ALSO READASSOCHAM makes plea to FM for relaxing cash withdrawals for industry LS passes Income Tax amendment bill amid din Rs.6 crore cash, 7kg gold haul in Bengaluru tax raids I-T Act amendment a 'win-win', to boost govt revenues: Experts Penalty under search,seizure to be up 3-fold at 30% in I-T Act
Besides, they can be subject to scrutiny by any authority including tax departments, it said.
"The withdrawal limit of Rs 50,000 per week from current account is very less for industry. Therefore, it needs to be enhanced and the industry should not be subject to any limit because cash withdrawn by industry is duly recorded, audited and scrutinised by the government authorities such as Income Tax Department," Assocham said in a letter to Finance Minister Arun Jaitley.
The industry lobby group has also requested the government to restructure bank loans repayment schedule for a large number of industries, especially the small scale sector, which has been hit hard by the ban on high value notes last month.
In such a situation the borrowers, particularly the private limited companies and MSME sector, would default in loan repayments/interest payments, it said.
"Under this state of affair, the industry would require rescheduling of payments of loans as well as additional financial support to meet the liquidity requirement without any penal action," Assocham said.
"Speedy distribution of cash is necessary so that people have confidence that sufficient cash is available in the system and there is no need of holding extra cash in hand."
Day-to-day expenses like maintenance and repair, staff welfare, consumable items, loading and unloading are done mainly on cash and mostly paid to people in unorganised sector who do not accept cheques, it said adding, till the economy largely converts into a cashless one, the industry will face problem on a daily basis.
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