56 co-op sugar mills slapped with Rs 2,500-cr I-T notice

Issue grave, can lead to a very difficult situation, says Harshavardhan Patil

Co-operatives Minister Harshavardhan Patil on Wednesday revealed that Income Tax (I-T) recovery notices have been served on 56 co-operative sugar mills in the state demanding Rs 2500 crore tax on "profits" made by factories since 2,000.

Addressing a press conference at Patrakar Bhavan in the city on Wednesday, Patil said most of the mills are from Western Maharashtra but mills in other parts of the state are expected to get similar I-T notices in a few days.

"Co-operative mills are fighting an earlier I-T notice seeking Rs 2,500 crore issued a few years ago demanding tax recovery for perceived profits made by these mills between 1984 and 2000. The fresh notice is for 2001 to 2012. The 56 mills have been asked to Rs 2500 crore and the department has threatened to freeze bank accounts of the mills if they fail to pay," said Patil.

"The issue is grave and can lead to a very difficult situation and if bank accounts are frozen mills won't be able to pay farmers for cane or salaries to workers," said Patil.

Karmayogi Shankarrao Patil Cooperative Sugar Factory, Indapur in Pune district, controlled by Patil, is among the mills that received the IT notice.

He said he has met Chief Minister Prithviraj Chavan on this issue and he is expected to rush to Delhi seeking intervention of Union Agriculture Minister Sharad Pawar and Finance Minister P Chidambaram.

"Our mill has been asked to pay income tax at the rate of Rs 1.5 crore per month till April next year. The total amount is around Rs 110 crore. All the money made by selling sugar has been paid to farmers and the mill is not left with any to pay tax," said Patil adding the notice was unjustifiable as co-operative mills do not make any profit per se.

Patil said the I-T department is demanding tax on payments made over and above the Fair and Remunerative Price (FRP) paid to cane farmers.

"Many factories in the state pay farmers higher than the FRP declared by the national body. Last year, the FRP was Rs 1,850 per tonne but many mills paid growers over Rs 2,400 per tonne. The I-T department is of the view payment by factories above FRP is profit and mills should pay tax on it. This argument is flawed as in the case of sugar mills owners, suppliers and sellers are farmers and whatever profit is made by selling sugar is shared by farmers. The mill isn't left with any money to pay I-T," said Patil.

3 new awards for co-operatives

AS the UN International Year of Cooperatives draws to a close, the state Co-operatives Ministry has instituted three awards to honour co-operative bodies for excellent performance.

The Sahakar Maharshi (Rs 1 lakh, memento and certificate), Sahakar Bhushan (Rs 51,000, memento and certificate) and Sahakar Nishtha (Rs 25,000, memento and certificate) will be handed over to 27 co-operative bodies in the first edition of the awards on December 2 at Balewadi Stadium by Governor K Sankaranarayanan.

"We received 102 applications of which 27 were selected," said Cooperatives Minister Patil. The first Sahakar Maharshi Award has gone to Shree Hanuman Sahakari Dudh Vyavasayik Wa Krishi Purak Seva Sanstha from Yedgul village in Kolhapur district.

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