Warring Meets Sitharaman; Seeks Deferring Of Section 43-b

Jul2,2024 | Gautam Jalandhari | New Delhi/ludhiana

SUGGESTS, THE NEW LAW BE IMPLEMENTED IN PHASED MANNER

Punjab Congress President and Ludhiana MP Amarinder Singh Raja Warring has urged the Union Finance Minister Ms Nirmala Sitharaman to defer the implementation of Section 43 B of the Finance Act 2023, which pertains to the payments to micro and small vendors registered as MSME. Warring met Ms Sitharaman in Delhi and submitted a memorandum to her in this regard.

According to this amendment, if payments to small and micro vendors are not made within the period specified under Section 15 of the MSMED Act, 2006, the expenses will not be allowed as a deduction under Income Tax laws. This has hit the MSME sector very hard and strained their financial capacities.

He said, given the current dynamics of the MSME sector, which is extremely fragmented and largely informal, there is heavy reliance on intra-sector credit support. He said, the sector does not extensively benefit from credit facilities provided by formal banking channels and the typical credit period within the industry ranges from 90 to 120 days, often extending up to 180 days.

Warring said this situation is particularly prevalent in Ludhiana, the constituency he represents, where the businesses rely heavily on flexible credit terms to maintain their operations and manage cash flow effectively.

The PCC President urged the Union Finance Minister to consider extending the time limit for receiving payments from buyers to a maximum period of 90 days by March 31, 2025 and 60 days by March 31, 2026 before finally reducing it to 45 days by March 31, 2027.

He observed that this phased approach will provide ample time for entrepreneurs in Ludhiana as well as across India to adjust to and implement the new payment terms as per the revised Section 43B of the Financial Act 2023.

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