CAIT and CMAI petition to delay the MSME payment law for traders due to concerns over implementation clarity.
Industry bodies like the Confederation of All India Traders (CAIT) and the Clothing Manufacturers Association of India (CMAI) are urging the Centre to postpone the implementation of the MSME payment amendment in income tax. This amendment, according to 44(b)(h), stipulates that any payment to registered micro, small, or medium enterprises beyond 45 days of receiving goods or services will not be recognised as an expense and will be added to the company’s profit for taxation purposes. While the move aims to ensure timely payments to the MSME sector, industry representatives express concerns about the lack of clarity surrounding its applicability and related provisions. CAIT Secretary General Praveen Khadelwal acknowledges the government’s progressive move but calls for more time until sufficient clarification and information dissemination are achieved nationwide. CAIT proposes a one-year deferral period, advocating for postponing the implementation from April 1, 2024, to April 1, 2025. CMAI echoes similar sentiments, emphasising the challenges within the garment sector and urging the government to implement the norm over three years. They highlight the unique intricacies of the garment industry’s payment cycle, which ranges from 90 to 120 days, leading to concerns about order cancellations and unsold merchandise returns by retailers. The industry urges adjustments and exemptions to address these challenges effectively.
Source: PIB Delhi
