Textile manufacturers, textile shops, traders and powerloom weavers in the districts of Erode, Salem and Namakkal shut their business for a day on Wednesday, February 28, 2924, opposing the recent amendment to Section 43B(h) of the Income Tax Act that reportedly affects payment for goods supplied by Micro, Medium and Small Enterprises (MSMEs).
According to the weavers, the section was introduced in the Finance Act 2023 to ensure payment towards goods supplied by MSMEs within 45 days. If the buyer fails to pay these dues, the outstanding amount will be disallowed as an expenditure. Urging the Central government to withdraw the amendment, the Erode Cloth Merchants Association called for one-day strike on Wednesday. As many as 20 textile-related associations, powerloom weavers in Erode, Chennimalai, Tiruchengodu and Vennandur, as well as textile manufacturers and sellers in Edappadi, along woth Gani Market traders associations and sizing mill owners associations extended their support to the strike.
Textile associations have pointed out that some corporate buyers who source fabrics from weavers make payments only twice a year. These buyers may now move to larger suppliers and may not be willing to buy from micro and small-scale weavers, thereby impacting business.
Over 50,000 powerlooms stopped production while 4,200 textile shops downed shutters urging the government to implement the amendment after a year as it affected their business directly.
Most of the streets in Erode city where textile shops are located including Kongalamman Kovil Street, Ramasamy Street, NMS Compound and Eswaran Kovil Street, wore a deserted look due to the closure. Daily wage earners, loadmen, vehicle drivers, bullock cart owners were also affected due to the strike.
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