I-T tribunal to hear Maharashtra sugar co-ops' appeal on notice next week

The Maharashtra sugar industry would begin fresh arguments before the Income Tax Appellate Tribunal on October 4 against the notices served to various cooperative sugar factories for income tax payment of Rs 2,500 crore as arrears since 1991-92.

The state government had taken up the issue on the sugar industry’s behalf with the central government.

An official of the Federation of Cooperative Sugar Industries in Maharashtra, who did not want to be identified, said: “The recovery of such huge tax demands will adversely affect the mills’ finances. The demand is for tax on payments made over and above the statutory minimum price to cane farmers. Sugar mills and the Federation, a representative body of over 170 co-operative mills in the state, are consistent in their argument that the payment was to ensure continuous and adequate supply from small and marginal farmers who are obliged to supply the cane to a sugar factory within their area. The income tax department is treating it as a profit, which is not the case.”

Income tax department sources declined to comment on the issue.

Meanwhile, cooperative sugar mills have made a fresh demand to the Centre to reimpose a 60 per cent duty on imported sugar with immediate effect.

“India is in a comfortable position in the case of sugar. The production during the 2011-12 crushing season is estimated at 26 million tonnes. There is no need of import at zero per cent. We have sent a fresh memorandum to the finance minister in this regard,” the Federation official said.