(MENAFN- KNN India) Bangalore, Feb 3 (KNN)
The South India Garment Association (SIGA) has raised concerns over a recent payment rule for Micro, Small and Medium Enterprises (MSMEs), labeling it as detrimental to the garment industry's growth.
Representing numerous textile units nationwide, SIGA penned a letter to Prime Minister Narendra Modi, urging to repeal the newly introduced law, specifically Income Tax Act Clause 43B(H).
This clause, found in Section 43B of the Income Tax Act, specifies that payments to micro or small enterprises, beyond the time limit defined in Section 15 of the MSMEs Development Act, 2006, will only be allowed in the preceding fiscal year when the actual payment is made.
The clause mandates payments to micro and small manufacturers and traders within 15 to 45 days for goods purchased from them before March 31, 2024.
Failure to meet this deadline results in the outstanding sum being treated as income and subject to taxation.
SIGA expressed apprehensions, stating that many clothing companies will face challenges due to the adoption of this new rule, given that clothing stores and dealers typically receive payments after a 90-day period.
SIGA President Anurag Singhla emphasised,“It will be a big blow to the garment industry, which is already in trouble due to competition from corporate companies. I appeal to the Prime Minister to repeal the new rule in the interest of the garment industry that provides jobs to lakhs of people.”
Former SIGA President Kundan Jain appealed to the Government to refrain from enforcing the new rule, citing concerns among clothing suppliers regarding potential cancellations of orders by retailers.
(KNN Bureau)
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