Taxation issues hampering credit co-ops’ growth: NAFCUB

The representatives of urban cooperative Credit Societies including multi-state Cooperative societies yesterday resolved to represent their case before the government and CBDT as they are facing many taxation problems which is hampering their efficiency.

At a 3 day workshop organised by NCUI and NAFCUB, they pointed out that while assessing income of a primary society, IT department has not accepted all members as members of the societies. This lack of clarification has led to many IT notices sent to such cooperative societies to pay heavy tax amount despite the fact that these societies are exempted from payment of tax as per section 80 P (2 i) of Income Tax Act 1961.

More than 60 representatives belonging to urban cooperative credit societies from Gujarat, Maharashtra, Karnataka, Odisha etc attended the workshop on issues relating to income tax and other matters for urban cooperative credit societies organised from 29th till 31st January, 2018.

“Whenever business of a society with nominal members is made, the department is taxing income of a primary society which is against spirit of section 80P (2) in which provides tax exemption of such societies, the representatives of urban cooperative credit societies said.

They have sought clarifications from Central Board of Direct Taxes (CBDT) regarding assessing officers who levy tax from the societies doing business with the members, either nominal or regular. The resolution adopted by the members also demanded that in case of deposits of scheduled banks under 80 (C) of income tax Act, same deduction is to be provided to all other cooperative banks/credit societies.

Shri N. Satyanarayana, Chief Executive NCUI pointed out that there is urgent need to approach Finance Ministry and CBDT to resolve these issues. The workshop discussed the case of Citizen Cooperative Credit Society whose representative Shri P. V. Subbiah Choudhary, CGM pointed out that his society has also been issued demand notice from Income Tax Department despite Supreme Court Judgement dated 08.08.2017 pointing out that RBI has clarified that the business of his society does not amount to that of cooperative banks which are liable to pay income tax. In this regard, Citizen Cooperative Credit Society, Hyderabad has lost its case in the Supreme Court.

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