On Thursday, the finance minister –Nirmala Sitharaman has requested the firms to pay MSMEs on time. This is to avoid delays during the time when the country is reviving from the pandemic era.
In a post-budget interaction with FICCI, Sitharaman said, “Recovery cannot be of one sector or one big or small company. Recovery has to be of India. Talking about the payment, Sitharaman said, “For this MSMEs have to be paid within 45 days and it is the responsibility of both private and government to get this implemented”.
The substantial project proposals are expected from April 1st from all the states. Approximately, Rs.1.3-lakh crore allocation is done for the same. This amount is subject to extension for all the states with a 50-years soft loan facility for enhanced capex implementation.
What is Amrit Kaal?
The Indian industry needs to become a primary mover in order to provide policy inputs to the government. This applies to renewable energy and rare earths. Both have to undergo a second round of policy development that can be fashioned. According to Subhrakant Panda, President,FICCI, “the budget gives a confidence to boost crowd in private investments”
In case there is a delay in the payment, the buyer is liable to pay the due interests to the supplier for a delayed period of time i.e beyond 45 days. A delay in the payment will also invite penalty and legal challenges. As discussed earlier, the government departments, autonomous bodies, agencies and other industrial estate need to pay their MSMEs on time. The same has been notified by the RBI in case of delay. The penalty will take shape in the period of delay.
If a buyer or any body denies payment deliberately, the buyer is obligated under the law. The buyer is required to pay the compound interest along with the monthly interest rates to the supplier. The interest charged by MSME would be thrice the rate of the original rate announced by the bank.
As per the notice, the buyer who is taxed cannot claim the tax deduction. This will increase the burden of the buyer.