Following the implementation of Section 43B(H) of the Income Tax Act, traders in Ahmedabad are preparing to adopt new payment criteria, which is a big move for the textile industry.

Due to this modification, traders have collectively decided to shorten credit durations. Rather than extending the 180-day window, most have agreed to cap the payment cycle at 100 days.

But there are certain difficulties with the move. A lot of traders worry about how hard it will be to implement the 45-day payment cycle that the government recommends right away. The industry has chosen a staged approach as a compromise, with the 100-day limit as the first step.

Textile traders are planning a rally on Thursday to draw attention to these new laws. With participation from important trade associations like the Shirting Association, Panchkuwa Kapad Market Mahajan, Sindhi Kapad Market Mahajan, Maskati Kapad Market Mahajan, and Gujarat Garment Manufacturers’ Association (GGMA), the procession will wind through fifteen of the city’s major textile markets.

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 sector is also implementing extra security measures to prevent fraud. According to Maskati Mahajan secretary Naresh Sharma, traders are urged to deal only with registered brokers.