News & Announcement
Commercial Taxes Division host Stakeholders Meeting
Gangtok, September 24 (IPR):
The Commercial Taxes Division of the Finance Department convened a stakeholder meeting with hoteliers of Sikkim at Chintan Bhawan today.
The programme was graced by Mr GT Dhungel, Minister, Culture and Health and Family Welfare Departments, who is also the Member of GST Council, as the chief guest.
The meeting also had the presence of Mr Tshering Thendup Bhutia, Minister, Tourism and Civil Aviation and Commerce & Industries Departments as the guest of honour along with Mr M T Sherpa, Secretary, Urban Development Department, Mr Manoj Rai, Commissioner of Commercial Taxes, Mr Binod Sharma, Director, Tourism and Civil Aviation Department, Mr R B Bhandari, GMC Commissioner, Assistant Directors, members of Panchayati Raj Institution, Municipal Executive Officers of six districts, Chartered Accountants, executive members of hotel associations and the stakeholders of the state.
Mr GT Dhungel, in his address, emphasised the importance of a conducive tax environment for the growth of the hospitality sector. He said that the primary goal of the meeting was to ensure the growth and prosperity of Sikkim and its stakeholders, ultimately uplifting businesses across all sectors. He encouraged participants to reach decisions that serve the collective good, while also urging them to remain sincere, self-reliant, and committed to development.
He stressed the importance of building trust as a foundation for capacity building, calling for a holistic approach to both licensing and the tourism sector. He reminded the stakeholders to adhere to the law in the best interests of the Sikkimese people.
He expressed his support for the proposal to form a sterling committee, floated during the meeting, and reiterated that all decisions should be made with a comprehensive view, ensuring that the interests of all stakeholders are considered. He encouraged them to provide feedback by October 31, underscoring the need for a collaborative and forward-thinking approach.
Furthermore, he assured the stakeholders that the government is committed to simplifying tax procedures and promoting ease of doing business.
Mr Tshering Thendup Bhutia, acknowledged the transformative impact of GST on the hospitality industry, highlighting how it has reshaped the taxation system. He noted that the hospitality sector plays a crucial role in Sikkim's economy, contributing significantly to the state's financial growth.
He stressed the importance of fostering an ecosystem like the one enabled by the day's meeting, aimed at bridging the communication gap between the administration and stakeholders. Recognising tourism as the state’s primary revenue generator, he underscored the need for streamlined processes to manage tax payments efficiently and integrate the sector seamlessly into the GST framework, ensuring smoother transactions from tourist inflows to government contributions. He emphasised that the cooperation and proactive engagement of stakeholders are key to sustaining this momentum and ensuring a robust economic future for Sikkim.
Mr M T Sherpa emphasized the importance of compliance with GST regulations for all commercial entities, highlighting the need for proper registration and adherence to GST rules for transparency and accountability. He also stressed that subletting Trade Licenses should be prohibited, as it undermines the legal framework and complicates business regulation.
In his remarks, Mr Sherpa urged commercial entities to act responsibly by following the law and registering with relevant departments. He proposed creating a business-friendly environment for issuing Trade Licenses, benefiting both the government and private sector. This would foster trust between businesses and regulatory bodies through improved efficiency and transparency.
Mr Manoj Rai, Commissioner of Commercial Taxes, delivered a detailed presentation outlining the latest measures aimed at streamlining tax processes and boosting tourism in Sikkim. He covered a broad spectrum of topics, from tax rates and default trials to the latest statistics in the tourism industry.
One of the key highlights was the distinction between ‘dependant tourism’ and ‘dependable tourism,’ emphasising the importance of creating a sustainable, long-term tourism model for Sikkim. He also discussed the potential domino effect of the Goods and Services Tax (GST) on the local economy. He outlined several important activities that are set to be rolled out in the coming months:
- The introduction of revenue generation through fees for the registration of hotel lease deeds and agreements.
- Both existing and new tourism-related businesses will now be required to register under the Sikkim Registration of Tourist Trade Act.
- A new software will enable the uploading of guest check-in and check-out data, along with identity documents, ensuring streamlined and secure operations.
- A user-friendly app will soon be available for obtaining permits to visit popular tourist spots such as Nathula, Tshangu, and Baba Mandir.
- To further promote tourism, an industrial promotional scheme offering attractive subsidies to hotels will soon be launched, encouraging growth and investment in the sector.
He also addressed several regulatory caveats aimed at tightening compliance in the tourism and hotel industry:
- Licenses will only be issued to either physical persons or legal entities, ensuring clear accountability.
- Any licensee intending to use a tradename must ensure it is properly registered.
- Regular and strict enforcement of the subletting restriction will be implemented to prevent any unauthorized activities.
- The license renewal will now require a No Objection Certificate (NOC) from all relevant departments and agencies, streamlining the renewal process and ensuring thorough checks.
