New Delhi, May 6 -- The Supreme Court on Monday declined to hear a challenge by micro, small and medium enterprises (MSMEs) against Section 43B(h) of the Income Tax Act rule that restricts them from extending credit to buyers beyond 45 days.

The rule aims to regulate credit practices in the MSME sector and ensure timely payments to address working capital issues these businesses often face.

Under the provision, if an MSME registered under the MSMED Act of 2006 allows a credit period of over 45 days to a buyer when selling goods or services, it faces penalties.

Some MSME groups had petitioned the Supreme Court, arguing the rule could lead larger buyers to avoid registered small suppliers and instead purchase from unregistered enterprise...