Timely payment to MSMEs rule to be enforced from April 1: Finmin officials
The government will implement a rule in FY25 requiring payments to micro, small and medium enterprises (MSMEs) to be made within 45 days, failing which companies will have to pay tax on the amount due.
Any change to the rule is possible only in the Union Budget in July, two senior finance ministry officials said. The government is not looking at deferring the rule by one year, as sought by traders, they said.
“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.
