Press Note - Measures taken in accordance with the provisions of MSMED Act, 2006
One
of the major issues of concern for the promotion and development of the micro
and small enterprises has been the delayed payments from the buyers. To address
this issue, the erstwhile “The Interest on Delayed Payments to Small Scale and
Ancillary Industrial Undertakings Act, 1993” as amended in 1998 was further strengthened
and subsumed in the Micro, Small & Medium Enterprises Development (MSMED)
Act, 2006, which has since been implemented from 2nd October 2006.
Two of the effective measures provided under the provisions of said Act are –
(i) “Requirement to specify unpaid amount with interest in the annual statement
of accounts” (under Section 22) and (ii) “Interest not to be allowed as deduction
from income” under Income-Tax Act, 1961 (under Section 23). The Government has
accordingly notified necessary Instructions vide CBDT Instruction No.12/2006 on
14 December 2006 and Ministry of Corporate Affairs Notification No: G.S.R.719
(E) dated 16 November 2007, so that the provisions of the MSMED Act, 2006 providing
measures to check delayed payments to micro and small enterprises (MSEs) are implemented
in letter and spirit. The measure would go in a long way to minimize
the problem being faced by MSEs in respect of delayed payments. The contents of
the Instruction/Notification are available on the website www.dcmsme.gov.in.
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MG/SR
(Release ID :34171)