45-day MSME Payment Rule likely to be postponed by Finance Ministry

The finance ministry might think twice before implementing the ’45-day MSME Payment rule’. The government was thinking about implementing the rule the current year before April, but as per reports, the government might postpone it for next year. For now, the government might postpone it until next year, to take effect on April 1, 2025, according to the sources.

In the new 45-day MSME Payment Rule, the government mandated businesses to pay the amount they owed to MSME businesses within 45 days of the purchase of the product or service. Others were ready to face the consequences. After seeing the rule’s strict rules, many businesses approved the finance ministry and wrote a letter to the ministry to amend the rule. Some institutions called it impossible to implement this strict rule this fast. 

Last month, the finance ministry of the central government released a notice in which they talked about the implementation of a new rule for MSME businesses. Many people raised their voices against the rule and asked the government to amend it, while on the other hand, many small and medium businesses praised the rule and thanked the government for acknowledging it.

The new rule for MSME will force shoppers or providers to pay the quantity within 45 days; in any other case, they can face results, and the consequences can vary from condition to situation. Under Section 43(B), in the first situation, if the consumer fails to make the fee within 45 days, the acquisition of the goods will now not count as a taxable expense, which allows you to cause the client to fail the tax return on that product purchase. 

In the second condition, if the buyer fails to make the payment within forty-five days, the purchaser has to pay 3% extra interest, in line with the RBI’s current interest charge exchange. That amount will not be taxable for the seller, to help the MSME supplier.