The income tax reliefs provided to the cooperatives was listed by the Minister of Cooperation Amit Shah in his written reply before the Rajya Sabha
By Navasree A.M – On December 12, 2024 2:38 pm – 2 mins read
The central government has provided 9 income tax relief measures to cooperative societies, intending to improve their financial stability and supporting their members, particularly in rural and farming communities.
In a written reply to a question in the Rajya Sabha, Minister of Cooperation Amit Shah detailed the following key reliefs:
Reduction in Surcharge: The surcharge for cooperative societies with income exceeding тВ╣1 crore and up to тВ╣10 crore has been reduced from 12% to 7%. This step is expected to increase the disposable income of cooperative societies, benefiting their members.
Reduced Alternate Minimum Tax (AMT): The AMT rate for cooperative societies has been reduced from 18.5% to 15%, aligning it with the rate applicable to companies, thus creating a level playing field.
Relief in Cash Transactions (Section 269ST): Section 269ST restricts cash receipts exceeding тВ╣2 lakh, but penalties were previously imposed on milk cooperative societies for transactions spread over multiple days. A clarification issued by the CBDT now excludes dealership or distributorship contracts from being considered a single event, enabling cooperative societies to operate without fear of penalties.
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Concessional Tax Rate for New Manufacturing Cooperatives: New cooperatives commencing manufacturing activities before March 31, 2024, are eligible for a reduced tax rate of 15%, akin to new manufacturing companies.
Relaxation in Cash Loans and Deposits (Section 269SS): The cash limit for loans or deposits by Primary Agricultural Credit Societies ( PACS ) and Primary Cooperative Agricultural and Rural Development Banks (PCARDB) has been increased from тВ╣20,000 to тВ╣2 lakh, exempting them from penalties for transactions below this threshold.
Relief for Loan Repayments in Cash (Section 269T): Similarly, the cash repayment limit for loans or deposits by PACS and PCARDB has been raised from тВ╣20,000 to тВ╣2 lakh, mitigating penalties for small-scale transactions.
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Higher Cash Withdrawal Limit Without TDS: Dairy cooperatives and other rural cooperatives can now withdraw up to тВ╣3 crore in cash annually without TDS, up from the previous limit of тВ╣1 crore.
Income Tax Relief for Sugar Cooperative Mills: Tax liabilities for additional sugarcane price payments by sugar cooperative mills have been resolved retroactively from April 1, 2016. This measure has clarified ambiguities and mitigated tax burdens for sugar mills.
Resolution of Historical Tax Issues for Sugar Mills: Decades-old pending tax issues for sugar cooperative mills have been addressed by allowing claims on payments to sugarcane farmers for periods before the assessment year 2016-17. The Finance Act, 2023, introduced necessary amendments, supported by a Standard Operating Procedure issued by the CBDT, providing relief of nearly тВ╣10,000 crore.
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Excess GST ITC Claim on Account of Non-Reconciliation of Information: Madras HC demands 25% Pre-deposit for Hearing [Read Order]
The petitioner relied on judgment by the Madras High Court in the case of M/s. K. Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise, which was favorable to such circumstances.
By Navasree A.M – On December 12, 2024 2:05 pm – 2 mins read
The Madras High Court has demanded to make pre-deposit 25% for granting hearing opportunity on challenging the contested GST ( Goods and Services Tax ) demand order alleging excess GST Input Tax Credit ( ITC ) claim on account of non-reconciliation of the information.
The petitioner, a business engaged in electricity generation through windmills, supplies power to its customers through the Tamil Nadu Electricity Board. During a routine scrutiny of the petitionerтАЩs annual GST return, excess ITC was found, arising from the non-reconciliation of certain information.
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This piloted to the issuance of a Show Cause Notice (SCN), and the subsequent impugned order confirmed the excess ITC claim.
The petitioner, M/s.Saks Power Private Limited, contended that both the SCN and the assessment order were not physically served to them through tender or registered post but were instead uploaded on the common GST portal.
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As a result, the petitioner claimed that they were unable to access the portal and therefore could not participate in the adjudication proceedings. The counsel representing the petitioner further submitted that, if granted an opportunity, the petitioner would be able to explain the discrepancies and clarify the issues at hand.
The petitioner relied on judgment by the Madras High Court in the case of M/s. K. Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise, which was favorable to such circumstances.
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The petitioner also expressed their willingness to pay 25% of the disputed tax amount and requested a final opportunity to present their objections before the adjudicating authority.
The Additional Government Pleader, representing the respondents, did not object to this request.
Consequently, Justice Mohammed Shaffiq set aside the impugned order, directing the petitioner to deposit 25% of the disputed tax amount within four weeks.
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After making such compliance, the court stated that the impugned order would be treated as a show cause notice, and the petitioner would be allowed to submit objections and supporting documents within an additional four weeks. The authorities were instructed to consider these objections and pass appropriate orders after granting a reasonable hearing.To Read the full text of the Order CLICK HERE
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