The big buzz on small business payment delays
Mahak Agarwal | corplaw@vinodkothari.com
The Micro, Small and Medium Enterprises Development Act, 2006 (‘MSME Act’) has been around for close to 2 decades now, providing for penal interest for delayed payments to MSMEs; yet, it is only of late that there has been buzz around this. Why?
This attributes to clause (h) of Section 43B of the Income Tax Act, 1961 (IT Act, 1961), inserted by the Finance Act, 2023, effective FY 23-24. That is to say, its impact will be faced for outstanding payments as on 31st March, 2024. Now, with the year end fast approaching, there’s a sense of confusion amongst taxpayers who buy goods or services from MSMEs.
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