Government Requires Half-Yearly Reporting Of Delayed Payments To MSMEs

The Ministry of Micro, Small, and Medium Enterprises (MSME) has issued an important notification requiring certain companies to submit half-yearly reports on payments made to micro and small enterprise suppliers. This notification aims to improve transparency in the business interactions between large companies and smaller enterprises.

As per the notification, the government, under its authority granted by Section 9 and Section 15 of the MSME Development Act, 2006, has directed all companies sourcing goods or services from micro and small enterprises to adhere to more stringent reporting requirements.

Under Section 9 and Section 15 of the Act, companies that procure goods or services from MSMEs and fail to settle payments within 45 days of acceptance or deemed acceptance must file a half-yearly return with the Ministry of Corporate Affairs.

The return must detail the total outstanding amount and the reasons for the delay. This measure is intended to enhance payment transparency and ensure timely financial support for MSMEs.

The notification is effective immediately, with companies required to adhere to the new reporting requirements in their upcoming reporting cycle.

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