Finance Bill, 2023Business Disallowance Payment to Micro or Small Governed by Section 43B Qua Finance Bill 2023

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The Tax Publishers Finance Bill, 2023--Business Disallowance Payment to Micro or Small Governed by Section 43B Qua Finance Bill 2023 Sameer Bhatia The Finance Bill 2023 as introduced in the parliament intrinsically deals with a number of amendments pertaining to various provisions of the Income Tax Act, 1961 in force. One such amendment was in respect of payments made to units classified as Micro or Small Enterprises by taking into account the inference validly drawn from the provision already embedded in the MSMED Act, 2006. The learned author meticulously dealt with myriad aspects touching upon the proposed amendment of the provision enshrined in Section 43B vis-a-vis Section 15 of the MSMED Act, 2006 apart from trailblazing the constitutional perspective of the provision as it withstood the relevant pace of time ever since it was inserted by the Finance Act, 1983. The lawmakers with the ultimate aim to foster timely release of payments to the Micro or small units under the MSMED Act, 2006 and to further harmonize, align and integrate the boundless flow of transactions taking place on a daily basis between Micro, Small & Medium enterprises registered under the Act came out with a revised classification applicable with effect from 01st July, 2020 duly taken note thereof in the said piece of writing by the legal luminary. 1. Introduction Finance Bill 2023 as introduced in the parliament intrinsically deals with a number of amendments pertaining to various provisions of the Income Tax Act, 1961 in force. Every budget prospectively witnesses myriad amendments to scale down the impact of various judicial precedents in force or with a view to envelop the burden of taxes on masses at large. One such amendment which was inserted was with respect to payments made to units classified as Micro or Small enterprises by taking into account the inference validly drawn from the provision already embedded in the MSMED Act, 2006 (i.e. Act No.27 of 2006 notified by the official gazette vide Notification dated 16th June, 2006). Due reference has since been imported from the provision of Section 15 of the MSMED Act, 2006 so as to enable timely discharge of payments due to the seller by the buyer concerned. This is not perhaps for the first time that due reference has been made to an alien enactment whose provision is inherently borrowed to streamline the working of a provision associated with enforcement of a direct tax popularly called the Income Tax Act, 1961 i.e. Section 43B of the Income Tax Act, 1961 vis--vis Section 15 of the MSMED Act, 2006. 2. Time stipulated to make good the payment under Section 43B SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Finance Bill, 2023--Business Disallowance

Payment to Micro or Small Governed by Section 43B Qua Finance Bill 2023

Sameer Bhatia

The Finance Bill 2023 as introduced in the parliament intrinsically deals with a number of amendments pertaining to various provisions of the Income Tax Act, 1961 in force. One such amendment was in respect of payments made to units classified as Micro or Small Enterprises by taking into account the inference validly drawn from the provision already embedded in the MSMED Act, 2006. The learned author meticulously dealt with myriad aspects touching upon the proposed amendment of the provision enshrined in Section 43B vis-a-vis Section 15 of the MSMED Act, 2006 apart from trailblazing the constitutional perspective of the provision as it withstood the relevant pace of time ever since it was inserted by the Finance Act, 1983. The lawmakers with the ultimate aim to foster timely release of payments to the Micro or small units under the MSMED Act, 2006 and to further harmonize, align and integrate the boundless flow of transactions taking place on a daily basis between Micro, Small & Medium enterprises registered under the Act came out with a revised classification applicable with effect from 01st July, 2020 duly taken note thereof in the said piece of writing by the legal luminary.

1. Introduction

Finance Bill 2023 as introduced in the parliament intrinsically deals with a number of amendments pertaining to various provisions of the Income Tax Act, 1961 in force. Every budget prospectively witnesses myriad amendments to scale down the impact of various judicial precedents in force or with a view to envelop the burden of taxes on masses at large. One such amendment which was inserted was with respect to payments made to units classified as Micro or Small enterprises by taking into account the inference validly drawn from the provision already embedded in the MSMED Act, 2006 (i.e. Act No.27 of 2006 notified by the official gazette vide Notification dated 16th June, 2006). Due reference has since been imported from the provision of Section 15 of the MSMED Act, 2006 so as to enable timely discharge of payments due to the seller by the buyer concerned. This is not perhaps for the first time that due reference has been made to an alien enactment whose provision is inherently borrowed to streamline the working of a provision associated with enforcement of a direct tax popularly called the Income Tax Act, 1961 i.e. Section 43B of the Income Tax Act, 1961 vis--vis Section 15 of the MSMED Act, 2006.

2. Time stipulated to make good the payment under Section 43B