MSME NEW LAW PAYMENT WITHIN 45 DAYS

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A new law mandates that businesses must pay MSME suppliers within 45 days, regardless of any longer payment terms agreed upon in purchase orders or contracts. Failure to comply can result in compound interest penalties and disallowance of the payment as a deductible expense for income tax purposes.

Accounts Novagen

Accounts Novagen (Querist)
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26 February 2024 Sir

MSMe ka jo naya law he payment 45 days me karna hoga.
agar hamare purchase order me 90 days ka payment team he to bhi hame kya 45 days me payment karna hoga.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 February 2024 No it's not possible.
In case there is a written agreement, payment shall be made as per the agreed-upon timeline, not exceeding 45 days.

Accounts Novagen

Accounts Novagen (Querist)
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26 February 2024 Purchase Order me 90 din ka payment he and do no party ki sign bhi he. fir bhi hame 45 days me hi payment karna pade ga

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 February 2024 Yes, in this case also 45 days applicable.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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27 February 2024 Even if agreed period is more then also you need to pay in 45 days of there is any written agreement.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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16 August 2025 The law is clear: statutory 45-day payment period applies irrespective of any longer contractual terms for MSME suppliers. Compound interest at three times the RBI bank rate is payable on delayed payments beyond 45 days. Under Section 43B(h) of the Income Tax Act, such delayed payments cannot be claimed as a deductible expense unless actually paid within the statutory limit. Any contractual term that provides a longer payment period (e.g., 90 days) cannot override the statutory requirement.

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