Gandhinagar, May 27: The Gujarat government has taken a significant step by approving a crucial financial and policy measure for the cooperative sugar sector. This decision allows farmers to register for selling summer moong at the minimum support price (MSP), benefiting over 200,000 farmers and cooperatives across the state.
Agriculture and Cooperation Minister Jitu Vaghani announced that the government has officially sanctioned the cane prices paid to farmers by cooperative sugar mills during the period from 2007-08 to 2014-15.
This approval is expected to provide approximately ₹1,500 crore in financial relief to Gujarat’s cooperative sugar mills, effectively eliminating long-standing tax burdens.
The issue arose when the Income Tax Department issued tax demand notices to several cooperative sugar mills, treating payments exceeding the fair and remunerative price (FRP) set by the central government as profits. This situation led to a potential liability of around ₹1,500 crore for the sector. The recent approval now formally recognizes these payments made under revenue-sharing practices within the cooperative model.
Vaghani explained that Gujarat’s sugar cooperatives have consistently distributed income from by-products like jaggery, ethanol, and co-generated electricity to farmers, resulting in better profits for cane producers compared to many other states.
This development follows national legislative and policy changes after the establishment of the Ministry of Cooperation. Officials noted that amendments to the Income Tax Act in 2023, under the leadership of Prime Minister Narendra Modi and Union Home and Cooperation Minister Amit Shah, allowed state-approved cane pricing structures to be recognized for tax purposes.
Subsequently, the state government formed a high-level committee that recommended formal approval of the payments made during the specified period.
In conjunction with this decision, the Agriculture Department has announced the start of online registration for the purchase of summer moong under the MSP scheme for the 2025-26 season. Registration will begin on May 27 and continue until June 10 at e-Gram centers across Gujarat. Farmers will need to complete the registration using biometric fingerprint or facial authentication.
Leave a Comment