- Three heavyweight trade bodies, including the Federation of All India Vyapar Mandal, are taking on the government over a controversial Income Tax Act amendment.
- They've filed petitions demanding an interim halt and eventual reversal of the amendment.
- Petitions were submitted on April 27, eagerly awaiting their day in court.
?? The Heart of the Matter:
- The amendment penalizes companies delaying payments to micro and small enterprises by postponing their tax deductions for an extra year.
- Effective since April 1, 2024, it aims to ensure timely payments to MSMEs, but not everyone's convinced.
- Trade bodies argue that the amendment infringes upon MSMEs' fundamental rights.
- They claim it distorts business expenditure rules and ignores RBI norms on transactions.
- Citing Section 15 of the MSMED Act 2006, they highlight persistent payment delays to MSMEs.
- Finance Minister Sitharaman's past budget announcement, linking deductions to actual payments, fuels their case.
?? Clarification and Criteria:
- The amendment applies to SMEs meeting specific investment and turnover thresholds.
- Micro-enterprises: plant machinery investments below ?1 crore and turnover under ?5 crore.
- Small enterprises: machinery investments below ?10 crore and turnover under ?50 crore.
?? Stay Tuned for Updates as the Battle Unfolds!
