New Delhi. The government may relax the requirement for large companies to make payments to MSMEs within 45 days of buying goods and services. An announcement to this effect is likely to be made in the Budget to be presented on July 23.Sources said the government is considering suggestions made by MSMEs during pre-budget consultations regarding changes in Section 43B(h) of the Income Tax Act. In last year's budget, the government had added a new section under Section 43B of the Income Tax Act to address the challenge of delayed payments faced by MSMEs in the country.

MSME got 45 days exemption

Under this, if a big company does not make payment to MSME within 45 days then it cannot deduct that expense from its taxable income.Now MSMEs are afraid that due to this provision, big buyers may ignore MSME suppliers or start buying goods from those MSMEs which are not registered. The MSME sector contributes 30 percent to the country's GDP and is the second largest employer after agriculture.

This will be revealed in the new budget 

Earlier in May, Finance Minister Nirmala Sitharaman had said that as per the representations submitted by MSMEs, any changes in the rules, if any, will have to be made in the full Budget in July under the new government.The MSME sector contributes 30 per cent of the country's gross domestic product (GDP) and is the second largest employer after agriculture. The share of exports from products specified for MSMEs is 45.56 per cent of the country's total exports.