New Delhi:
The new financial year, which started on April 1, 2024, has brought many changes in different areas. One significant change affects Micro, Small, and Medium Enterprises (MSMEs).
From now on, MSMEs will receive payments within 45 days.
If a company fails to pay within this time frame, the unpaid amount will be considered as part of its income and taxed accordingly.
This change aims to help MSMEs manage their finances better.
A 30 percent tax will be applied to unpaid amounts.
Additionally, if a large company doesn’t fulfill its payment obligations to an MSME within the agreed 45 days, it cannot deduct that amount from its income.
Instead, it will be taxed at 30 percent.
This decision has been welcomed by the Federation of Indian Micro, Small, and Medium Enterprises (FISME) and is seen as a positive step for the MSME sector.
However, some MSMEs are worried about these new rules.
They fear that big buyers might choose other suppliers to avoid adhering to the 45-day payment rule.
These rules will mainly benefit MSMEs registered under Udyam, while unregistered MSMEs might face challenges.
Despite concerns, industry experts believe that big companies will hesitate to switch suppliers due to the risks involved.
FISME reassures small businessmen not to panic, as big companies are unlikely to risk their business relationships for delayed payments.
The new rules aim to bring financial discipline and transparency to the MSME ecosystem.
Moreover, companies have the option to make adjustments in case of genuine delays, reducing disputes and legal battles over payments.
