The Gujarat government has granted official approval to sugarcane prices paid by cooperative sugar societies to farmers between 2007-08 and 2014-15, a move expected to remove an estimated ₹1,500 crore financial burden on sugar cooperatives and benefit more than two lakh sugarcane farmers across the state.A truck loaded with sugarcane in Gujarat. The state government has approved sugarcane prices paid by cooperative sugar societies between 2007-08 and 2014-15, providing major relief to cooperatives and farmers.Announcing the decision on Monday, Agriculture and Cooperation Minister Jitubhai Vaghani said the move was taken under the leadership of Chief Minister Bhupendra Patel to safeguard the interests of the cooperative sector and sugarcane growers.Vaghani said cooperative sugar societies in Gujarat had historically paid farmers higher prices than the Fair and Remunerative Price (FRP) fixed by the Centre by sharing additional income generated through by-products such as molasses, ethanol and power generation.However, the Income Tax Department had treated payments made above the FRP as profit and issued tax demand notices to several cooperative sugar societies for the period between 2007-08 and 2014-15, creating a potential liability of nearly ₹1,500 crore.The Minister said the issue was addressed after the Union government amended provisions of the Income Tax Act in 2023 following the creation of a separate Ministry of Cooperation under Prime Minister Narendra Modi. The amendment introduced a legal provision recognising sugarcane prices approved by state governments for Income Tax purposes.Following the amendment, the Gujarat government constituted a high-level committee to examine the matter. Based on the committee’s recommendations, the state approved the prices paid by cooperative sugar societies during the disputed period.Vaghani thanked Prime Minister Narendra Modi, Union Cooperation Minister Amit Shah and Chief Minister Bhupendra Patel for the decision, saying it would strengthen Gujarat’s cooperative sector and further empower sugarcane farmers receiving direct payments through cooperative societies.