Sahakara Bharati opposes I-T on PACS, Souharda co-operatives

Our Bureau Mangaluru | Updated on January 01, 2020

Sahakara Bharati, an organisation for promoting cooperative movement in the country, has said that the cooperative sector existence is under threat as the Central and State governments are imposing different kinds of taxes on Primary Agricultural Credit Society and Souharda co-operatives.

Addressing presspersons in Mangaluru on Wednesday, Krishnaprasad Madthila, president of Dakshina Kannada unit of Sahakara Bharati, said the imposition of income tax and GST is negatively impacting the financial condition of these cooperative societies.

Earlier cooperative societies had provisions for deduction under the Section 80(P) of Income Tax Act. However, now the district primary agricultural cooperative societies and other Souharda cooperatives have been issued notices by the Income Tax Department to pay lakhs of rupees in taxes following a Supreme Court judgement in this regard. They have been asked to pay 30 per cent tax on profits. This is not justifiable, he said.

Terming it as a direct attack on the existence of cooperative societies, Madthila said PACS provide loans to agriculture-related activities. Such institutions have profound impact on the lives of people, especially in rural areas.

Cooperative societies also provide jobs to thousands of people in the local job market. The pressure to pay income tax may affect the financial conditions of these cooperative institutions badly. This may create loss of faith in cooperative institutions leading to withdrawal of deposits from cooperative societies, he said.

In the present situation, there is an attempt to hurt the cooperatives by imposing unlimited taxes on them. Sahakara Bharati condemns income and other taxes on these cooperative institutions, he said. Urging the government to withdraw income tax on these institutions, he said it should take steps to protect and develop the cooperative movement in the country.

Published on January 01, 2020

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