Section 43B(h): The 45-Day MSME Payment Rule Every Buyer Must Know
S
Statura Team
Section 43B(h), effective from FY 2023-24, is one of the most impactful recent changes for buyers. Payments to registered micro and small enterprises must be made within the MSMED Act timeline, or the expense is disallowed.
The rule
If there is a written agreement, payment must be made within 45 days; without one, within 15 days. Amounts unpaid beyond this at year-end are added back to taxable income for that year.
Who it applies to
It applies only to suppliers that are Udyam-registered micro or small enterprises (not medium, not traders). Buyers should collect Udyam status from vendors.
Action points
- Map vendors by MSME status
- Track invoice-to-payment days
- Prioritise micro/small supplier payments before year-end
Statura audits your payables to prevent disallowances.
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