Clothing Manufacturers Red Flag MSME Payment Amendment

(MENAFN- KNN India) New Delhi, Feb 7 (KNN) The Clothing Manufacturers Association of India (CMAI) expressed apprehensions regarding adverse impact of the MSME Payment amendment to the Income Tax under Section 43 (b) (h) on the domestic garment industry.

According to a press release issued on Tuesday, Rajesh Masand, President of CMAI, highlighted emerging challenges such as order cancellations from retailers, causing significant concerns within the industry, reported ET.

He stated,“Issues such as the cancellation of orders from retailers have started to emerge, raising concerns within the industry."

To address these issues and propose solutions, CMAI has submitted recommendations to Finance and Corporate Affairs Minister Nirmala Sitharaman, urging the postponement of the immediate implementation of the amendment.

Among the suggestions is the introduction of a mandatory reduction in credit period over three years: a maximum of 90 days by March 31, 2025; a maximum of 60 days by March 31, 2026; and a maximum of 45 days by March 31, 2027.

Furthermore, CMAI has recommended exempting payments from one MSME member to another MSME member from the purview of this amendment.

Additionally, it proposed restructuring the credit structure, reducing the period from 90 to 120 days to 45 days, aiming to enhance efficiency and financial stability while safeguarding small units from closure.

CMAI emphasised that genuine and reliable buyers, with positive intentions, may gradually adapt their business models to the shortened credit period, fostering a more transparent and compliant business environment under Section 43(B)(h).

The association mentioned, "Genuine and reliable buyers, with positive intentions, may gradually adapt their business models to the shortened credit period, fostering a more transparent and compliant business environment under Section 43(B)(h)."

(KNN Bureau)

MENAFN07022024000155011030ID1107823967