Indian micro and small enterprises in the textile sector are apprehensive that they may lose business from large and medium companies due to Section 43B(h) of the Income Tax Act. The Indian Government had introduced an amendment to ensure timely payments to these micro and small businesses. However, small business enterprises are demanding the withdrawal of the new payment rule. Textile manufacturers, textile shops, traders, and power loom weavers from a few districts of Tamil Nadu observed a one-day strike on February 28 to press their demand.
Micro and small manufacturers and traders went on strike recently in the districts of Erode, Salem, and Namakkal. They opposed the recent amendment to Section 43B(h) of the Income Tax Act. According to the new payment rule, buyers will face the risk of disallowance of business expenditures during income tax assessments if they fail to make payments to registered micro and small businesses within a maximum of 45 days.
Textile associations stated that corporate buyers who source fabrics from weavers often make payments within six months. However, these buyers may cease buying from small businesses to avoid any tax implications and instead turn to larger suppliers. This could potentially harm the business prospects of small enterprises in the future.
The Erode Cloth Merchants Association, which called for the one-day strike, demanded that the Central Government withdraw the amendment. Dozens of textile manufacturers and traders’ organisations supported the strike. Thousands of micro and small businesses remained closed recently as they sought relaxations in the provision to continue receiving orders from corporate buyers.
Indian micro and small enterprises in the textile sector are apprehensive that they may lose business from large and medium companies due to Section 43B(h) of the Income Tax Act. The Indian Government had introduced an amendment to ensure timely payments to these micro and small businesses. However, small business enterprises are demanding the withdrawal of the new payment rule. Textile manufacturers, textile shops, traders, and power loom weavers from a few districts of Tamil Nadu observed a one-day strike on February 28 to press their demand.
