Ahmedabad, Feb 13 (KNN) Medium-scale industries are advocating for their inclusion in the timely payment rule outlined for Micro and Small Enterprises (MSEs).

While MSEs are seeking a delay in the enforcement of section 43B(H) of the Income Tax Act, stipulating 45-day payments for goods and services provided by MSEs, medium-scale industries argue that they should also benefit from this provision, reported TOI.

These medium-scale enterprises highlight the disparity they face, as they are required to settle payments to MSE suppliers within 45 days but often experience delays in receiving payments from their buyers.

Under section 43B(H), the central government has mandated buyers to make timely payments (within 45-days) to MSEs, with non-compliance resulting in the inclusion of the purchase amount in the buyer's income.

This directive has raised concerns among traders, particularly in the textile sector, where payment cycles typically extend to 120 days.

Defined as units with investments in plant and machinery up to Rs 50 crore and turnover up to Rs 250 crore, medium enterprises are lobbying to be recognised as beneficiaries under section 43B(H).

Sachin Patel, Former Secretary, Gujarat Chamber of Commerce and Industry (GCCI), emphasised the need for a level playing field, stating that while the rule benefits MSEs, it creates challenges for medium-scale units, which also rely on timely payments but may not receive them within the stipulated timeframe.

The textile industry, heavily impacted by this new rule, sees medium-sized units echoing the demand for its extension.

P R Kankariya, director of a mid-sized textile processing company, underscores the industry's prolonged payment cycles and urges the government to maintain uniform payment terms for all stakeholders.

(KNN Bureau)