Milma seeks IT exemption for primary dairy cooperatives

Govt. intervention sought to explore possibility of withdrawal of new direct tax rules

Kerala’s apex milk cooperative Milma has appealed to the Union government to exempt primary dairy cooperatives from the purview of income tax after the government notified that cooperatives with more than ₹50 lakh turnover should come under tax deduction at source (TDS) for the amount exceeding ₹50 lakh. The Amul model milk cooperatives in the State do not work on the model of profits, and they have no profit capitalisation. Portions of profit made by cooperatives go into various funds that benefit dairy farmers, said K.S. Mani of the milk cooperative on Saturday. He added that around a million dairy farmers were attached to the milk cooperative directly, and that the imposition of income tax would affect the functioning of cooperatives. Dairy farmers are one of the most marginalised segments of the farming sector, and incentivising them is one of the ways to enhance milk production. The new direct tax imposition will not help the process, he said, adding that auditing accounts of cooperatives lagged, and that fines slapped under the new norms on cooperatives for not filing returns in time would further impact their operation. He also said that the profit earned by primary dairy cooperatives was being returned to dairy farmers themselves in the form of various subsidies and incentives.