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Kerala dairy farmers on warpath against Union Govt move to tax milk co-ops

Milk co-ops protest Centre’s proposal; Kerala Govt, Opposition join in

The Union government’s move to impose income tax on primary milk cooperatives is kicking up a storm in Kerala. The government and the Opposition have cut across party lines to join hands against the NDA government at the Centre for its unilateral decision which would only hurt the milk cooperatives.

Terming the Centre’s move as ill-advised and unjustified, dairy farmers in the state said they fear that the imposition of income tax, at a time when the Covid-19 pandemic has already proved to be a bane, would only ruin their livelihood.

The Board of Direct Taxes in its circular No 13/2021, dated June 30, 2021, had proposed to bring primary milk co-operatives also come under the purview of income tax, as per the guidelines of the Section 194 Q of the Income Tax Act-1961. Apart from procurement and distribution of milk, the income from all allied products, including cattle feed sales, would be taken into account in calculating the tax, as per the proposal.

Echoing the sentiment of the hapless dairy farmers, Kerala’s Minister for Animal Husbandry and Dairy Development Minister J Chinchurani lashed out at the Union government saying that any move to impose income tax on primary milk co-operatives is “totally unacceptable”. The state assembly would resist such a move in all possible manner and a resolution against the proposal would be brought forth in the State Assembly. This resolution is expected to be fully supported by the Opposition too. The Minister said the state would put up stiff resistance against the proposal, till it is withdrawn.

Tax would add to dairy farmers’ hardships: Kerala Minister

Stating that the Union government has cast a huge burden on the dairy farmers who belong to the lowest rung of the society, the Minister pointed out that the new move to impose income tax on them will add to their hardships which have increased since the outbreak of the Covid-19 pandemic. 

Kerala has also written to the Union Finance Minister Nirmala Sitharaman demanding withdrawal of the decision, pointing out its grim fallout on the dairy sector. The issue was also raised at the meeting of dairy development ministers convened by the Centre.

It is a known fact that the Kerala government already has policies and programmes intended to support the dairy farmers. Further, as a co-operative network whose primary commitment is towards dairy farmers, Kerala Co-operative Milk Marketing Federation (KCMMF), or Milma as it is known as, along with its regional unions, has been consistently setting apart a bulk of its revenue for the welfare of the farmers by implementing pension, health and education schemes.

dairy farmers protest
Kerala’s Dairy Development Minister J Chinchurani and Opposition leader V D Satheesan join dairy farmers’ protest against the Centre’s move

Move to tax milk co-ops prompts Opposition to join hands with Govt.

Meanwhile, V D Satheesan, the Opposition Leader in the State Assembly and senior Congress leader, joined the protests, hand in hand with the State government so as to counter the Centre’s unilateral move. The Opposition leader stressed the need to stand together, setting aside political differences, to thwart the move. According to him, the Union government’s has unilaterally made such a decision without any consultation with the people and organisations engaged in the dairy sector.  This issue would be raised in the State Assembly in the next session as a serious matter, he pointed out.

Milma has already set in motion a slew of protest measures against the Union government’s move. The agitation is set to add more strength in the coming days. Pointing out that the Centre’s move would only deal a crippling blow to the co-operative dairy sector, K S Mani, Chairman, Milma, termed the decision as ill-advised and unjustified move. He warned that the move to impose income tax on dairy farmers will only cripple them in these trying times.

The coming days are expected to see quite a wave of protests across Kerala, with dairy farmers, co-operative societies all gearing up to launch agitations demanding the roll-back of the taxation move. They have also called upon all MPs from the state to put pressure on the Centre to keep its proposal at bay.

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Sanjeev Ramachandran

A journalist with 23 years of experience, Sanjeev has worked with reputed media houses such as Business Standard, The Ne More »
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