Ludhiana MP Raja Warring meets Finance Minister Nirmala Sitharaman, seeks solution to tax law conundrum

Chandigarh, July 2

Punjab Congress president and Ludhiana MP Amrinder Singh Raja Warring has urged the Union Finance Minister Nirmala Sitharaman to defer the implementation of Section 43 B of the Finance Act, 2023, which pertains to the payments to micro and small vendors registered as MSME. Warring met the Finance Minister and submitted a memorandum to her in this regard.

According to this amendment, if payments to small and micro vendors are not made within the period specified under Section 15 of the MSMED Act, 2006, the expenses will not be allowed as a deduction under income tax laws. This has hit the MSME sector very hard and strained their financial capacities, Warring said.

Warring said that given the current dynamics of the MSME sector, which is extremely fragmented and informal, there is heavy reliance on intra-sector credit support. The sector does not extensively benefit from credit facilities provided by formal banking channels and the typical credit period within the industry ranges from 90 to 120 days, often extending up to 180 days, he added.

The MP said this situation is particularly prevalent in Ludhiana, where the businesses rely heavily on flexible credit terms to maintain their operations and manage cash flow effectively.