No expectations of extension of MSME 45 days payment criteria

Finance Act 2023 inserted new clause (h) in section 43B of IT Act. The motive was to ensure payment towards the goods supplied by MSMEs within 45 days.

What is MSME 45 Days payment rule?

This clause states that any amount that the if assessee owes any sum to a micro or small business and he has not made the payment after the 45-day deadline set forth in section 15 of the MSME Development Act 2006, the expense may only be deducted upon actual payment. If the payment is not made within the allotted time, the buyer will be responsible for paying tax on it.

Now there is the demand of various organizations and businesses to defer this clause. As per news sources, there is no expectation of an Extension of the MSME 45 Days Payment Rule.

Why Demand cannot be fulfilled?

As per Government sources no Proposal to make this change was demanded before Interim Budget 2024 where this change would have been possible. Now before the Elections various organizations and businesses are demanding deferment of this clause.

Government has clarified that Limited options are available with government now due to the elections; and changes if any will not be made now; but can only be made in the budget that will be presented after the elections.