Small exporters, represented by the Ludhiana-based Hand Tools Association President S C Ralhan, are calling on the government to prolong the amnesty scheme that allows for a one-time settlement of default in export obligation. Ralhan highlighted that numerous small exporters have faced difficulties in meeting their obligations, particularly in making timely payments to MSMEs within the 45-day period stipulated by the Income Tax Act, leading to them being unable to apply for the scheme.
The Income Tax Act, under Section 43B(h), imposes stringent regulations on larger companies, especially concerning their payments to MSMEs. If a company fails to pay an MSME on time, it cannot deduct that expense from its taxable income, potentially resulting in higher taxes for the company. As a consequence of these provisions, small exporters have faced constraints in allocating funds to make these payments, preventing them from participating in the amnesty scheme designed to alleviate their default situations. Ralhan emphasized the urgent need for the government to extend the scheme until September to accommodate small exporters in rectifying their export obligations.