MSME Act Update: Half-Yearly Payment Reporting Now Mandatory!

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🏢📢 MSME Act Update: Half-Yearly Payment Reporting Now Mandatory!

📅 Notification Date: 25th March 2025
📜 Issued by: Ministry of Micro, Small and Medium Enterprises
🔍 Notification No.: S.O. 1376(E)

🧾 What’s the Update?

The Ministry of MSME has issued a new notification under the MSME Development Act, 2006, making it mandatory for all companies that purchase goods or services from Micro and Small Enterprises (MSEs) to file a half-yearly return if payments exceed 45 days.

⚖️ Legal Reference

📌 Section 9 – Grants the Central Government power to issue notifications and guidelines for MSME promotion.

📌 Section 15 – Requires that buyers must make payment within 45 days of acceptance or deemed acceptance of goods/services from MSEs.

📝 What Must Companies Report?

If your company delays payment beyond 45 days to an MSE, you must submit a Half-Yearly Return to the Ministry of Corporate Affairs (MCA) containing:

💰 Amounts of payments due
📄 Reasons for the delay

🔄 What Changed from Earlier Notifications?

📅 The previous notification dated 22nd November 2018 only cited Section 9 of the Act.
✅ The latest update (March 2025) now also includes Section 15, clarifying the legal basis for the 45-day payment rule.

✅ Why It Matters

🕒 Promotes timely payments to small businesses
📊 Enhances transparency and compliance in financial transactions
⚠️ Avoid legal penalties for non-compliance
🤝 Builds trust with MSE vendors

📌 Who Needs to File?

✔️ All Companies (Private or Public)
✔️ Who procure goods or services from Micro or Small Enterprises
✔️ And delay payment beyond 45 days