Beware of impact for delayed payment to MSMEs and its impact in Income Tax, GST and other laws

CA Umesh Sharma | Last updated: 15 February 2023

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New government provisions aim to boost the MSME sector by ensuring timely payments. Under Section 43B of the Income Tax Act, businesses can only deduct expenses paid to MSMEs if payment is made within the timelines set by the MSMED Act (typically 15-45 days). While GST law requires ITC reversal for payments delayed over 180 days, the Companies Act mandates disclosure of outstanding MSME payments. To benefit from these provisions, businesses must register as an MSME on the Udyam Registration portal.

Arjuna (Fictional Character): Krishna, there have been a lot of talks around about the new provision that the government has proposed to bring for boosting the MSME Sector. What is an MSME and who is responsible for its development of the same? Krishna (Fictional Character): Arjuna, MSME refers to Micro, Small and Medium Enterprises. Such classification of small-scale enterprises assists the government in the formulation and implementation of varied policies for the development of the MSME Se

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CA Umesh Sharma

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Name: - UMESH RAMNARAYAN SHARMA. Residential Address: - 16, Motisagar, Samarthnagar, Aurangabad. Ph :- 2332846. Mobile:9822079900. Head Office Address: - R.B.Sharma Co. Chartered Accountants. Block No 7-10, 2nd Floor, Shangri-La Complex, Samarth Nagar, Aurangabad. Ph :- 2332511,2338388. Email:- rbsha ... Read more

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