GANGTOK: 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 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 Tshering Thendup Bhutia, Minister, Tourism and Civil Aviation and Commerce & Industries Departments as the guest of honour along with MT Sherpa, secretary, Urban Development department, Manoj Rai, Commissioner of Commercial Taxes, Binod Sharma, director, Tourism and Civil Aviation department, RB 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.
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. The minister 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.
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.
MT 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, 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.
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. - IPR
