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CS Executive · Setting Up of Business, Industrial and Labour Laws · Micro, Small and Medium Enterprises

Anita, a lawyer advising a small supplier, asks what happened to the earlier law on interest for delayed payments to small scale and ancillary industrial undertakings. Under the MSMED Act, 2006, which statement is correct?

The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 is repealed by the MSMED Act, 2006, and anything done or action taken under it is deemed to have been done or taken under the corresponding provisions of the 2006 Act.

  1. AThe 1993 Act continues to operate alongside the MSMED Act, 2006
  2. BThe 1993 Act is repealed, and anything done or action taken under it is deemed done or taken under the corresponding provisions of the MSMED ActCorrect
  3. CThe 1993 Act is repealed and all actions taken under it are void
  4. DThe 1993 Act is repealed only for medium enterprises

Explanation

Section 32(1) repeals the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. Section 32(2) saves past actions by deeming them done under the corresponding provisions of the 2006 Act. So they are neither void nor is the old Act continuing.

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