MSME 45-day payment checker, section 43B(h)

• Only micro and small enterprise suppliers are covered (MSMED Act s.2(n), s.15). Medium enterprises and vendors with an unknown category are not tested.
• Pure traders are not covered: s.2(e) defines an enterprise as a manufacturer or service provider, and the Office of DC (MSME) has said retail and wholesale traders on Udyam get priority sector lending only. A vendor whose type is unknown is tested, with a warning.
• The vendor held a valid Udyam registration on the date of supply. Charter does not check registration dates.
• With no acceptance date, the invoice date is taken as the day of acceptance (deemed acceptance is the day of actual delivery or rendering of service when there is no written objection within 15 days). Use the delivery date where it differs.
• A written agreement sets the period only if the agreed days are provided; the period is then capped at 45 days. Without an agreement, the last day to pay is 15 days after acceptance.
• The deduction stays in the year the invoice is booked only if the sum is paid within the s.15 time limit, or is paid before year end. An amount outstanding at year end and not paid by its due date (even when the due date falls after year end) is disallowed for that year and allowed in the year of actual payment. An amount unpaid at year end whose due date is still ahead on the as-on date is shown as at risk, not disallowed.
• The invoice belongs to the financial year that contains its invoice date.
• Payments are applied to the invoice principal in date order. No interest is assumed to have been paid or waived. Each late tranche accrues s.16 interest separately from the day after the due date to its payment date; unpaid amounts accrue to the as-on date.
• s.16 does not say on which date the bank rate is read. By default the rate in force on the first day of interest is used for the whole period; the 'each month' option reads the rate at the start of each monthly rest.
• Monthly rests fall on monthly anniversaries of the due date; a part-month at the end is simple interest at 3 x rate x days / 365.
• s.16 interest is shown for information. It is a liability to the supplier, not a tax deduction.

• MSMED Act 2006 (Gazette text) s.2(b), 2(e), 2(n), 15, 16, 17(opens in a new tab)

  Appointed day, deemed acceptance, 45-day cap, supplier definition, compound interest at three times the bank rate.

• Office of DC (MSME): FAQs on delayed payments to MSEs(opens in a new tab)

  Interest runs from the appointed day, or the agreed date if 45 days or less, or 45 days from acceptance; three times the RBI bank rate, monthly rests.

• Office of DC (MSME) OM on traders and delayed payments (Sep 2021, ref 1I4(1)/2021-P&G/Policy)(opens in a new tab)

  Retail and wholesale traders on Udyam are limited to priority sector lending; delayed payment provisions are excluded.

• Income-tax Act 1961 s.43B(h), inserted by the Finance Act 2023(opens in a new tab)Not yet verified

  A sum payable to a micro or small enterprise beyond the s.15 limit is allowed only in the year of actual payment.

• Income-tax Act 2025 s.37(2)(g) (counterpart of s.43B(h), from 1 Apr 2026)(opens in a new tab)Not yet verified

  Same rule for tax years from 2026-27. Only a secondary site was readable; confirm against the Act 2025 text.

• RBI Bank Rate (MPC press releases)(opens in a new tab)

  Bank Rate history in RBI_BANK_RATE_HISTORY, one source URL per row.

Confirmed against RBI releases up to 6 Feb 2026. A rate holds until the next row.