After the farmers, this time the industrialists can come out on the streets. The protest by traders and industrialists is against the central government’s laws. In fact, the central government had amended Section 43B of the Income Tax Act last year. Industrialists and businessmen are angry over this.
Section 43B(H), as claimed, is not just for industrialists or traders. This is also bad news for MMME traders.
Section 43B of the Income Tax Act, 1961 states that certain expenses arising out of business will be allowed only if they are paid within a period of time. This includes expenses such as taxes, fees, interest, bonuses, commissions, etc.
Let’s say if you have made a payment in the product in 2023-24. Then you can save tax by claiming them in the assessment year 2024-25.
Last year, the central government had added 43B(H). This section is applicable to medium, small enterprises (MSMEs). This section says that those who come to MSMEs will have to make the payment within 45 days.
The MSME supplier will be registered on the Enterprise Portal of the Central Government and will be treated as a manufacturer or service provider.
For example, if an MSME supplier bought goods on May 1, 2023, but he has not paid till March 31, 2024. Then this money will also be taxed.
This will have an impact on both buyer-seller as per the demand. MSMEs will not get orders if they do so. And if one cannot pay within 45 days, it will be considered as income on which tax has to be paid.
It is to be noted that the Lok Sabha elections are round the corner. The election date is likely to be announced in a few days. It could be unfortunate for the ruling party if there are protests like this.
The central government has already held several meetings with the farmers but a solution has not been found. So, before the upcoming elections, how the ruling party can douse the fire of the farmers’ anger will be remarkable.
It is expected that the central government can accept the demands of the farmers. Time will tell us how the government will fulfill the hopes of farmers and industrialists.