New MSME law is bullshit

[lovemyangel]

The new MSME law, particularly section 43(b)(h), raises concerns. According to this law, anyone purchasing from an MSME (small and micro enterprises with turnovers less than 5 crore and 50 crore, respectively) must pay them within 45 days, or face penalties. However, this benefit does not extend to MSMEs that are retail and wholesale traders.

Therefore, if a trader buys from an MSME, they must pay within 45 days. Simultaneously, those buying from traders are not obligated to make payments within the same timeframe. This raises questions about the fairness of the situation.

My father, being a wholesale trader, usually operates on payment cycles of 60-90 days and receives payments in 90+ days. According to the new law, he will have to make payments within 45 days but may still experience delayed payments.

This situation poses challenges for businesses, especially considering the already low profit margins.

 

[thabang]

@lovemyangel How are you dealing with the situation?
My dad is facing the same issue, kindly share your experience and how you overcame it. We can discuss in private.

 

[lovemyangel]

@thabang I got to know that this particular think has been cancelled. To ab koi problem nahi hai.

 

[riskyboots]

@lovemyangel No, where it got cancelled? It is as it is

 

[lovemyangel]

@riskyboots I am sorry, my bad. They law is not canceled. I just heard that it will be, but no official notification yet.

So my dad will have to adjust something. Most probably he will try to get his money from retailers as early as possible.

 

[riskyboots]

@lovemyangel Hmm, may I ask what business your dad do?

 

[lovemyangel]

@riskyboots He's a trader. Sells home& kitchen utensils.

 

[riskyboots]

@lovemyangel Oh he buys from manufacturer?

 

[lovemyangel]

@riskyboots Yes

 

[firefli128]

@lovemyangel The law is not getting cancelled. The govt is hell bent on implementing it.

 

[thabang]

My CA said this rule is still prevailing and no update has come (conversation send on dm). Do you have any link to any MSME latest update on this?

 

[riskyboots]

@lovemyangel https://aranlaw.in/blog/legal-proce...r-delayed-payment-provisions-under-msmed-act/

 

[maheshwari]

@lovemyangel Bania spotted

 

[lovemyangel]

@maheshwari Gujarati !
Koi baat nahi ab ye law cancel ho gaya hai.

 

[maheshwari]

@lovemyangel Marwadi ni ho tum?

 

[lovemyangel]

@maheshwari Nope

 

[riskyboots]

@lovemyangel They say they're overwhelmed by manufacturers itself can't include traders in this criteria, govt focus and priority is to cater to manufacturers

 

[lovemyangel]

@riskyboots However, government should make amendments as it's a serious situation. Manufacturers most probably belong to a upper income bar.

Traders are people who earn relatively less. Traders also include actual EWS people.

They should cater them first.

 

[gregford]

@lovemyangel Tbh this was long overdue. I am a manufacturer myself and all these traders buy on credit and not repay for more than a year. They sell it and enjoy the leverage whereas we have to rely on bank overdraft and pay interests to keep our business going. Your father might be one of the good ones but none of them compensate for the interest we have to pay on their behalf.

 

[singbassman]

@lovemyangel The problem will be the difference between debtors and creditors. The solution is to get an unsecured Business loan to fulfil the working capital need.