MSME’s Are Filing Appeal In The Court To Cancel The New 45 Day Payment Deadline Rule

MSME recently moved to the court to file a request to take the 45-day payment deadline back. Under Section 43H (B) of the Income Tax Act 1961, all buyers purchasing any goods from MSME businesses must pay the amount of the purchase within 45 days of the purchase. Otherwise, the amount will add up in their profit and they will be liable to pay it. The main motive of this new rule was to promote timely payments to MSMEs. Many of such enterprises used to get no payments earlier for a long time.

MSMEs Urging To Take The 45 Day Payment Deadline Rule Back

Now all the buyers have to make the payment of any purchase from MSME within 45 days of the purchase. However, the motive behind the launch of this rule does not seem to be getting fulfilled. There are a total of 36 million Micro, Small, and Medium Enterprises in India. However, they are facing a huge loss at the moment. There are a lot of increasing cases of receiving no business from these MSMEs after the release of this new rule.

Thus, MSMEs decided to move to court to request a takeback of this new rule. Many of the MSMEs also canceled their MSME registrations as well. The number increased to 40,000 within a few weeks. Apart from that, Gujarat is facing the most crises. Around 12,000 MSMEs moved to cancellation after the new rule.

The main reason for their cancellation of registration is a sudden fall in the buyers who are moving to unregistered buyers or large enterprises. Large enterprises and unregistered small enterprises do not have any payment deadline. MSMEs moved to the Supreme Court for the cancellation of the rule.

Head of Ahmedabad Vyapari Mahasangh, Meghraj Dodwani also said that they will go to Gujarat High Court as well for the case. The rule launched a few days ago. Within a short period, it seems to be taking away the business of these MSMEs. The registered enterprises are now finding it to be a better option to remain unregistered.

If it continues for a longer time, there will be a further reduction in the MSME registrations. It will not allow the government to track the current demands and the flow of business in any industry accurately due to many firms remaining unregistered. We hope you get enough details about the current situation of MSMEs and their business after the 45-day payment deadline act launch. Stay tuned for more information.