City-based industrial organisations have challenged the implementation of section 43-B of the Income Tax Act in the Supreme Court, seeking that it be deferred for at least one year.
According to the industrialists, several sectors have been affected by the new payment rule for micro, small and medium enterprises (MSMEs). The Centre, they said, should consider allowing buyers to make payments until the filing of returns, in line with other clauses of Section 43B of the Income Tax Act. As a result, many buyers may choose to purchase goods from larger industries to circumvent the compulsory 45-day payment requirement.
Charanjit Vishwakarma, chairperson, United Cycle and Parts Manufacturers Association, one of the petitioners, said the sudden implementation of this amendment poses significant challenges, particularly in the micro and small-scale sector. “While the amendment covers dues owed to micro and small enterprises, it neglects to address similar obligations towards medium scale industries. This, he asserts, creates an imbalance in the competitive landscape,” he added.
Federation of Industrial and Commercial Organization (FICO) president Gurmeet Singh Kular said according to the notification, “The amendment took effect from April 1 and will accordingly apply in relation to the assessment year 2024-25 and subsequent assessment years which is contradictory in itself,”, he said, adding that the payment system cannot be transformed overnight.
FICO senior vice-president Manjinder Singh Sachdeva suggested including every income tax assessee including manufacturer, trader and exporter to cover under the act.
FICO agricultural implements division head Gagnish Singh Khurana said there should be rationalisation of the payment period with minimum of 15 to 30 days and a maximum of 45 to 90 days.
Source: Hindustan Times
Share this content: