2024-02-21 21:48:44
Mumbai: The new payment rule brought by the government to protect the interests of MSMEs has increased concerns in the market. The situation is such that many small businessmen are canceling their own MSME registration. According to this new payment rule for assessment year 2024-2025, customers purchasing from MSMEs with turnover below Rs 50 crore will have to settle the payment for goods purchased from MSMEs within 45 days of delivery. Apart from this, the payment of pending payment on MSME should be settled by March 31, 2024. If buyers do not adhere to the new payment timeline, the outstanding payments to MSMEs will be treated as taxable income.
adverse effect on the market
Jitendra Shah, President of FAM, says, ‘This new rule brought by the government so that MSMEs can get timely payment, has had an adverse effect on the market that the goods of small scale industries are not being sold. The elders have had their fun, because small scale industries will not be able to survive under the new payment rules. That’s why we are making litters and those which are below 50 crores and whether they are approved in this category or not. Those who have declared themselves MSME through self-declaration are being separated. Many buyers have started returning goods with an eye on March 31, 2024.
Need to understand the new rules
However, Income Tax experts have said that there is a need to understand the MSME payment rule brought in the interests of MSMEs, because once the registration is cancelled, they may have to be deprived of many benefits in future. Metal businessman Shah said that the government’s intention is to protect MSMEs and ensure timely payments, but this new regulation has increased concerns in the market and has led to cancellation of orders given to MSMEs.
There will be no bamboo and no flute
Trustee of Bharat Merchant Chambers, Rajeev Singal, says that there is an atmosphere of fear in the market. The market is breaking due to the new payment rules of MSME, in such a situation we feel that it is right to cancel the registration. Otherwise, if MSME registration is there, then if our buyers do not make payment between 15 to 45 days, it will be included in their income. Rajeev Singal says, ‘We have told thousands of our traders that if your firm is registered in MSME and you are not getting any benefit from the government due to MSME registration, then you should cancel the registration of your firm in MSME. Inform your buyers that they should do business with you without any worries, because now 43B(h) will not apply to them if they buy goods from you.
It is not right to cancel the registration
CA Manish Gadia says, ‘There is no need to be afraid of the new payment rules of MSME and there is no need to be deprived of all the benefits received by canceling the registration. This was inserted in the Companies Act so that MSMEs get timely payments and their working capital requirements are fulfilled. The provision was already there, but it was not being reported, hence it was brought under the ambit of Income Tax and CA was asked to do its audit reporting. Then this came to light and there was chaos, because apart from paying 3 times interest on delay in payment, it also started creating uneasiness in the market when it came to addition in income. In such a situation, the advice is that there is no need to be afraid, if there is a delay in the payment then the claim will not be available in the outstanding expenses on 31st March. Until payment is made, it will remain added to the income and after payment is made, it will be deducted in the next year.