Merchant Bodies File Petition Against IT Amendment In Apex Court

ENA MSME 2024-04-30 15:04:00 New Delhi, Apr 30 (KNN) Three prominent trade associations have approached the Supreme Court challenging a recent amendment to the Income Tax Act that impacts payments made to micro and small enterprises (MSMEs). The Federation of All India Vyapar Mandal, Federation of Madras Merchants and Manufacturers Association, and Confederation of West Bengal Trade Associations filed petitions on April 27, seeking an interim stay and eventual quashing of the contentious provision introduced through the Finance Act 2023. The petitions take issue with the amendment that requires companies to wait an entire fiscal year for tax deductions if they fail to make payments to MSMEs within the stipulated time frame under the MSMED Act, 2006. This provision came into force from April 1, 2024, for the assessment year 2024-25. While the Finance Ministry has repeatedly asserted that the amendment aims to ensure timely payments to small businesses and support their operations, the trade bodies have vehemently opposed the move. The petitioners argue that the amendment, introduced as a new clause (h) in Section 43B of the Income Tax Act, amounts to 'colourable legislation' and violates their fundamental right to conduct business under Article 19(1)(g) of the Constitution. Their contention is that while the existing clauses (a) to (g) of Section 43B regulate governmental or industrial institutions, the new clause (h) impinges on private businesses by dictating payment terms for transactions with MSMEs. The trade bodies maintain that the clause infringes upon the right of MSMEs to grant credit beyond 45 days to buyers, as per their business practices. (KNN Bureau) 37605 https://knnindia.co.in/news/newsdetails/msme/merchant-bodies-file-petition-against-it-amendment-in-apex-court 2024-04-30 15:04:00 knnindia.co.in Merchant Bodies File Petition Against IT Amendment In Apex Court