According to sources in the textile industry, the Ministry of Finance was considering various options to provide relief to the industry and trade. Currently, the provision is set to come into effect from April 1, 2024, when the next assessment year, 2024-25, begins. However, the government can defer the rule for one year, meaning it would come into effect from April 1, 2025. However, there has been no official announcement yet on the matter.
Last month, Finance Minister Nirmala Sitharaman assured trade organisations of a solution to the issue. Representatives of several trade and industry organisations had met with minister Sitharaman to demand a postponement of the provision.
The provision was made in The Finance Act 2023, which came into effect from fiscal 2023-24. Therefore, buyers will have to face the heat in the coming assessment year, 2024-25.
As per the provision, buyers will have to make payment within 45 days at maximum to sellers who are registered as micro or small enterprises as per the MSMD Act. The 45-day period began on 16 February 2024 for the current fiscal 2023-24, which restricted buyers from placing any orders with micro and small enterprises. Such restrictions have led to unease in trade and industry in the country. Economic activities slowed down in the last 45 days of the fiscal, which remains crucial for achieving maximum business in a particular fiscal.
ALCHEMPro News Desk (KUL)
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