Gujarat Textile Traders Set 100-Day Payment Limit Amid New Tax Regulations
By 2024-07-20 11:11:28
Gujarat Textile Traders Set 100-Day Payment Limit Amid New Tax Regulations
In a significant shift for the textile industry, traders in Gujarat are gearing up to implement new payment norms following the introduction of Section 43B(H) of the Income Tax Act. This change has prompted a collective move to reduce credit periods, with most traders agreeing to cap the payment cycle at 100 days, down from the previous 180-day window.
The transition, however, is not without its challenges. Many traders express concern over the difficulty of immediately adopting the government-suggested 45-day payment cycle. As a compromise, the industry has opted for a phased approach, starting with the 100-day limit.
Gaurang Bhagat, president of Maskati Kapad Market Mahajan, highlighted the rationale behind this move: "We've witnessed an uptick in fraud cases within the textile sector over recent years. The extended payment cycle of up to 180 days has been a significant factor in these fraudulent activities. By reducing the credit period to under 100 days, we aim to mitigate this risk."*
The industry is also taking additional steps to safeguard against fraud. Naresh Sharma, secretary of the Maskati Mahajan, revealed that traders have been advised to work exclusively with registered brokers. "This measure will allow us to provide assistance in case of defaults," Sharma explained. He added that traders have been encouraged to ensure their brokers are properly registered.
This proactive approach by the textile trading community demonstrates a commitment to adapting to regulatory changes while simultaneously addressing long-standing issues within the industry. As the sector navigates these new norms, the impact on business operations and fraud prevention will be closely watched by industry observers and policymakers alike.
