Indian govt mulls postponement of Section 43B(h) amid industry demands

The Indian government may postpone Section 43B(h) of the Income Tax Act 2013, amended for timely payment for micro and small enterprises, after demands for the same were raised by trade and industry organisations from across the country. Union finance minister Nirmala Sitharaman recently assured representatives of several trade and industry organisations that the new payment rule will be postponed.

The delegation that met last week was led by C R Patil, member of parliament from Navsari (Gujarat), and comprised office bearers of the Confederation of All India Traders (CAIT), Federation of Surat Textile Traders Association (FOSTTA), and a few other trade bodies.

Following the meeting with the finance minister, trade and industry organisations, primarily from Ahmedabad and Surat in Gujarat, promptly disseminated the assurance and message from the government to their members and the media. The Textile Association of Ahmedabad & Surat (TAAS) issued a press statement after the meeting last week to inform that the new provision may be postponed for one year, as assured by the finance minister.

However, TAAS clarified that the government has yet to issue an announcement in this matter. Therefore, traders and businessmen should make trade decisions cautiously.

Trading activities have been hindered to some extent since January 2024 due to the implementation of the new payment rule. The provision came into effect in the current fiscal 2023-24, which ends on March 31, 2024. Trading activities have slowed down across the country as buyers will not be able to make payments within the stipulated period under the provision within the current fiscal. Trade and industry organisations have also demanded to implement the rule in a phased manner so that traders can follow the new provision without disrupting their business.