THIRUVANANTHAPURAM: The Assembly on Thursday unanimously passed a resolution demanding the cancellation of the amendment in the Income Tax Act bringing cooperative institutions within the purview of income tax.

Minister for Cooperation G. Sudhakaran, moving the Government resolution, said the cooperative institutions would have to pay income tax at the rate of 30 per cent of their turnover as per the new amendment under 80 (d) of the Income Tax Act. He said the IT norms would affect the profitability of the State Cooperative Bank, the district co-operative banks and urban cooperative banks.

The Opposition wanted consumer cooperative societies also to be brought within the purview of the resolution. Moving an amendment, Congress MLA K. C. Joseph said that the resolution should seek exemption for consumer cooperatives and marketing cooperatives that had been brought under the purview of the VAT legislations taking into account the financial crisis they were facing.

Finance Minister Thomas Isaac, however, opposed the move stating that it would not be possible to exempt a sector from the purview of the tax. He could have considered it if the matter related to a taxable item, he said. Previously these cooperatives were paying sales tax and the issue raised by the Opposition had no connection to that getting IT exemption, he said.

Leader of the Opposition Oommen Chandy who supplemented Mr. Joseph's contention later said the Opposition was accepting the Minister's resolution in the belief that the problems faced by these cooperatives would be addressed.

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