Additionally, he also outlined the roadmap for stakeholders, stating that hoteliers who wish to contest the cancellation of their registration due to the lack of a proper license may submit a written representation to the Commercial Taxes Division before October 31, 2024.
Furthermore, lessors are urged to ensure that their lessees file all required tax returns and pay their taxes to avoid potential tax arrears falling upon the lessor.
In a forward-looking initiative, he proposed the creation of a steering committee to oversee and monitor the progress of these reforms. This committee, comprising senior officers from all relevant departments, will ensure that these new policies and regulations are effectively implemented across the state.
With these initiatives, Sikkim's tourism industry is set to benefit from a more transparent, accountable, and business-friendly environment, making the state an even more attractive destination for both tourists and investors, he said.
Likewise, Mr Mishel Chandak, Chartered Accountant, Gangtok gave a detailed presentation on the working of the Revenue Sharing Model, which allows parties to share profits and losses in a pre-determined ratio as an approach designed to foster collaboration and risk-sharing between business partners, enhancing business sustainability and profitability.
He explained that the revenue-sharing model is based on a mutual agreement between parties, sharing a certain percentage of the profits generated as well as bearing any incurred losses too, emphasising equitable collaboration, with both parties benefiting from their respective contributions to the business. This model can be structured on either the Gross Revenue or the Net Profit earned by the business under the Management Contract Module.
He mentioned that one of the most appealing aspects of the model is the ability to distribute financial risks, minimising the impact on any one party during periods of loss.
He emphasised that the Revenue Sharing Model represents a modern, flexible approach to business partnerships in Sikkim, particularly within the tourism and service sectors. By aligning the interests of all stakeholders and sharing both profits and risks, businesses can ensure long-term sustainability while fostering innovation and growth enhancing their brand reputation and goodwill.
An active interaction session ensued the presentation.
Mr Ramesh Chandra Rai, Assistant Commissioner of the Commercial Tax Division, Finance Department, extended his gratitude to all the stakeholders for their valuable presence and participation in the event. He acknowledged their contributions and underscored the significance of their collaboration in shaping the future of the industry.
The program was seamlessly conducted by Mr Kiran Thatal, Joint Commissioner, Commercial Tax Division, Finance Department, who skillfully served as the master of ceremony ensuring the smooth flow of the event and facilitating the discussions throughout.
The programme concluded with a vote of thanks proposed by Mr Dorjee Wangchuk Bhutia, Joint Commissioner, Commercial Tax Division, Finance Department.
The Commercial Taxes Division of the Finance Department convened a stakeholder meeting with hoteliers of Sikkim at Chintan Bhawan today.
The programme was graced by Mr GT Dhungel, Minister, Culture and Health and Family Welfare Departments, who is also the Member of GST Council, as the chief guest.
The meeting also had the presence of Mr Tshering Thendup Bhutia, Minister, Tourism and Civil Aviation and Commerce & Industries Departments as the guest of honour along with Mr M T Sherpa, Secretary, Urban Development Department, Mr Manoj Rai, Commissioner of Commercial Taxes, Mr Binod Sharma, Director, Tourism and Civil Aviation Department, Mr R B Bhandari, GMC Commissioner, Assistant Directors, members of Panchayati Raj Institution, Municipal Executive Officers of six districts, Chartered Accountants, executive members of hotel associations and the stakeholders of the state.
Mr GT Dhungel, in his address, emphasised the importance of a conducive tax environment for the growth of the hospitality sector. He said that the primary goal of the meeting was to ensure the growth and prosperity of Sikkim and its stakeholders, ultimately uplifting businesses across all sectors. He encouraged participants to reach decisions that serve the collective good, while also urging them to remain sincere, self-reliant, and committed to development.
He stressed the importance of building trust as a foundation for capacity building, calling for a holistic approach to both licensing and the tourism sector. He reminded the stakeholders to adhere to the law in the best interests of the Sikkimese people.
He expressed his support for the proposal to form a sterling committee, floated during the meeting, and reiterated that all decisions should be made with a comprehensive view, ensuring that the interests of all stakeholders are considered. He encouraged them to provide feedback by October 31, underscoring the need for a collaborative and forward-thinking approach.
Furthermore, he assured the stakeholders that the government is committed to simplifying tax procedures and promoting ease of doing business.
Mr Tshering Thendup Bhutia, acknowledged the transformative impact of GST on the hospitality industry, highlighting how it has reshaped the taxation system. He noted that the hospitality sector plays a crucial role in Sikkim's economy, contributing significantly to the state's financial growth.
He stressed the importance of fostering an ecosystem like the one enabled by the day's meeting, aimed at bridging the communication gap between the administration and stakeholders. Recognising tourism as the state’s primary revenue generator, he underscored the need for streamlined processes to manage tax payments efficiently and integrate the sector seamlessly into the GST framework, ensuring smoother transactions from tourist inflows to government contributions. He emphasised that the cooperation and proactive engagement of stakeholders are key to sustaining this momentum and ensuring a robust economic future for Sikkim.
