Lost your password?
Don't have an account? Sign Up

FM Sitharaman hints about the reconsideration of 45-Day payment rule to MSMEs

Share This News Story:

LUDHIANA : Finance Minister Smt. Nirmala Sitharaman suggested that the government is open to reconsidering the existing 45-day payment rule to (MSMEs) micro, small and medium enterprises, if the industry desires it.

Sitharaman highlighted that if MSMEs require an extended payment period, they have the opportunity to submit representations for consideration in the upcoming July budget, which will take place after the elections.

Speaking ahead of the last phase of the Lok Sabha elections in Punjab, the Minister also confirmed that tax relief for MSMEs would still be available, but only when payments are made as it ensures businesses can benefit from tax relief, while adhering to the current payment timelines.

“If MSMEs, industry feel they don’t want this amendment and will sort it amongst themselves, and want this route to be changed, then do submit representations and definitely in the July budget, we will work towards it,” Sitharaman said, during her interaction with MSMEs and industry at Ludhiana in Punjab.

The 45-day rule refers to a 2023 budget announcement to Section 43B(h) of the Income Tax Act, which mandates companies to fulfill their payment obligations to MSMEs within 45 days or forgo tax benefits in that year, starting April 1, 2024.

Outstanding dues, too, were expected to be cleared by March 31. Beyond this period, the unpaid amount would be considered profit and liable for tax—effectively allowing deductibles only after payments are made.

Industry bodies remain divided on industry preparedness. While some players welcomed the move, others have voice doubts about its practicality.

Speaking in Ludhiana, Sitharaman highlighted the need for a strong finance ministerial voice from the state and asked the people of Punjab to vote for it.

Share This News Story: