Empowering Insolvency Resolutions: NCLAT’s Landmark Ruling Reshapes MSME Dynamics and CoC Primacy in the IBC Landscape

Counselvise
-
0
Empowering Insolvency Resolutions: NCLAT’s Landmark Ruling Reshapes MSME Dynamics and CoC Primacy in the IBC Landscape

Introduction:

In a significant judgment, the National Company Law Appellate Tribunal (NCLAT) has reaffirmed the paramount status of the Committee of Creditors (CoC) in the Insolvency and Bankruptcy Code (IBC) process. The case involved ETCO Denim Private Ltd and raised critical issues regarding MSME registration during the Corporate Insolvency Resolution Process (CIRP).

Background of the Case:

ETCO Denim, a corporate debtor, obtained MSME registration during CIRP. The crux of the matter emerged when Mr Ramesh Shah, the ex-promoter, submitted a resolution plan claiming MSME benefits under Section 240A of the IBC. Despite the CoC approving Shah’s plan with a 77.56% vote share, the National Company Law Tribunal (NCLT), Mumbai Bench, rejected it, questioning the validity of MSME registration obtained post-CIRP initiation. The complexity further increased when the NCLT noted in its finding that the Resolution Professional (RP) had sought MSME registration without obtaining explicit approval from the Committee of Creditors (CoC). This aspect of the case raised questions about the procedural integrity of obtaining MSME status during insolvency.

NCLAT’s Ruling and Legal Basis:

The NCLAT overruled the NCLT’s decision, citing the Supreme Court’s precedent in Hari Babu Thota in CA No. 4422 of 2023. The judgment clarified that a corporate debtor can gain MSME status post-CIRP initiation, provided it’s before submitting the resolution plan. The NCLAT emphasized that the commercial wisdom of the CoC is non-justiciable, except on limited grounds specified in the IBC. Contrary to the NCLT’s findings, the NCLAT rejected claims that the Resolution Professional (RP) acted without CoC approval in obtaining MSME registration. The CoC kept informed and raised no objections, including the dissenting creditor, the Central Bank of India. The NCLAT directed the Adjudicating Authority to pass a fresh order approving the resolution plan within three months.

Implications of the NCLAT Ruling:

This judgment carries substantial implications for the insolvency resolution process. Firstly, the ruling opens the door for corporate debtors to acquire MSME status during insolvency, potentially increasing MSME participation in the resolution process. This could lead to more successful resolutions and revivals of MSME businesses. Secondly, it aligns with the IBC’s objective of maximizing the value of assets by allowing corporate debtors to leverage the benefits and incentives available to MSMEs. This could enhance the attractiveness of resolution plans and encourage more competitive bids.

Conclusion:

The NCLAT’s landmark ruling provides clarity and predictability in IBC implementation, safeguarding the CoC’s collective decisions. By upholding the CoC’s primacy and facilitating MSME participation, the judgment contributes to a more robust and effective insolvency resolution framework.

Disclaimer:

The information provided in this blog is for general informational purposes only and should not be construed as legal advice. Readers are advised to consult with qualified legal professionals for specific guidance. The author and publisher will not hold responsibility for any errors or omissions.

Click Here to read the regulatory order.

Taxpayer’s Delight: Clearing Small Demands, Easing Burdens!

Mehul Shah
-
0
Taxpayer’s Delight: Clearing Small Demands, Easing Burdens!

On 1st February 2024, Finance Minister Nirmala Sitharaman announced during the interim budget the waiver of small outstanding demand under the Income Tax Act, 1961, Wealth Tax Act, 1957 or Gift Tax Act, 1958. The Income Tax department will waive off outstanding tax demands of ₹25,000 or less for the period upto the financial year 2009-10 and ₹10,000 or less for the financial years from 2011-12 to 2014-15. Notably, they will waive every single demand below ₹10,000 and ₹25,000, but the total of all these demands cannot exceed ₹1,00,000 for any specific taxpayer across all financial years.

When calculating the ceiling of ₹1,00,000, any demand entry with a value exceeding ₹25,000 or ₹10,000 shall not be considered. The waiver of outstanding demands will apply to any outstanding demands as of 31st January 2024.

The CBIT has specified that waiver of demand does not apply to the demands under TDS or TCS provisions of the Income-tax Act 1961. Eligible outstanding tax demand covers principal tax demands under the covered Acts, including interest, penalty, fee, cess, or surcharge levied under the provisions of such Acts.

