Monday, 04 July , 2005, 11:40

Mumbai: The Centre may withdraw the cess on the cash withdrawal in the
cooperative banking sector, considering difficulties being faced by
small traders, tiny industries and farming communities.

Indicating this, Maharashtra Chamber of Commerce, Industry and
Agriculture President Ekanath Thakur, MP, said that the Union
Agriculture Minister Sharad Pawar, a pioneer in the cooperative
movement, had initiated a dialogue with Finance Minister P Chidambaran
who agreed to consider the plea of the Cooperative sector to revoke
the cash withdrawal tax.

In its last budget presentation, the Finance Minister proposed to
impose a cess on Rs 10,000 and above cash withdrawals from commercial
banks including cooperative banks, sparking severe resentment among
the banking and industrial fraternity. Later, the amount was hiked to
Rs 25,000.

In the cooperative sector, the inter-bank transfer of cash attracted
the tax on withdrawal amount. The issue was taken up with Reserve
Bank, which is reviewing the situation arising out of such taxes,
Thakur said.

To highlight the problems of the cooperative sector, Thukur said, the
Maharashtra Chamber in association with Maharashtra Urban Cooperative
Banks Federation is holding a daylong national conference on July 8,
which will be inaugurated by Haryana Governor A R Kidwai.