The government’s decision to reduce the minimum alternative tax (MAT) for cooperative societies from the current 18.5 per cent to 15 per cent on par with private companies will help the cooperative societies to strengthen their financial positions and plan new schemes.
Finance Minister Nirmala Sitharaman while presenting the Budget on Tuesday also said the government has also proposed to reduce the surcharge on cooperative societies from the present 12 per cent to 7 per cent for those having total income of more than ₹1 crore up to ₹10 crore.
“Cooperative societies will benefit because of these decisions. Already the cooperative sector is struggling at various levels. The decisions provide a level-playing field between cooperative societies and companies. Societies need funds to plan and execute schemes and the savings from taxes will prove tonic to ailing societies,” said Ganpatrao Sawant, former Chairman of Sangli-based Vasantdada Cooperative Society.
Currently, the cooperative societies are required to pay MAT at the rate of 18.5 per cent, while the companies paid at the rate of 15 per cent.
PP Pawar, member of the village cooperative in Kundal (Sangli), said the decision announced by the government comes at a time when many village co-operatives are struggling for survival. “The cooperatives are the backbone of rural economy and the government’s decision about MAT is defiantly a welcome step,” he said.
The majority of the farmers are completely dependent on cooperative societies and the government’s decision provides breathing space for gasping cooperatives, he added.