Quick Summary
In a recent development, the Supreme Court (SC) has declined to entertain a plea filed by Micro and Small Enterprises (MSEs) challenging the 45-day payment rule stipulated in Section 43B(h) of the Income Tax Act. Instead, the apex court directed the MSEs to seek redressal from the High Court (HC), m
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FAQ :
The Supreme Court declined to entertain the plea filed by Micro and Small Enterprises challenging the 45-day payment rule and directed them to seek redressal from the High Court.
Section 43B(h) of the Income Tax Act regulates credit extension for Micro and Small Enterprises, prohibiting credit beyond 45 days and mandating timely payment settlement.
Buyers who default on payments within the 45-day period risk facing financial repercussions and potential limitations on deducting payments from their taxable income. They may also face compound interest penalties.
MSEs can impose penalties including compound interest at a rate three times the bank rate prescribed by the RBI for late payments.
Following the Supreme Court's decision, MSEs can now pursue their case further by approaching the High Court.
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