The income tax department has begun issuing fresh demand notices to cooperative sugar mills in Maharashtra for paying cane price over and above the fair and remunerative price (FRP) fixed by the government.
According to Vithal Pawar, general secretary, Shetkari Sanghatana, led by Sharad Joshi and chief coordinator, Shetkari Sakhar Karkhane Andolan, Maharashtra state, the the I-T department has begun slapping notices to sugar mills for periods ranging from 2007-08 to 2011-12.
“ These demand notices are being issued even as the I-T department has stayed till September 30, 2013 for tax recovery worth R1,000 crore from mills,” he alleged.
Last year, income tax recovery notices were served on 56 co-operative sugar mills in the state demanding R2,500 crore tax on “profits” made by factories since 2000. The I-T department had assessed the dues of the sugar industry at R5,000 crore for the period from 1984 to 2011.
“However, the additional commissioner of income tax, Pune, on April 1 stayed the tax demand which was kept in abeyance till September 30 or an order of the Supreme Court in the case pertaining to Tasgaon cooperative sugar factory, whichever is earlier,” officials from Maharashtra State Sugar Cooperative Factories Federation said.
A delegation of the federation officials pressed the department to accept 5% of the total installment instead of the 10%, and accordingly mills have paid income tax dues to the tune of R25 crore, officials said.
The Shetkari Sanghatana, which has formed a forum to help aggrieved mills, said that around 22 sugar mills in Maharashtra so far had approached the organisation to intervene.
RS Naik, MD, Chhattrapati Bhawaninagar SSK, Indapur, said his mill had received notices to the tune of R96.03 crore for the period ranging between 2007-08 to 2009-10. The total demand from the year 1991 for this mill comes upto R194 crore, Pawar pointed out. Vithalrao Shinde SSK, Solapur has received an I-T notice with a demand to pay up R43.55 crore for the period 2010-11, Pawar said.
When contacted, Sanjiv Babar, MD, Maharashtra State Sugar Cooperative Factories Federation, confirmed that mills in the state have begun receiving fresh notices. The federation is gathering information from the mills and will soon approach the authorities, he said.
The sugar industry had earlier demanded that there should be no income tax on sugar mills.
The Shetkari Sanghatana said that the state has been facing a drought situation for the last three years and several mills were yet to make the final payment to farmers for a period of 5-6 years. He said co-operatives do not pay any income tax because they say the profit generated is distributed among member farmers. However, according to the I-T department, the money paid to farmers above the FRP is profit and hence attracts income tax.
The Shetkari Sanghatana plans to meet the chief income tax commissioner of Pune and other branch offices in the state, and also plans to hold demonstrations outside the offices of the department on October 9 to take back demand notices.