Kerala Co-operation Minister G Sudhakaran today said the Centre's move to include primary co-operatives under the purview of the Income Tax Act would sound the death knell for co-operative sector in the state.

Replying to a calling attention motion by M M Monayee (CPI-M), he alleged that the Centre was trying to 'rob' the deposits in the co-operative societies in Kerala which now stood at Rs 68,000 crore.

"Those who should protect co-operatives are punishing them," he said and wanted the Centre to immediately withdraw the proposal.

As per the proposed amendments in the existing act, profit-making co-operatives would have to pay 30% income tax from April 2012.

The amendments also sought to change the provisions for enrolling members in co-operatives, which, if implemented would reduce to one-third the memberships in societies in the state, he said.

The minister said the amendments would largely affect Kerala where the sector was very strong and all political parties were opposed to the Centre's move.

If the Centre did not withdraw from the move, the state government would consider legislation to overcome the impending crisis in the sector, he said.