Quick Summary
Sources reveal that the Finance Ministry is contemplating a deferment of the enforcement of Rule 43B (h) under the Income Tax Act, which necessitates payments to micro, small, and medium enterprises (MSMEs) within 45 days. This potential postponement, expected to extend for a full financial year, aims to address industry concerns and provide businesses with additional time to adapt to the new regulatory framework. Background of Rule 43B (h) Enacted as part of the Finance Act of 2023, Rule
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FAQ :
Rule 43B (h) of the Income Tax Act mandates that payments to micro, small, and medium enterprises (MSMEs) must be made within 45 days. If payments are not made within this timeframe, the outstanding amounts are treated as income and become subject to taxation.
The Ministry is considering a delay due to concerns raised by various industry sectors. Businesses found the 45-day payment window challenging, impacting traditional practices and causing order cancellations.
The Finance Ministry is contemplating delaying the enforcement of the rule until April 2025, potentially for a full financial year.
Industry bodies submitted representations to the Finance Ministry, proposing adjustments to the act or a temporary postponement to help businesses transition more smoothly.
Yes, the Ministry of Micro, Small, and Medium Enterprises (MSME) has initiated consultations with SME groups to gather their feedback on the impact of Rule 43B (h).
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