Hyderabad, January 8, 2018

Top seed firms such as Nuziveedu Seeds and Kaveri Seeds were in for a serious scrutiny by the Income Tax Department last week, with sleuths looking into claims made by them with regard to agricultural income that run into several hundred crores.

While confirming the IT raids, a source in the seed industry said the raids lasted for four days. “It is not the first time that the IT Department looked into such claims. But the depth of the investigation this time is unprecedented as they went down to a few layers in the supply chain,” he said.

Almost all seed firms depend on farmers to produce the seed well ahead of the crop season. They enter into formal and informal agreements with farmers through ‘organisers’. Some farmers act as organisers themselves, take the indent from the companies and rope in their peers to get the crops grown exclusively for seed production.

“They give us seed and other inputs and buyback the seed. They take the seed consignments to their plants for processing and packaging,” a farmer said.

In a good number of cases these agreements are informal, leaving no defence in times of poor production.

Some seed firms are reportedly using this practice for their benefit as there is no tax on agricultural income.

[The Hindu Business Line]