Pay MSME in 45 Days: Govt in no mood to defer MSME Payment Rule
The Ministry of Finance will impose a 45-day payment to the MSME Rule on all businesses applicable from 1st April 2024. As per this rule business are required to make payment to Micro and Medium enterprises within 45 Days. If they fail to make the payment within 45 Days, the deduction of Expense in Income Tax will be allowed on a payment basis.
Now, various businesses are demanding that this rule be repelled or deferred. Government officials have clarified that Finmin is not in a mood to Defer this Rule.
Problems faced by the taxpayers:
The government has indeed introduced this rule to help MSMEs who faced late payment issues from big players, cash crunch and tight margins. But there are many issues that need clarifications. For Example, we need clarifications whether traders are covered under definition of MSME for this rule.
Also, the country needs to be more aware of this provision, for which we need at least a year.
Another fear MSMEs are facing is that they may loose business because of this rule as most of the big business house have 60 Days Payment rule.
Any change possible only in July 2024, when Modi Government comes to power again after elections
The Government Officials have clarified that Ordinance Route is not possible as Parliament is not in session. For any change the Taxpayers have to wait till the government passes final budget after elections 2024.
