Key Points
A section of MSMEs worry that this may impact relations with suppliers and buyers, others say their systems are not ready for this provision..
Provision to come into effect from April 1, 2024 Finance Act 2023 inserted new clause (h) in section 43B of IT Act Move aimed at promoting timely payments to micro and small enterprises..
The finance ministry is looking into a proposal to tweak the new income tax rule under which business enterprises will be required to make payments to micro, small and medium enterprises (MSMEs) within 45 days...
A section of MSMEs, such as those in the textile industry, are worried that this new rule could impact their relations with suppliers and buyers, who often work with these small businesses on a credit system..
In order to promote timely payments to micro and small enterprises, the Finance Act 2023 inserted a new clause (h) in section 43B of the Income Tax Act to provide that any sum payable by the assessee to a micro or small enterprise beyond the specified time limit of 45 days in section 15 of the MSME Development Act 2006 will be allowed as deduction only on actual payment..
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