Businessman move to court against MSME Payment rule 43B(h) of Income Tax

The city’s businessmen have resolved to take legal action against the implementation of Section 43B of the Income Tax Act. The traders, led by the Punjab Dyers’ Association, want to file a case in the Punjab and Haryana High Court challenging the modification.

Micro and Small Enterprises (MSE) of the city are apprehensive about the consequences of the implementation of the new income tax rules and fear that it will lead to monetary loss.

They expressed concern that buyers and dealers would stop buying from them and instead go to medium and large businesses because the part did not apply to them.

The central government recently made it essential for buyers to remit payment within 45 days of purchasing items from micro and small enterprises (MSEs) by enacting Section 43B of the Income Tax Act, 1961, through the Finance Act 2023. The rule only applies to manufactured MSEs.

If the amount is not paid, it will be regarded as the buyer’s profit; however, it will be counted when calculating their income tax, according to the businessmen.

Bobby Jindal, secretary of the Punjab Dyers’ Association, stated that while the government claimed that Section 43B was created to assist MSEs, it is not doing so. He claimed that the government modified the IT Act to profit from the pockets of manufacturers.

“If the government wanted to aid MSEs, it should have included provisions for granting interest to manufacturers in the event of late payments. However, it has made plans for its own money, which would be generated through income tax,” stated Jindal.

Rajesh Bansal, a member of the association, stated that the sector had no choice but to approach the High Court.

“Although the model code of conduct has gone into effect, the government has the ability to revoke it. The income tax authorities will review buyers’ balance sheets before March 31. As a result, we are planning to file a petition in the Punjab and Haryana courts next week,” he stated.