Govt Mandates Companies to Report MSME Payment Delays Over 45 Days [Read Notification]
MSME Ministry mandates companies to report payments delayed beyond 45 days to micro and small enterprises
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The Ministry of Micro, Small and Medium Enterprises ( MSME ) issued Notification No. S.O. 1376(E) dated March 25, 2025, directing all companies that procure goods or services from Micro and Small Enterprises (MSEs) to report any payment delays exceeding 45 days from the date of acceptance or deemed acceptance of supplies. The notification, published in the Gazette of India, is issued...
The Ministry of Micro, Small and Medium Enterprises ( MSME ) issued Notification No. S.O. 1376(E) dated March 25, 2025, directing all companies that procure goods or services from Micro and Small Enterprises (MSEs) to report any payment delays exceeding 45 days from the date of acceptance or deemed acceptance of supplies.
The notification, published in the Gazette of India, is issued under the powers conferred by Section 9 of the MSME Development Act, 2006, read with Section 15 of the same Act. It seeks to enhance financial discipline among buyers and ensure timely payments to micro and small suppliers, which are often the most vulnerable in the supply chain.
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Key Compliance Requirements:
Under the notification, companies must submit a half-yearly return to the Ministry of Corporate Affairs (MCA) disclosing:
- (a) The total amount of payments due to MSE suppliers; and
- (b) The reasons for the delay in making such payments.
This reporting requirement applies specifically when the payment is outstanding for more than 45 days after goods or services have been accepted (or deemed accepted) by the buyer.
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Delayed payments have been a long-standing issue for small businesses, often affecting their operations and survival. By enforcing this disclosure, the government intends to increase transparency and encourage timely settlement of dues.
As per Section 15 of the MSMED Act, buyers are required to make payment to MSEs within 45 days of acceptance of goods or services. Section 9 empowers the Central Government to take steps to promote and develop the sector, including policy-level interventions like this mandatory reporting.
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The notification is expected to serve as a compliance checkpoint and may lead to further regulatory scrutiny or penalties for companies consistently delaying payments without valid reasons.
To Read the full text of the Notification CLICK HERE
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