The federation says that the Centre should accept the actual cane price paid by co-operative sugar factories and necessary instructions should be issued to assessing officers of the I-Tdepartment. This has become necessary as the I-T authorities demand crores of rupees from co-operative sugar factories by taking into account the statutory minimum price (SMP) instead of the actual price of cane paid.

The federation said the I-T department's demand should be stayed till the final disposal of their appeal or till further instructions. The tax authorities, according to them, calculate payment of cane price differently for different factories and even for the same factory for different assessment years. In some cases, they take the basis of SMP of sugarcane decided by the Centre under the Essential Commodities Act, 1955, and Sugarcane Control Order, 1966, while in some other cases, they allow by way of cane price payment, the SMP as mentioned above plus additional cane price payable under section 5A of the Sugarcane Control Order, 1966. The federation has reiterated that the objective of establishing a co-operative unit was not to make profit but to give maximum possible price for thesugarcane supplied by farmers. This was in tune with internationally accepted principles of co-operatives to pay best returns for patronage given rather than for share capital contributed. The federation says that no farmer would be willing to supply his cane on the basis of cane price acceptable to the I-T department (for example-statutory minimum price plus 5A). "As a result, the sugar factories will be forced to close crushing operations which will lead to closure of the unit."