New Delhi, Mar 11 (KNN) The Indian government's proposed amendment under Section 43B of the Income Tax Act has garnered positive responses from industry leaders. 

The act which originally was scheduled to take affect from April 1 has currently been halted.

According to Federation of Indian Micro and Small & Medium Enterprises (FISME) the IT amendment under section 43B which was proposed by Finance Minister will have a long term  positive impact on the business practices in India in general and on MSMEs in particular. 

“The amendment brings in a finality to the delaying practice as at the end of financial year unpaid amount to MSMEs will be treated as income and taxed accordingly”, says Anil Bhardwaj, Secretary General of FISME.

FISME has debunked rumours that the amendment will adversely impact MSME buyers and has stressed the need for MSMEs to learn ways to comply the law.    

Ravi Sood, President of the Badli Industrial Estate Association, expressed optimism regarding the amendment, highlighting its potential to expedite the recovery of dues for MSMEs.

The proposed amendment seeks to shift the focus of deductions under the Income Tax Act from the accrual basis to actual payment, aligning with the time constraints specified in Section 15 of the MSME Act. 

According to these stipulations, a payment window of 45 days is allotted for contractual agreements and 15 days for non-contractual transactions, with the implementation scheduled to commence from April 1, 2024.

Sood underscored the significance of this amendment, emphasising the importance of financial discipline for the growth of industries and the overall development of the nation. 

"The new income tax rule on payments to MSMEs within 45 days has been introduced by the government to facilitate the faster recovery of dues," stated Mr. Sood. "I strongly feel that financial discipline is the need of the hour and is much needed for industry at large to flourish and our country to develop at a faster pace."

Acknowledging potential initial challenges, Sood drew parallels with previous transformative measures such as the introduction of Compressed Natural Gas (CNG) in Delhi and the implementation of the Goods and Services Tax (GST). 

"There may be a period of discomfort or disruption initially, as witnessed during the introduction of CNG and GST. However, once things settle down, everyone will feel the benefit of this decision," he remarked.

Sood urged stakeholders to embrace the government's decision, emphasising its long-term benefits for both industries and the MSME sector. 

"We should welcome this decision instead of opposing it, as it ultimately serves the welfare of all stakeholders," he concluded.

The industry's positive reception of the proposed amendment reflects a collective sentiment of optimism regarding its potential to streamline financial operations and bolster the MSME sector's resilience in the face of economic challenges. 

(KNN Bureau)