Section 43B (h) of the Income Tax Act introduces a significant change regarding deduction allowances specifically related to payments made to Micro and Small Enterprises (MSEs). This section underscores the importance of timely payments to MSMEs, fostering a conducive business environment. It promotes: · Financial stability · Transparency · Compliance while benefiting both MSMEs and larger enterprises.
Time Limit for Payment: o Business enterprises are required to pay MSMEs within 45 days, as per section 15 of the MSMED Act, 2006, depending on the presence of a written agreement. o In the absence of a written agreement, payment should be made within 15 days. If there is a written agreement, payment shall be made as per the agreed-upon timeline, not exceeding 45 days.
Applicability: o This clause applies when an enterprise is buying goods or taking services from an enterprise registered under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. o Notably, the registration of the buyer under the MSMED Act is not mandatory. o Clause (h) of Section 43B comes into effect from April 1, 2024.
The Importer Exporter Code, commonly known as IEC, is a 10-digit identification number issued by the Directorate General of Foreign Trade (DGFT), a body under the Ministry of Commerce and Industry in India. This code is mandatory for any business or individual engaged in the import and export of goods and services.
Circumstances where IEC is required
The customs administrators require it when an importer has to clear his cargo via customs.
The bank requires the funds when an importer transfers money overseas through banks.
The customs port needs it when an exporter has to dispatch his cargo.
When an exporter gets foreign currency payments straight into his bank account, the bank demands it.
Entities that can file for an IEC
Individuals:
Businesses and Companies
Manufacturers, Traders, and Service Providers
Proprietorship Firms
Partnership Firms
Limited Liability Partnerships (LLPs)
Societies and Trusts
Eligibility Criteria
Regardless of the size of the firm, every registrant dealing with the import or export of commodities should register with IEC.
Importing or exporting goods for personal use is not subject to the IEC Registration Process since they are unrelated to commerce, manufacturing, or agriculture.
Applying for IEC does not necessitate starting a business.
Key Benefits of IEC Registration:
Global Expansion: IEC opens the doors to international markets, allowing businesses to explore new opportunities and establish a global footprint.
Legitimacy and Recognition: Holding an IEC provides a sense of legitimacy to your business. It enhances credibility and fosters trust among international partners and customers.
Government Benefits: IEC registration makes businesses eligible for various government schemes, incentives, and benefits aimed at promoting international trade.
Lifetime Validity: The IE Code registration is good for as long as the company is in operation. As a result, updating, submitting, & renewing Import Export Code registration are all without problems. The IEC registration is valid as long as the business is active or as long as it isn’t cancelled or given up.
In India, the Directorate General of Foreign Trade (DGFT) is the authority responsible for issuing IECs. The registration process typically involves the following steps:
Steps to Obtain IEC Registration:
Step 1. Visit the DGFT Website:
Start by visiting the official website of the Directorate General of Foreign Trade (DGFT). Locate the IEC section to begin the application process.
Step 2. Create an Account:
Register on the DGFT portal by providing necessary details. Once registered, you can log in to access the IEC application form.
Step 3. Complete the Application Form:
Fill in the required information accurately, including details about the business, its partners or directors, and the nature of goods or services involved in international trade.
Step 4. Attach Documents:
Upload the necessary documents, such as PAN card, address proof, and bank details. Ensure all documents are clear and comply with the specified guidelines.
Step 5. Payment of Fees:
Pay the applicable fees for IEC registration. The payment can be made online through the portal.
Step 6. IEC Issuance:
Once the application is submitted and verified, the DGFT will issue the IEC within a reasonable timeframe.
Conclusion:
IEC registration is a pivotal step for businesses aspiring to engage in international trade. By obtaining this code, companies can unlock a world of opportunities, strengthen their market presence, and contribute to the growth of the global economy. Navigating the IEC registration process may seem daunting, but with the right guidance and understanding, businesses can seamlessly integrate into the international trade landscape and embark on a journey of success.
