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Traders fear avalanche of non-payments

If they deposit their black money in their bank accounts, it will invite ire of the income tax department

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The government’s demonetisation drive has made the trading community a worried lot who fear that traders they deal with may go bust, resulting in non-payment that will severely affect their businesses.

“There are merchants who have been doing business partially in cash; the percentage varies from 10% to 60%. Here is where the problem begins. With new regulations relating to Rs 500, Rs 1,000 notes being introduced, payments will immediately get stuck,” said a trader.

If they deposit their black money in their bank accounts, it will invite ire of the income tax department. Otherwise, they will have to diminish their wealth through other means, or go bust.

“Within the industry, there are retail traders who make payments in cash. Now, there will definitely be a delay in payments as cash is in shortage. The other option is to make payments through cheque,” said Ashok Jain from Bombay Sugar Merchants Association.

Similarly, Ravi Shinde from All India Petrol Pump Association said, “As per the government directive, we are accepting payments in cash irrespective of denomination of the currency, but till November 11 midnight. We have been asked to deposit such cash collections during the first half on November 12.”

As petrol pump dealers give credit to individuals, and accept payment in cash, business may get affected here too.

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