Micro, Small, and Medium Enterprises (MSMEs) 45-day payment rule implementation is getting a new twist. There is a big announcement by the Centre over this MSME payment rule initiative by the finance ministry of India. The government has issued a new notification regarding this rule for MSMEs. These amendments will be done in the MSME Development Act, 2006. Let’s discuss each and everything below with all the details and key points.

MSME 45 day payment rule in Effect from April 1, 2024

As per the news, MSMEs have to pay payments within 45 days of buying the goods or services. The rule will be in effect from April 1, 2024. The amendment has been approved in the parliament sessions.

“According to the Finance Act 2023, companies need to make payments to the MSME sector within 45 days, which is slated to come into effect from April 1, 2024, else the companies cannot claim deductions on it,” a senior finance ministry official told Moneycontrol.

“It will be the cost of tax versus the cost of additional borrowing. If the buyer has been operating and has good credibility, it should not be difficult for him to get the finance. Businesses should find a way to get finance within 45 days to make payments to MSMEs.” Saigal said.

Previously, the MSME 45 day payment rule was postponed till 2025 but now it going to be in effect from April 1, 2024. Most probably, it will be a masterstroke in the MSME and boost the cash flow for companies.

Along with it, the central government will help by implementing measures such as the Trade Receivables Discounting System (TReDS) to ensure compliance with these rules. Through these measures, MSMEs will be able to get discounts on their invoices.


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