The clarification also specifies that when computing the ceiling limit, they will not consider interest computed under section 220(2) due to delays in payment of demand.

The extinguishment of outstanding demand does not grant the taxpayer the right to:

  • Claim credit for the waived amount under the Income-tax Act, 1961, Wealth-tax Act, 1957, Gift-tax Act, 1958, or any other law, if such benefit has been granted.
  • Request a refund under Income-tax Act, 1961 Wealth-tax Act, 1957 Gift-tax Act, 1958, or any other law.
  • Impact any pending, initiated, or contemplated criminal proceedings against the taxpayer under any law, without conferring additional benefits, concessions, or immunity, unless specifically stated otherwise in the order.

Benefits For Taxpayer:

  • The Income Tax department expects that the withdrawal of outstanding tax demands will facilitate the timely issuance of refunds by resolving hurdles faced in processing refunds for subsequent assessment years due to pending demands from previous years.
  • The withdrawal of demand resolves tax disputes for taxpayers, offering them peace of mind.
  • Automatic waiver of interest and penalties in the scheme provides huge monetary relief to taxpayers and gets rid of legal hassles.

Process for waiving tax demands

The Income Tax Department’s Central Processing Cell will automatically apply the waiver without requiring any intervention from the taxpayer. They expect to complete the process within 2 months.

The taxpayer can check the pending status on the official income tax portal.

HOW TO CHECK THE STATUS?

  • Visit the income tax portal
  • Login and navigate to the pending action tab
  • Click on response to outstanding demand
  • It will show the data. In case of no outstanding demand, it will show the message ‘No records of demand’ and if the demand is waived off it will show “Demand extinguished”.

In case of any doubt, one can call the toll-free numbers 1800303090130 or 180020335435

CONCLUSION

This groundbreaking initiative vows to significantly alter the landscape for over 1 crore taxpayers burdened by numerous petty, non-verified, non-reconciled, or disputed direct tax demands dating back to 1962. This move not only brings relief to honest taxpayers but also paves the way for smoother refund processes in the years ahead.

Appointing a Nominee Director: Process for Start-up companies and SME companies.

Counselvise
-
0
Appointing a Nominee Director: Process for Start-up companies and SME companies.

Who is the Nominee Director?

A Nominee Director is a director in a company appointed by financial institutions, banks, or investors to represent their interests on the Board of Directors and monitor the activities of the borrower company or investee.

Conditions For Appointment Of Nominee Director:

  1. Financial institutions appointing nominee directors must adhere to applicable laws and company agreements.
  2. Anybody with the legal authority under applicable laws can nominate the director, including the central or state governments.
  3. After appointing such a Director, the total number of Directors in the Company cannot exceed the maximum limit.
  4. The appointment of a such director precludes their classification as an independent director.

Procedure For Appointment Of Nominee Director:

  • AOA Authorization:

The appointment of nominee directors is subject to and governed by the provisions outlined in the company’s articles of association. In case the article of association does not provide authorization, the company has to alter the article to authorize the company to appoint such director.

  • Board Approval: 

The decision to appoint a nominee director typically requires board resolution under section 161(3). Hold a board meeting to discuss and vote on the appointment. Document the resolution in the board minutes.

  • Submission of Nomination Letter and DIR-3:                  

The person nominated as a nominee director shall submit a nomination letter and confirm that they have a Director Identification Number (DIN) which they obtain by the filing of Form DIR-3.

  • Consent and Declaration:  

Obtain the written consent of the nominee director agreeing to their appointment in Form DIR-2. They may also need to provide a declaration confirming their eligibility, and absence of disqualifications under section 164(2) of the Companies Act 2013 in Form DIR-8.

  • Filing of Returns with the ROC:

The company must submit a Return of Appointment of Directorship (Form DIR-12) to the Registrar within 30 days of the Board meeting. This submission should include a copy of the Board Resolution, Consent, and Declaration, along with the required documents attached to Form DIR-12:

  1. A certified True Copy of the Board Resolution passed
  2. DIR-2 Consent to Act as Director
  3. DIR-8 Declaration by Director
  4. Letter of Appointment.
  • Disclosure in MBP-1:

After the appointment, the disclosure is required to be obtained, i.e. the nominee director should inform the other companies that he is the director in Form MBP-1 about the appointment.

Disclaimer:

It’s essential to seek legal advice or consult with professionals familiar with corporate governance and regulatory requirements to ensure compliance throughout the process of appointing a nominee director. Additionally, maintain open communication and a positive working relationship with the nominee director to maximize their value to the company. 

