Businesses navigate new tax law impacting MSE payments, seek government intervention

The new law under Section 43B(h) of the Income Tax Act, which mandates payment to micro and small enterprises (MSEs) within 45 days of delivery to claim deductions, is causing concern and leading to various strategies by businesses and vendors to mitigate its impact. Some companies are attempting to avoid the law’s impact by sending letters to vendors without expecting responses, while others are issuing post-dated cheques or raising objections within 15 days of delivery to delay payment obligations.