Quick Summary
The revised Section 43B of the Income-tax Act, 1961, introduced in the Union Budget last year, has been widely endorsed by MSME associations across India, said Pankaj Chaudhary, Minister of State for Finance, in the Lok Sabha on Monday. The revision aims to address the chronic issue of delayed payments faced by micro and small enterprises (MSEs), which often jeopardize their cash flow and business sustainability. Pankaj Chaudhary highlighted thatClause (h) was added to Section 43B in April 2023
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FAQ :
The revised Section 43B of the Income-tax Act mandates that payments to Micro and Small Enterprises (MSEs) must be made within 45 days. Payments overdue beyond this period will only be tax-deductible for the buyer upon actual payment.
The policy aims to address the chronic issue of delayed payments faced by MSEs, which often jeopardise their cash flow and business sustainability, thereby ensuring their financial stability.
Companies delaying payments to MSEs beyond 45 days are now required to submit half-yearly returns to the Ministry of Corporate Affairs, detailing the dues and reasons for the delays.
TReDS is a platform operated by the RBI that facilitates the discounting of trade receivables, offering MSEs quicker access to funds. Businesses with a turnover exceeding ₹250 crore and all Central Public Sector Enterprises (CPSEs) are now mandatorily required to onboard it.
Yes, Micro and Small Enterprises Facilitation Councils (MSEFCs) have been established across states to address delayed payment grievances. The Samadhaan portal also tracks and helps resolve such cases.
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