REITs and InvITs – Financing Urbanization and Infrastructure in India: A Comprehensive Insight

Counselvise
-
0
REITs and InvITs – Financing Urbanization and Infrastructure in India: A Comprehensive Insight

Picture this: you, the investor, have the power to own a slice of premium
real estate or vital infrastructure projects without the hassle of property
management or construction headaches. REITs and InvITs precisely offer
that – a passport to diverse, income-generating assets that were once
reserved for the elite few. Whether it’s gleaming office towers, bustling
shopping malls, or essential highways and power grids, these investment
vehicles open doors to a world of possibilities.


What are REITs and InvITs?

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts
(InvITs) were launched in India in 2014. As these instruments are relatively
new in the Indian investment landscape, there is substantial uncertainty
about their effectiveness and benefits.
REITs function like mutual funds, managing real estate properties for
regular income and capital appreciation purposes, thus, pooling funds
from investors to provide a liquid entry into real estate investment and
diversify portfolios.
Infrastructure Investment Trusts or InvITs are also like mutual funds that
pool money from investors that own and operate operational
infrastructure assets like highways, roads, pipelines, warehouses, power
plants, etc. They offer regular income (via dividends) and long-term capital
appreciation.


Advantages to Investors:

  • SEBI mandates REITs to invest at least 80% of their investable assets
    in developed and income-generating properties. This mandate by
    SEBI makes it a more stable and less risky investment option for
    investors.
  • Further, they need to distribute 90% of their income to investors in
    the form of dividends, which makes it a great passive income source
    for investors.
  • As the units of REITs and InvITs are listed on stock exchanges, there is
    reasonable liquidity for both the existing investors and the new
    investors.
  • For retail investors, it offers a great diversification option apart from
    equities, debt, and gold. With as little as 500 rupees, investors can lay
    their hands on high-class commercial real estate assets.


While REITs and InvITs are relatively new to Indian investing
landscape, several international markets, such as the United States,
Singapore, Australia, and Japan can help investors understand how they
perform during specific economic cycles. Given the vital role of
infrastructure in a country’s economic development, REITs and InvITs will
help channel funds for critical infrastructure projects without
putting a strain on government finances.

SEBI EX-PARTE AD INTERIM ORDER AGAINST GROWPITAL PLATFORM: A CLOSER LOOK

Mehul Shah
-
0
SEBI EX-PARTE AD INTERIM ORDER AGAINST GROWPITAL PLATFORM: A CLOSER LOOK

INTRODUCTION

In recent months, the Growpital Platform has gained attention for its promises of lucrative investment opportunities in the agricultural sector, boasting tax-free assured returns for investors. But behind the allure of guaranteed profits lies a tale of regulatory scrutiny and investor concern. Let’s dive deeper into the intricate details uncovered by SEBI’s investigation and its implications for investors and regulatory compliance.

UNRAVELING THE SCHEME

SEBI’s investigation into Growpital Platform reveals a sophisticated operation facilitated through multiple Limited Liability Partnerships (LLPs). These LLPs, prefixed with the “ZF Project,” act as vehicles for pooling funds from investors. Now, Growpital promises fixed returns to investors based on profit generated from agricultural projects.

THE FOLLOWING INVESTMENT PLANS ARE OFFERED ON GROWPITAL

Name of PlanUnit InvestmentReturn on investment (per annum)Tenure / Lockin period
Leafy Eleven11,000 /-11%1 year
Ever Green Returns20,000 /-12%1 year
Harvest Bloom2,00,000 /-14%1 year

Delving deeper into the documents sourced from the Ministry of Corporate Affairs database, it becomes evident that entities like Yotta Agro Ventures Private Limited and Farm Silo Tech LLP play pivotal roles within this intricate framework. These entities, collectively referred to as “Growpital” in supplementary agreements, serve as conduits for investor funds and oversee investment activities. Through these interwoven entities, Growpital presents itself as a gateway to lucrative investment opportunities in the agricultural sector, enticing investors with the prospect of steady returns.

KEY OBSERVATIONS:

SEBI’s preliminary examination raises several red flags regarding Growpital’s operations. The platform’s structure allows for easy entry and exit of partners, with minimal capital contributions required. The LLPs’ management decisions exert minimal influence over investors despite labelling them as partners.

