The Government has directed all companies to file a half-yearly return regarding delay in payments to micro and small enterprises beyond 45 days, a gazette notification said.
As on March 26, 2025, the MSME Samadhaan portal had over 97,000 applications of MSE (Micro and Small Enterprises) related to pending dues aggregating to over ₹21,600 crore. The amount includes dues from Central Ministries/ Departments such as the Railways, Public Sector Enterprises, State Governments and individuals.
“In exercise of powers conferred by Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), and read with Section 15 of the said Act, the Central Government hereby directs all companies who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty-five days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of the said Act, shall submit a half-yearly return to the Ministry of Corporate Affairs stating the following: (a) the amounts of payments due; and (b) the reasons for the delay,” the notification dated March 25 said.
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According to the MSMED Act, 2006, the buyer is liable to pay compound interest with the monthly rests to the supplier on the amount at three times the bank rate notified by RBI in case he does not make payment to the supplier for his supplies of goods or services within 45 days of the acceptance of the goods/ service rendered. The Act also prescribes State Governments to establish a Micro and Small Enterprise Facilitation Council (MSEFC) for settlement of disputes on getting references/ filing on delayed payments.
Micro and Small Enterprises (MSEs) can file applications regarding delayed payments on MSME Samadhaan, which is a government portal. Once filed, the application is forwarded to the concerned Micro and Small Enterprise Facilitation Council (MSEFC) established by the State/ UTs. Action on applications regarding delayed payments is taken by the concerned MSEFC only.
As per the provisions of the MSMED Act, 2006 and the Supreme Court judgement, the benefits of MSME registration cannot be taken retrospectively. Hence, prior registration of the enterprise before the date of disputed invoice is mandatory for filing an application.
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The issue relates to delayed payments for MSE, highlighted in a big way in the Union Budget of 2023-24, when Finance Minister Nirmala Sitharaman said: “To support MSMEs in timely receipt of payments, I propose to allow deduction for expenditure incurred on payments made to them only when payment is actually made.” Accordingly, Finance Act 2023 inserted a new clause in Section 43B of the Income Tax Act that prescribes that companies not making payments to micro and small enterprises during a fiscal year will have to wait for a full year for deductions under the IT Act.
On July 15, 2024, the Corporate Affairs Ministry added a proviso in the Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019. It prescribes that “only those specified companies which have payments pending to any micro or small enterprise for more than 45 days from the date of acceptance or the date of deemed acceptance of goods or services under Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006, shall furnish the information in MSME Form-1.”