Mr M T Sherpa emphasized the importance of compliance with GST regulations for all commercial entities, highlighting the need for proper registration and adherence to GST rules for transparency and accountability. He also stressed that subletting Trade Licenses should be prohibited, as it undermines the legal framework and complicates business regulation.
In his remarks, Mr Sherpa urged commercial entities to act responsibly by following the law and registering with relevant departments. He proposed creating a business-friendly environment for issuing Trade Licenses, benefiting both the government and private sector. This would foster trust between businesses and regulatory bodies through improved efficiency and transparency.
Mr Manoj Rai, Commissioner of Commercial Taxes, delivered a detailed presentation outlining the latest measures aimed at streamlining tax processes and boosting tourism in Sikkim. He covered a broad spectrum of topics, from tax rates and default trials to the latest statistics in the tourism industry.
One of the key highlights was the distinction between ‘dependant tourism’ and ‘dependable tourism,’ emphasising the importance of creating a sustainable, long-term tourism model for Sikkim. He also discussed the potential domino effect of the Goods and Services Tax (GST) on the local economy. He outlined several important activities that are set to be rolled out in the coming months:
- The introduction of revenue generation through fees for the registration of hotel lease deeds and agreements.
- Both existing and new tourism-related businesses will now be required to register under the Sikkim Registration of Tourist Trade Act.
- A new software will enable the uploading of guest check-in and check-out data, along with identity documents, ensuring streamlined and secure operations.
- A user-friendly app will soon be available for obtaining permits to visit popular tourist spots such as Nathula, Tshangu, and Baba Mandir.
- To further promote tourism, an industrial promotional scheme offering attractive subsidies to hotels will soon be launched, encouraging growth and investment in the sector.
He also addressed several regulatory caveats aimed at tightening compliance in the tourism and hotel industry:
- Licenses will only be issued to either physical persons or legal entities, ensuring clear accountability.
- Any licensee intending to use a tradename must ensure it is properly registered.
- Regular and strict enforcement of the subletting restriction will be implemented to prevent any unauthorized activities.
- The license renewal will now require a No Objection Certificate (NOC) from all relevant departments and agencies, streamlining the renewal process and ensuring thorough checks.
Additionally, he also outlined the roadmap for stakeholders, stating that hoteliers who wish to contest the cancellation of their registration due to the lack of a proper license may submit a written representation to the Commercial Taxes Division before October 31, 2024.
Furthermore, lessors are urged to ensure that their lessees file all required tax returns and pay their taxes to avoid potential tax arrears falling upon the lessor.
In a forward-looking initiative, he proposed the creation of a steering committee to oversee and monitor the progress of these reforms. This committee, comprising senior officers from all relevant departments, will ensure that these new policies and regulations are effectively implemented across the state.
With these initiatives, Sikkim's tourism industry is set to benefit from a more transparent, accountable, and business-friendly environment, making the state an even more attractive destination for both tourists and investors, he said.
Likewise, Mr Mishel Chandak, Chartered Accountant, Gangtok gave a detailed presentation on the working of the Revenue Sharing Model, which allows parties to share profits and losses in a pre-determined ratio as an approach designed to foster collaboration and risk-sharing between business partners, enhancing business sustainability and profitability.
He explained that the revenue-sharing model is based on a mutual agreement between parties, sharing a certain percentage of the profits generated as well as bearing any incurred losses too, emphasising equitable collaboration, with both parties benefiting from their respective contributions to the business. This model can be structured on either the Gross Revenue or the Net Profit earned by the business under the Management Contract Module.
He mentioned that one of the most appealing aspects of the model is the ability to distribute financial risks, minimising the impact on any one party during periods of loss.
He emphasised that the Revenue Sharing Model represents a modern, flexible approach to business partnerships in Sikkim, particularly within the tourism and service sectors. By aligning the interests of all stakeholders and sharing both profits and risks, businesses can ensure long-term sustainability while fostering innovation and growth enhancing their brand reputation and goodwill.
An active interaction session ensued the presentation.
Mr Ramesh Chandra Rai, Assistant Commissioner of the Commercial Tax Division, Finance Department, extended his gratitude to all the stakeholders for their valuable presence and participation in the event. He acknowledged their contributions and underscored the significance of their collaboration in shaping the future of the industry.
The program was seamlessly conducted by Mr Kiran Thatal, Joint Commissioner, Commercial Tax Division, Finance Department, who skillfully served as the master of ceremony ensuring the smooth flow of the event and facilitating the discussions throughout.
The programme concluded with a vote of thanks proposed by Mr Dorjee Wangchuk Bhutia, Joint Commissioner, Commercial Tax Division, Finance Department.