REGULATORY IMPLICATIONS:

SEBI’s scrutiny suggests that Growpital’s scheme meets the criteria of a Collective Investment Scheme (CIS) under Section 11AA of the SEBI Act without obtaining any certificate of registration from SEBI. SEBI’s order emphasizes securities law violations by Growpital, underscoring the need for further investigation to safeguard investor interests.

ISSUANCE OF AN INTERIM ORDER

In response to its findings, SEBI issues an ad interim ex-parte order against Growpital and associated entities. Moreover, the order encompasses directives to cease CIS operations, refrain from soliciting funds, provide a full inventory of assets, and freeze bank accounts and demat accounts.  These measures aim to safeguard investor interests and maintain the integrity of the securities market.

CONCLUSION:

SEBI’s investigation into the Growpital Platform sheds light on the complexities of the alternative investment scheme emphasizing the crucial role of regulatory compliance in safeguarding investor interests. As the investigation unfolds, investors are advised to exercise caution while opting for such alternative investments and stay informed about the developments. SEBI remains vigilant in its efforts to uphold market integrity and protect the interests of all stakeholders involved

“Read the regularity order“

Bollywood, Betting, and Billionaires: The Mahadev App Saga

Counselvise
-
0
Bollywood, Betting, and Billionaires: The Mahadev App Saga

The Enforcement Directorate (ED) had set the stage for a high-profile showdown, summoning Bollywood’s elite, including Ranbir Kapoor, Shraddha Kapoor, and other luminaries, to unravel the mystery behind the Mahadev betting scandal. With the Mahadev Satta App at the epicenter of the storm, the spotlight is firmly fixed on the glamorous yet shadowy world of celebrity involvement in online betting.

The Modus Operandi:

Sourabh Chandrakar, a former juice vendor, and his partner Ravi Uppal the Masterminds originating from Bhilai have been operating their illegal operation out of Dubai’s shadows for the last four years.

Headquartered in the UAE, the business has a franchising concept, with affiliates sharing revenues 70:30 ratio. In addition, Dixit Kothari was a crucial link, allegedly he acquired the domain with fake ID and managed the website, and he also had contact with bookies and punters.

The Mahadev Gaming app offers a lucrative opportunity for players to engage in live gambling. This firm, which operates secretly within closed groups on instant messaging networks, is said to generate an astounding Rs. 200 crores per day.

Revealing a web of deception with offenders tempting people with contact numbers placed on websites, particularly through platforms such as WhatsApp. Upon contact, consumers are given two different numbers—one for making deposits and accruing points and another for cashing out.

ED’s Trailblazing Investigation:

Following Chandrakar’s lavish Rs. 250 crore wedding celebration in Ras Al-Khaimah, United Arab Emirates, allowing travel of relatives in luxury planes from Nagpur. This extravagant celebration exposed alleged hawala operations and ties with Pakistan and the UAE, which prompted the ED to investigate. Chandrakar has created a prosperous empire in the UAE with Ravi Uppal, ostentatiously showing off his newfound fortune.

From Glitz to Grit:

  • Further Investigation revealed a web of 32 individuals including entrepreneurs Saurabh Chandrakar and Ravi Uppal were engaged in a hawala ring worth Rs. 5,000 crore operating in Pakistan and UAE, with connections to Dawood Ibrahim’s network to develop a similar app for Pakistan.
  • Raids led to the seizure of assets worth Rs. 417 crores from the suspected money laundering activities of Chandrakar and associates through 70 Shell companies and offshore accounts.
  • Interpol Red Notices Targeted the masterminds, while Investigations were carried out on M/s Rapid Travels, which managed the app’s ticketing and Vikash Chhaparia, the main participant in money laundering.
  • Dixit Kothari’s arrest followed by Chandrakar and Uppal’s detention in Dubai signify a critical point in the fight against the multi-billion rupee betting scam.
  • In retaliation, 22 illicit betting applications and websites are banned by the Indian authorities.

Stars in the Spotlight:

  • Bollywood celebs, including Ranbir Kapoor, Shraddha Kapoor, Boman Irani, Hina Khan, and Kapil Sharma, had been summoned in by the ED owing to their involvement with events thrown by Saurabh Chandrakar.
  • Indicating a wider network of involvement, the ED broadens its probe to include notable people namely, Mohit and Gaurav Burman of the Dabur Group.
  • A political quarrel emerges as the Congress and BJP level allegations about Chhattisgarh Chief Minister Bhupesh Baghel’s purported receipt of Rs. 508 crore from Asim Das (The alleged cash courier) sent from UAE.

