Maharashtra Cooperative Sugar Industry hails Center’s decision to waive income tax demands since 1985

Maharashtra’s cooperative sugar factories have received major relief after the Center waived income tax claims made against them since 1985. The decision came days after a number of representations made by the sector cooperative sugar producer with the Centre.

Recently, former union agriculture minister Sharad Pawar and former chief minister Devendra Fadnavis had met separately with union cooperation minister Amit Shah demanding relief from income tax claims worth Rs 9,500 crore at All India level of which Rs 8,000 crore alone was from the Maharashtra Sugar Cooperative Industry.

Cooperative sugar mills received income tax notices for paying a higher fair and remunerative price. They had demanded an end to the coercive action and the holding of a direct hearing. The price of sugar cane given to farmers by the cooperative mills should be considered as a business expense as a whole.

The cooperative sugar industry argued that any expense incurred by the sugar mills for the purchase of sugar cane was deemed to be incurred entirely and exclusively for the purposes of their business.

Maharashtra’s former Cooperation Minister, Harshvardhan Patil, thanked the Center for taking a “groundbreaking” decision. On the other hand, MD Prakash Naiknavare of the National Federation of Sugar Cooperatives told the Free Press Journal, “The Centre’s decision will bring relief to the sugar industry which is bearing the dangling sword of fiscal demands.”

The cooperative sugar industry had argued that sugar cane was subject to the Essential Commodities Act and therefore the price of sugar cane obtained by the farmer was controlled by the law under which prices are announced by the Center and the state governments. This obliges the sugar mills to pay this minimum price to the farmers.

”Mills in Maharashtra, parts of Karnataka and Gujarat mainly in the cooperative sector which are established, managed and owned by the farmers themselves were obviously paying above the government price in good season years. This additional price, which exceeds the government declared price, is taxed by IT authorities and the cumulative outstanding on a total Indian basis is Rs 9,500 crore out of Rs 8,000 crore from factories in Maharashtra’ ‘, said the manager of a major cooperative factory in western Maharashtra.

He said the factories’ financial situation did not allow them to honor the tax demand because the cooperative sugar industry had paid the extra price of the cane to the farmers 30 years ago and it was practically impossible to recover them. to farmers.

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Posted: Friday, January 7, 2022, 11:36 PM IST

Rachel J. Bradford