Centre Says Tax Exemption For Cooperative-Made Goods Lies With GST Council; Lists Wide-Ranging Tax Relief & Financial Support For Cooperatives

The Union Minister for Cooperation, has told the Lok Sabha that the Government received requests to exempt goods made by cooperative societies from GST. However, decisions on GST exemptions are taken by the GST Council, which is a constitutional body. Despite this, the Minister said that the Central Government has already given many tax benefits to cooperatives to improve their financial strength and business growth. Tax Reliefs Already Given:- The reply lists several tax concessions given to cooperative societies, including: · The extra surcharge on cooperatives earning ₹1–10 crore has been reduced from 12% to 7%. · The Minimum Alternate Tax (MAT) for cooperatives has been reduced from 18.5% to 15% same as companies. · Cooperatives can now make cash transactions below ₹2 lakh per day without any penalty. · New manufacturing cooperatives will now pay a flat 15% tax instead of earlier high rates up to 30% plus surcharge. · Cash deposits and payments allowed for Primary Agriculture Credit Society (PACS) and Primary Cooperative Agriculture and Rural Development Banks (PCARDBs) have been increased from ₹20,000 to ₹2 lakh per member. · Cooperatives can now withdraw cash up to ₹3 crore per year without TDS (earlier only up to ₹1 crore). · Sugar cooperative mills have been given special income-tax relief under Sections 36(1)(xvii) and 155(19). · GST on molasses has been reduced sharply from 28% to 5% to help sugar mills earn more. Government Funding And Support The reply also highlights several financial initiatives taken to help cooperatives: · The Government is computerizing PACS, and many societies have already been shifted to a common software system. · A similar computerization project is also being carried out for Agriculture and Rural Development Banks (ARDBs) across various States and Union Territories. · A loan scheme has been launched to support sugar cooperative mills for setting up ethanol units, power generation facilities, and for meeting working-capital needs. · The National Cooperative Development Corporation (NCDC) has been providing financial assistance to cooperative institutions across the country since its formation. The Government clarified that even though a GST exemption has not been granted, the Centre has taken multiple steps to reduce the tax burden on cooperatives and improve their financial viability. The reply shows that the Government is trying to strengthen cooperatives through tax reliefs, funding support, digital initiatives and banking reforms, even while GST exemption remains a decision of the GST Council. Click Here To Read/Download

Centre Says Tax Exemption For Cooperative-Made Goods Lies With GST Council; Lists Wide-Ranging Tax Relief & Financial Support For Cooperatives

Rajnandini Dutta

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