In a Nutshell:

The Mahadev Betting Scam serves as a cautionary tale about the perils of corruption and greed. Behind the allure of Quick money lies a dark underworld of deceit and exploitation. By illuminating this scandal, Urge is to strive to remain vigilant against the allure of quick riches and to uphold the integrity of India’s legal and regulatory framework.

RELIEF FOR STARTUPS IN INTERIM BUDGET 2024

Counselvise
-
0
RELIEF FOR STARTUPS IN INTERIM BUDGET 2024

On 1st February, Finance Minister Nirmala Sitharaman introduced the Interim Budget 2024 in Parliament. An important feature is the deadline for the incorporation of Startup LLP/Company to qualify for the Section 80IAC exemption under the Income Tax Act 1961, extended by an additional year.  It means that startup companies established by the year 31st March 2025 will be eligible to avail the exemption u/s 80 IAC.

This extension creates a one-year opportunity for recently formed startups. They can take advantage of the tax relief, potentially fostering additional entrepreneurship and business development within the specified timeframe.

80IAC of the Income Tax Act 1961 is the provision that allows recognized startups to get 100% tax exemption for 3 consecutive financial years out of 10 years of its incorporation. This is, indeed, one of the most important benefit of startup India registration.

CRITERIA FOR AVAILING EXEMPTION U/S 80IAC

  • The entity should be DPIIT recognized startup
  • Only a private limited or a limited liability partnership is eligible for tax exemption.
  • The startup should have been incorporated on or after 1st April 2016 but before 31st March 2025.
  • Turnover should be less than INR 100 crores in any of the previous financial years.

Tax exemption under Section 80IAC is a significant benefit for startups in India. It helps them to reduce their tax liability and reinvest the savings into their business. However, it is important to note that the approval for tax exemption is discretionary. It is based on the evaluation of the startup’s concept, innovativeness, scalability, and potential for growth and employment generation. Therefore, it is crucial for startups to put together a compelling pitch deck and video that highlights their strengths and potential to get the exemption U/S 80IAC.


Small but Mighty: Everything you need to know about the euphoric SME IPOs

Counselvise
-
0
Small but Mighty: Everything you need to know about the euphoric SME IPOs

India’s IPO market is booming. With about 220+ IPOs in 2023 and 22 IPOs in the first month of 2024 alone, boils down to roughly one debut every single day on the exchanges. Among these, the ones grabbing the most eyeballs are the SME IPOs. The massive listing gains as a result of heavy oversubscription have lured the retail investors to bet big on these small- ticket offerings. This handbook seeks to provide investors with the knowledge and resources they need to make successful SME IPO investments.

Understanding the SME IPO Boom:

The surge of SME IPOs can be linked to various factors:

  • Dedicated and tailor-made platforms such as BSE SME and NSE EMERGE have facilitated in providing a favorable environment for the small companies to go public.
  • Increased investor interest and participation have fueled the SME IPOs market.
  • The overall economic conditions and the recent Bull Run have led many small enterprises to raise funds through the IPO route.
  • SEBI has eased the IPO norms for SMEs. Due to which such companies can have an accessible pathway for market entry.

Nowadays, we see most of the SME IPOs having a stellar debut. But what about holding it for a longer horizon? Will the buy-and-hold strategy work in SME stocks? Let’s crunch some numbers!

Since the launch of the SME indices in 2012, over one-third of the SME stocks have had negative returns to date. In 2021, for instance, 25% of SME IPOs are in the red, with losses reaching up to 94%. Up to 30% of SMEs that were listed in 2022 have seen their returns to date decline. In 2023, that figure is twenty-four percent.

“So, dear IPO Frenzies, not everything that glitters is gold. Don’t get lured by the returns and always have a look at the other side of the coin. Don’t let the FOMO (fear of missing out) of making quick money overrule your mind.” Below mentioned are a few tips which an investor may consider 🙂

Things to keep in mind by the investors before applying in SME IPOs:

