Gujarat Clears Rs 1,500 Cr Tax Relief for Sugar Cooperatives

Gandhinagar: The Gujarat government has taken a decisive step to support its cooperative sugar industry by granting official approval to sugarcane payments made to farmers from 2007-08 to 2014-15. The move is expected to wipe out nearly Rs 1,500 crore in pending tax liabilities that had been hanging over cooperative sugar mills. Cooperation Minister Jitu Vaghani said the decision addresses concerns raised after the Income Tax Department issued notices to mills for payments made above the central government’s Fair and Remunerative Price. These payments, which were part of revenue-sharing practices common in cooperatives, were previously treated as profits, leading to substantial tax demands. By granting formal recognition, the state has validated the long-standing practice of distributing income from by-products such as ethanol, jaggery, and electricity among sugarcane growers. This model has historically ensured higher returns for Gujarat’s farmers compared to other regions. The policy shift follows legislative changes at the national level in 2023, which allowed state-approved pricing structures to be considered for tax purposes. A high-powered committee reviewed the payments and recommended their approval. In a related development, the agriculture department has launched online registration for summer moong procurement under the MSP scheme for 2025-26. The registration window will remain open from May 27 to June 10 at e-gram centers statewide, with biometric authentication required for farmers. The announcements are expected to benefit over two lakh farmers and cooperative institutions across Gujarat.