Rs. 2 TDS (Tax Deducted at Source) imposed, on every Rs. 100 payment of milk in cash; Amul in tax tangle for helping the hopeless farmers.

On May 6, Union Budget 2019-2020 announced that to impose 2 per cent TDS (Tax Deducted at Source) on above Rs. 1 crore cash withdrawal and this was to discourage for cash transactions, which may infectious for us due to coronavirus.

All regular suppliers of Amul are paid by cashless transfers, but the new farmers or small farmers, they requires the payments in cash and this will suffer by Amul as 2 per cent TDS. Because, paying the farmers, the Amul’s cash withdrawal from bank and sustain 2 per cent TDS for the withdrawal of above Rs. 1 crore. So, every Rs. 100 worth of Amul milk takes in cash costing Rs. 102 as per Rs. 2 TDS on Rs. 100 cash payment.

R S Sodhi Managing Director of  Amul says “Payment for non-members is by way of cash and that is a problem. If you withdraw more than Rs. 1 crore, there is a 2 per cent TDS that you need to pay. We are requesting the government to keep this limit suspend for the lockdown period because we do not have bank facilities everywhere, and our staff is limited”.

Gujarat Co-operative Milk Marketing Federation (GCMMF), which owes the Amul brand of milk and dairy products. So, they will pay Rs. 2 TDS on every Rs. 100 worth of cash payments and it will make new dairy farmers to join the network on request of Gujarat and Maharashtra Government.

For spread the network, the number of new dairy farmers temporarily joined its supply eco-system during the ongoing lockdown.

Due to lockdown, the networking of Gujarat Co-operative Milk Marketing Federation (GCMMF), restricted and this make it difficult to get the non-members on e-payment platforms. So, they have to return or pay them in cash and this cash payment add Rs. 2 TDS on every Rs. 100 worth of cash payments.