Include medium enterprises in Sec 43B(h): GCCI

Ahmedabad: Ahead of union budget, the Gujarat Chamber of Commerce and Industry (GCCI) has demanded that medium enterprises and the services sector be included in Section 43B(h) of the Income Tax Act, which mandates payment to the supplier within 45 days of delivery. GCCI has also demanded a reduction in tax rates for various categories of companies.
A pre-budget meeting for the 2024-25 fiscal year was convened in New Delhi on Tuesday with representatives from trade, industry and services.The meeting, chaired by finance minister Nirmala Sitharaman, aimed to solicit ideas and suggestions for the 2024-25 Union Budget. Sandeep Engineer, senior vice president, GCCI, presented a memorandum outlining several tax-related issues and suggestions specifically aimed at benefiting micro, small and medium enterprises (MSMEs). He highlighted the urgent need to include medium enterprises and service sector industries in Section 43B(H) saying this will enhance liquidity and operational efficiency.
Additionally, he sought substantial reductions in tax rates for non-corporate entities, including Limited Liability Partnerships (LLPs) and Association of Persons (AOPs), to 25%, and for individuals to a maximum of 30%, inclusive of surcharge and cess. Such measures would stimulate growth and investment in these vital sectors of the economy, he said. He also suggested exemption under Section 194C for labourers and small businesses from the higher rate of 20% tax deducted at source (TDS) in cases where Aadhaar and PAN linkage is not possible. This exemption aims to alleviate financial burdens, ensure continuity in operations and prevent administrative and legal complexities for small businesses and contractors.
He also suggested revising the definition of medium enterprises and the investment threshold for plant, machinery, or equipment to Rs 25 crore from the current Rs 50 crore.