Over 270 urban cooperative banks (UCBs) and district cooperative banks (DCBs) in Gujarat will observe a day's strike on Thursday, December 8, 2011, demanding income tax exemption for the cooperative banks, which was in force till 2006.
Currently, cooperative banks are liable to pay a flat 30 per cent income tax on their earnings. The income tax waiver for cooperative banks, which was in force since independence, was removed in 2006-07 and the amendment to Finance Act, 2006 brought them under the income tax net by the-then congress-led UPA government.
Post amendment, earnings of UCBs, DCCBs and state cooperative banks (SCBs) have become taxable with effect from the financial year 2006-07.
"It is sad that Sonia Gandhi's congress has brought cooperative banks under the income tax net. They (coop banks) were given income tax waiver since Jawaharlal Nehru's regime, but UPA government has imposed income tax on it. All of Gujarat's cooperative banks will remain closed tomorrow as a mark of protest of the income tax," said Dileep Sanghani, minister for agriculture and cooperatives, government of Gujarat, while endorsing the strike call.
Sanghani is also chairman of Amreli District Industrial Cooperative Bank. In a statement issued on Wednesday, Gujarat Urban Cooperative Banks Federation (GUCBF) announced a one-day strike on Thursday. The cooperative federations have been demanding restoration of tax exemption under the Article 80 P of the Income Tax Act.
"Withdrawal of income tax exemption to cooperative banks has proved a major hurdle in the growth of this sector. Several representations have been made in this regard over a period of past five years at the finance minister level, president and ruling as well as opposition parties in the parliament. But no favourable outcome has come so far, hence we have called a strike of cooperative banks in Gujarat," said Jyotindra Mehta, president, GUCBF.
The strike call will be observed by 18 DCBs, 270 UCBs and one state cooperative bank in Gujarat.