Cooperation Minister G. Sudhakaran has said that Kerala will have to explore ways, including possibly a new legislation, to circumvent the conditions sought to be imposed on the primary cooperative credit societies and other similar institutions by the Centre through the Direct Tax Code.
Responding to a calling attention motion from M.M. Monaye (CPI-M) in the Assembly on Friday, the Cooperation Minister said that unless this was done, the cooperative societies would have to pay 30 per cent of their turnover, without any provisioning for profits, as tax.
The area of operation of societies and banks had been restricted to taluks where they were located and they now had the permission to provide loans only for farm purposes, he said.
Mr. Sudhakaran said the Direct Tax Code had already sounded the death knell of the cooperative movement in Kerala and that all pleas from the State government on the subject had fallen on deaf ears. The Chief Minister had written to the Prime Minister and called on Finance Minister Pranab Mukherjee along with Left and Congress MPs and briefed him about the situation, but in vain. The Central government had expressed helplessness on the matter citing objections from the Reserve Bank of India (RBI), he said.
Earlier, Mr. Monaye urged the State government to step in to save the cooperative sector from imminent crisis on account of the Direct Tax Code.
Keywords: tax code