New Delhi, Feb. 13 -- A recent legislation mandating prompt payments to registered Micro, Small, and Medium Enterprises (MSMEs) has stirred discomfort among organised apparel retailers and FMCG companies, according to top sources.
The law stipulates that any payment to MSMEs beyond 45 days of receiving goods or services will not be recognised as an expense and will be added to the company's profit for taxation purposes.
While this rule applies to all firms, it particularly affects industries like fast-moving consumer goods (FMCG), pharmaceuticals, and apparel retail, which rely on relatively long credit cycles when dealing with suppliers, including registered MSMEs.
Commenting on the issue, Riaz Thingna, a partner at Grant Thornton Bh...