  • Perform Due Diligence: Always check the promoter’s background (They must not be engaged in any kind of corporate wrongdoings)
  • Analyse Financials: Have a look at the financials of the company and its future growth prospects before applying for any IPO
  • Assess Liquidity:  It is important for investors to be aware that in smaller offerings, if they are allotted shares, there may be liquidity problems that prevent them from selling their shares right away after listing
  • Assess Market Conditions: Consider the prevailing market sentiment and economic conditions. Assess whether the market environment is conducive to IPO investments
  • Beware of Promoter Offloading: Be cautious if promoters are offloading their entire stake, as it may signal lack of confidence in the company’s future.
  • Grey Market Caution: The IPO grey market provides unofficial indications of listing prices and can be volatile. However, investors should not base their investment decisions solely on grey market prices
  •  Evaluate Valuations: Investors should also examine the company’s valuations. The offer price may be undervalued or overvalued depending on the company’s sector and its financial metrics.
  • Study Competitor Performance: Analyse the performance of the company’s competitors to gauge its standing within the industry.

With careful analysis and strategic planning, SME IPO investments might prove to be small but mighty chances for investors to diversify their portfolios and attain financial prosperity.

A Step-by-Step Guide for obtaining Make in India Certificate

Saransh Narang
-
0
A Step-by-Step Guide for obtaining Make in India Certificate

Prime Minister Narendra Modi launched the ambitious Make in India campaign in 2014, envisioning the transformation of the country into a global manufacturing powerhouse. This initiative aims to boost employment, foster innovation, enhance skill development, and propel overall economic growth by supporting domestic manufacturing and output.

To encourage the ‘Make in India’ initiative, the Government issued the Public Procurement (Preference to Make in India) [PPP-MII] Order 2017, under the Department for Promotion of Industry and Internal Trade (DPIIT) Order No.P-45021/2/2017-B.E.-II dated 15.06.2017.

Here is a step-by-step guide on how to apply for the Make in India Certificate:

Eligibility Criteria:

  • You must be an Indian or foreign company with manufacturing or service operations based in India.
  • The products must undergo a minimum of 20% value addition in India.
  • Class-I Local Supplier: A supplier or service provider with local content equal to or more than 50%.
  • Class-II Local Supplier: A supplier or service provider with local content more than 20% but less than 50%.

(Note: Only ‘Class-I local supplier’ and ‘Class-II local supplier’ are eligible to bid for procurement with an estimated value of purchases less than Rs. 200 crore.)

Documents Required:

  • Company registration and incorporation documents (GST Registration Certificate, Certificate of Incorporation).
  • GeM Bid Document.
  • List of products manufactured in India, along with the percentage of local value addition.
  • Raw Material and Service Cost break up.
  • Details and address of your manufacturing facilities in India.
  • Purchase Bill of machines, tools, and equipment used.
  • Purchase bill from the supplier.

By adhering to these steps and providing the necessary documents, companies, across all industry sectors can obtain the Make in India Certificate, facilitating their participation in government procurement processes and contributing to the vision of a self-reliant and globally competitive India.

MSME Payment delays to burn a hole in your pocket: Decode the changes in 43B.

Romil Shah
-
0
MSME Payment delays to burn a hole in your pocket: Decode the changes in 43B.

In a world where business dynamics are continuously changing, recent amendments to Section 43B of the Income Tax Act are sending shock waves through the channels of trading.

Picture this: As a business owner relying on micro and small enterprises for crucial supplies, you’re facing a ticking time bomb with delayed payments threatening to dent your pocket.

Double-Trouble Alert!

Until recently, enterprises were able to breathe easily, claiming deductions even if payments to MSMEs were paid slightly after the due date but before the filing deadline. Not anymore! The recent amendment in section 43B is here to disrupt the game.

Now, with the new amendment of section 43B(h) any delayed payment to micro or small enterprises beyond the due date under the MSME Act means your deduction is deferred until the actual payment is made. Yes, even if it’s just one day after the 45-day window! (in case of agreement else 15-day window) This shift aims to instill discipline in timely payments but could spell double trouble for your cash flows and working capital.

Time to Act!

As a business, navigating this change is crucial. Here’s your survival guide:

  • Obtain MSME registration details from supplies soon!
  • Map out payment due dates and set those payment reminders.
  • Boost liquidity to ensure you meet those deadlines.
  • Negotiate optimal payment terms in new MSME contracts.

But wait, here’s the kicker:

Conclusion: Prioritize Now or Pay Later!

The key to thriving in this new tax landscape lies in your ability to prioritize timely payments to MSMEs. It’s not just about compliance part but it’s about safeguarding your cash flows and avoiding unnecessary interest charges. By embracing robust payment governance and strategic planning, your business can seamlessly adapt to this tax law change.

1...111213...32Page 12 of 32