Background
The Sikkim Taxation Professions, Trades, Callings and Employments Act, 2006 was enacted to levy and collect a tax on professions, trades, callings, and employments in the state of Sikkim. The legislation ensures contribution from individuals and entities engaged in economic activities towards the state revenue. It empowers the prescribed authorities to register employers, enroll individuals, collect tax, and monitor compliance through returns, payments, and maintenance of records.
Applicability
The Act applies to:
Every person engaged in any profession, trade, calling or employment and falling under one or the other of the classes mentioned in column II of the Schedule shall be liable to pay to the State Government the tax at the rate mentioned against the class of such persons in column III of the said Schedule: Provided that entry in the Schedule shall apply only to such classes of persons as may be specified by the State Government by notification from time to time.
Compliance requirement under the Act in Accordance with the Rules
Certificate of Enrollment under Professional Tax as applicable on the Practising Professional in the State of Operations
Every person liable to pay tax under this Act, except those earning a salary or wages for whom the tax is payable by their employer, must obtain a certificate of enrolment from the prescribed authority in Form 3.
Certificate of Registration under Professional Tax as applicable on the Employers in the State of Operations.
Every employer, other than a government officer, who is liable to pay tax under Section 6 must obtain a registration certificate from the assessing authority in Form 1.
In the event of any change in the trade or business, or any part thereof, changes in the nature of profession, trade or business, or changes in the constitution of board of directors in the case of a company, or discontinuation of the profession, trade or business of any person liable for tax under this Act, or changes of place of work, the employer or the person concerned shall, within thirty days from the date of such changes or discontinuance, inform the prescribed authority in an application furnishing necessary particulars together with the copy of the certificate of registration or enrolment, as the case may be.
Every employer registered under the Act shall furnish a return in respect of every quarter, on or before the end of the month following the end of the quarter, showing the salaries and wages paid by him and the amount of tax deducted in respect thereof, in Form 5. Every such return shall be accompanied by a challan of payment.
A registered employer, who is required to furnish returns referred to in Rule 12, shall pay on a monthly basis into the appropriate Government treasury the amount of tax payable, within fifteen days from the end of every month to which such tax relates, unless the Commissioner directs otherwise. Every return shall be accompanied by a receipted challan of payment made.
A person liable to pay tax (other than employer) shall make the payment on an annual basis. The tax for a given year or part thereof must be paid within three months from the end of the respective year.
A copy of the receipted challan of payment of tax shall be furnished by a person other than employer to the prescribed authority within fifteen days from the date of payment of such tax along with a statement in Form 10.
Every employer or person shall maintain accurate and up-to-date accounts and documents related to their business, profession, trade, or calling, including records of salary and wage disbursements for employees or workers. Additionally, they must keep registers or accounts in the form prescribed by the prescribed authority.
If a holder of a registration or enrolment certificate shifts their place of work to another area, they must notify the prescribed authority from where the certificate was issued within fifteen days of the shift. A copy of this notice must also be sent to the prescribed authority having jurisdiction over the new location.
Penalties & Punishments
Conclusion
The Act creates a structured framework for the collection of professional tax in Sikkim, ensuring timely registration, enrolment, return filing, and tax payment by employers and self-employed persons. By mandating proper record-keeping and compliance, it not only aids the state in mobilizing revenue but also establishes accountability for both employers and individuals engaged in professional and business activities.
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