Comments
The Agriculture Ministry has written to the Finance Ministry seeking income-tax exemption for farmer produce organisations (FPOs), particularly for those that are registered as farmer producer companies (FPO) under the Companies Act.
“These FPOs were brought in to negotiate the problems that are faced by cooperative societies. So they are naturally eligible for all the benefits that cooperatives are enjoying already,” sources in the Agriculture Ministry said on Wednesday.
While the I-T Act exempts cooperatives from paying under the section 35CCC, FPCs are taxed on par with private and public-limited companies.
According to data available with Small Farmers’ Agribusiness Consortium, which comes under the Agriculture Ministry, there are about 750 FPOs in the country at present, with over 7.4-lakh farmers under them.
The government has been promoting FPOs as collectives of small and marginal farmers, as they would help address the challenges that small farmers face, particularly those relating to access to investment and technology. To encourage them, the government has been giving matching grants to the equity raised by recognised FPOs.
FPOs registered as FPCs, however, have been demanding income-tax exemption for a while now. This issue came up as one of the key demands from women farmer leaders, who came to the capital for an interface with different government departments. Suneeta Kashyap, a woman farmer leader with an Utharakhand-based FPC, Mahila Umang Producers Company Limited, said her organisation has no choice but pay income-tax, even though their products are from the agricultural sector, which is exempt from tax.
The problem has become more grievous for them after the implementation of GST regime, she said.
“Income tax and the new GST regime are dealing a severe blow to the profitability of collectives like ours,” Kashyap said.
FPCs should be exempted from income-tax, said Kurbur Shantakumar of Raithamithra Farmer Producer Company Ltd, which is based out of Mysore. The government, which has been encouraging the concept of FPOs/FPCs, should exempt such entities from paying income-tax at least for the first five years, Shantakumar said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.