THE INTEREST ON
DELAYED PAYMENT TO SMALLSCALE AND ANCILLARY INDUSTRIAL UNDER-TAKING ACT, 1993
No.32 OF
1993
CONTENTS
1. Short title, extent and
commencement.
3. Liability of buyer to make
payment.
4. Date from which and rate at which
interest is payable.
6. Liability of buyer to pay
compound interest.
8. Requirement to specify unpaid
amount with interest in the annual statement of accounts.
9. Interest not to be allowed as
deduction from income.
[2nd
April, 1993.]
An
Act to provide for and regulate the payment of interest on delayed payments to
small scale and ancillary industrial undertaking and for matters connected
therewith or incidental thereto.
BE
it enacted by Parliament in the forty-fourth Year of the Republic of India
as follows:-
1. Short title, extent and commencement.
(1) This
Act may be called the Interest on Delayed Payments tot Small Scale and
Ancillary Industrial Undertakings Act, 1993.
(2) It
extends to the whole of India, except the State of Jammu and Kashmir.
(3) It shall be deemed to have come into force on the 23rd day of
September, 1992.
In
this Act, unless the context otherwise requires, -
(a) "Ancillary
industrial undertaking" has the meaning assigned to it by clause (aa)
of section 3 of the Industries
(Development and Regulation ) Act, 1951; (65 of 1951)
(b) "Appointed
day, means the day following immediately after the expiry of the period of
thirty days from the day of acceptance or the day of deemed acceptance of any
goods or any services by a buyer from a supplier.
Explanation,-
For the purposes of this clause, -
(i) 'The day of acceptance' means, -
(a) The
day of the actual delivery of goods or the rendering of services; or
(b) Where any objection is made in writing by
the buyer regarding acceptance of goods or services within thirty days from the
day of the delivery of goods or the rendering of services, the day on which
such objection is removed by the supplier;
(ii) 'The
day of deemed acceptance' means, where no objection is made in writing by the
buyer regarding acceptance of goods or services within thirty days from the day
of the delivery of goods or the
rendering of services, the day of the actual delivery of goods or the rendering
of services;
(c) 'Buyer’
means whoever buys any goods or receives any services from a supplier for
consideration;
(d)
'Goods’ means every kind of movable property other than actionable claims and
money;
(e) 'Small
scale industrial undertaking' has the meaning assigned to it by clause (j) of
section 3 of the Industrial (Development and Regulation) Act, 1951; (65 of
1951)
(f) 'Supplier’
means an ancillary industrial undertaking or a small scale industrial
undertaking holding a permanent registration certificate issued by the
Directorate of Industries of a State or Union territory.
3. Liability of buyer to make payment.
Where
any supplier supplies any goods or renders any services to any buyer, the buyer
shall make payment therefore on or before the date agreed upon between him and
the supplier in writing or, where there is no agreement in this behalf, before
the appointed day.
4. Date from which and rate at which interest is payable.
Where
any buyer fails to make payment of the amount to the supplier, as required
under section 3 the buyer shall, notwithstanding anything contained in any
agreement between the buyer and the supplier or in any law for the time being
in force, be liable to pay interest to the supplier on that amount from the
appointed day or, as the case may be, from the day immediately following the
date agreed upon, at such rate which is five per cent. points above the
floor rate for comparable lending.
Explanation.
For the purposes of this section, 'floor rate for comparable lending' means the
highest of the minimum lending rates charged by scheduled banks (not being co-operative
banks) on credit limits in accordance
with the directions given or issued to banking companies generally by
the Reserve Bank of India under the
Banking Regulation Act, 1949.(10 of 1949).
Notwithstanding
anything contained in any agreement between a supplier and a buyer or in any
law for the time being in force, the buyer shall be liable to play compound
interest (with monthly interest) at the rate mentioned in section 4 on the
amount due to the supplier.
6. Liability of buyer to pay compound interest.
The amount due from a buyer, together
with the amount of interest calculated in accordance with the provisions of
section 4 and 5.shall be recoverable by the supplier from the buyer by
way of a suit of other proceeding under any law for the time being in force.
No appeal against any decree, award
or other order shall be entertained by any court or other authority unless the
appellant (not being a supplier) has deposited with it seventy-five per
cent.of the amount in terms of the decree, award or, as the case may be,
other order in the manner directed by such court or, as the case may be, such
authority.
8. Requirement to specify unpaid amount with interest in the
annual statement of accounts.
Where
any buyer is required to get his annual accounts audited under any law for the
time being in force, such buyer shall specify the amount together with the
interest in his annual statement of accounts as remains unpaid to any supplier
at the end of each accounting year.
9. Interest not to be allowed as deduction from income.
Notwithstanding
anything contained in the Income-tax Act, 1961, (43 of 1961) the amount
of interest payable or paid by nay buyer, under or in accordance with the
provisions of this Act, shall not, for the purposes of computation of income
under the Income-tax Act, 1961, be allowed as deduction.
The
provisions of this Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law for the time being in force.
(1) The Interest on Delayed
Payments to Small Scale and Ancillary Industrial Undertakings Ordinance, 1993 (Ord.4 of 1993) is hereby repealed.
(2) Notwithstanding such
repeal, anything done or any action taken under the Ordinance so repealed shall
be deemed to have been done or taken under the corresponding provisions of this
Act.
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