(MENAFN- KNN India) Chennai, Feb 13 (KNN) Retail and wholesale traders are urging for clear interpretation regarding the inclusion of their sector under the newly enacted Section 43(B)(h) of the Income Tax Act, 1961.
The Agro Food Chamber of Commerce and Industry presented a memorandum to the Tamil Nadu Finance Minister on Monday, urging the ministry to provide clarity on this matter.
S Rethinavelu, Founder and President, Agro Food Chamber of Commerce and Industry, highlighted the implications of the amended Section 43(B)(h) of the IT Act. He explained that failure to make payments to MSMEs within a 45-day timeframe renders the amount taxable income for the purchaser.
Rethinavelu underscored the importance of including retail and wholesale traders as MSMEs, citing the benefits of Section 43(B)(H) in supporting these sectors, particularly in the Agro Food Sector, which functions on the principle of low margin with high turnover, as it would shield them from potential disruptions in cash flow.
Despite this, conflicting interpretations from tax consultants suggest that the amended clause may only apply to MSMEs engaged in manufacturing or production, excluding traders. He emphasised the confusion among traders, exacerbated by the liquidity crunch caused by the Covid-19 lockdowns.
Rethinavelu advocated for extending the benefits of Section 43(B)(H) to retail and wholesale traders, given their vulnerability and the significant number (over 2.5 crore) traders affected.
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