Question 1

Which enterprises are covered by Section 43B(h)?

Accepted Answer

Only micro and small enterprises registered under the MSMED Act. Medium enterprises and unregistered suppliers are not covered.

Question 2

What is the 15 vs 45 day rule?

Accepted Answer

If there is no written agreement, payment is due within 15 days of acceptance. If there is a written agreement, the credit period cannot exceed 45 days.

Question 3

What does disallowance mean?

Accepted Answer

The expense is not allowed as a deduction in the year of the invoice. It becomes deductible only in the financial year when the payment is actually made.

Question 4

How does this interact with MSMED Act interest?

Accepted Answer

If you pay late, you may also owe interest under Section 16 of the MSMED Act. Use our MSME Interest Calculator for that.

Question 5

From which year is Section 43B(h) applicable?

Accepted Answer

It applies from FY 2024-25 onwards.

Section 43B(h) MSME Payment Deadline Tracker

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