central government regarding the issue and all who are not of Sikkimese origin have been asked to file their returns from the year 2007-08, but this is not being done,” he added.
On the demand that the old settlers be exempted at par with Sikkim Subjects, he said, “We are not the law making authority, but just the law implementing agency. The demand is beyond our purview to clear”. He went to urge the business community to first start paying their taxes, adding that only then could things start moving forward in the right direction.
The Sikkim Chamber of Commerce, in turn, submitted a memorandum to the Commissioner highlighting that they have urged and requested that the 400 families who have been left out from the purview of Income Tax exemption and all matters pertaining to Central Income Tax for pre merger business communities [person residing in Sikkim prior to 26 April, 1975] be exempted from the need to file IT returns until the matter and demands of the affected citizens to various forums is resolved.
The meeting with central Income Tax officials and the business community was to push their case seeking Income Tax exemption at par with other Sikkimese who were granted exemption by the centre in the year 2008. Ever since the Sikkim Subject and Certificate of Identification holders in the state were granted exemption from paying direct income Tax, the Old Settlers [mostly members of the old business community] have been petitioning both the state and central governments to be equated with the Subject/ CoI holders in Sikkim and given the same benefit.
Their main ground is that their petitions for IT exemptions are in process of being considered by the central government. The old settlers have been pushing to be granted exemption to end discrimination and their primary demand is that those having settled in Sikkim before 1975 be given exemption. As for those having settled here post 1975, they have been demanding that the process of filing IT returns, being new to Sikkim, be explained to them for which some kind of workshop or seminar be organized by the IT office.
SK Sarda [president, Old Settlers Association of Sikkim] also handed over a petition to the Commissioner, wherein the problems being faced by the old settlers in the state were highlighted. He further urged that the problems faced be conveyed to higher authorities of the Central Board Direct Taxes [CBDT] and be resolved.
Mr. Sarda, in his address, highlighted that the SCC had, on several past occasions, “impressed upon the   Central Board of Direct Taxes on the need of such a meet”.
He went on to explain that, “There appears to have been some inadvertent omissions while defining the word ‘Sikkimese’ in reference to Clause 26AAA which does not cover all those who were entitled to income tax exemption. The old settlers have been permanently residing in Sikkim since last 100 to 130 years and unfortunately left out by non application of principles of equality and further without having been heard on merit. The discrepancy by non inclusion is being repeatedly brought to the notice of Sikkim Government and Union Government.”
Similarly, Prem Goyal [president, Sikkim Nagrik Sanghars Samiti] also placed a petition with the Commissioner. Speaking on his petition, he stated that the law passed in 1989 did not discriminate between the business community and other residents of Sikkim, but the rule passed in 2008 discriminates between the ‘non Sikkimese’ business community and Sikkimese and this has turned them into second class citizens here.
“There is a lot going on regarding the issue so until the issue is resolved the filing of Income Tax in Sikkim should be kept on hold by the IT department because forcefully implementing the law in the state could lead to tension,” he stated.
Meanwhile, the business community has resolved not to pay their returns until the issue is solved.