Feb and March are the months to clear the 43B(h) MSME payments…

so, common, similar to last year…… Be Alert …and do the needful

This article has Some ideas and Tips in MSME 43B(h) – for Tax audit, for Balance Sheet for Advance tax and for Income Tax

Alert dated 27th February-2025 at — 4 pm,

Current Status of 43B(h)- for FY 24-25

The LAW = Same as last year… There is no Change

Section 43B(h): MSME 45 Days Payment Rule.

This  provision mandates that payments for goods or services provided by MSEs must be settled within 45 days from the date of acceptance.

If businesses fail to meet this deadline, they will be at a risk to claim these payments as tax deductions.

1. So. Yes the Law is Real
2. Yes, unpaid MSME dues will be DISALLOWED
3. AND YOU WILL HAVE TO PAY TAX AT FULL RATE.. SAY 26% OR 34%
4. Yes, there was no relief
5. There was no amendment
6. Yes, 2024 returns also went this way
7. Yes, MSME usually got a lot of payments from their customers this way
8. Yes, many companies had to pay steep taxes due to this section.
9. 

10. Nobody can save your company from accidental tax later .. if Govt catches you later on.

11. Have you made your Financial Budget to pay all eligible MSME vendor’s : Arrange Funds as soon as possible. Keep Buffer for new creditors, new invoices of this period.

so, for all the Corporate Accountants, and Corporate Auditors, and MSME businessmen, both as receiver of funds and payer of funds, Get Ready for that time of the year…

1. Hope you have started the work ?
2. Hope the vendor identification has been done ?
3. Hope your team has started the checking of Vendor MSME status on the Govt website ( that is the only evidence ) … keep that screenshot or PDF
4. Hope you have planned to pay  all MSME vendors bills of 29-2-2025, by 15th April 2025…..

5. Hope your MSME vendors Bills upto 15th March 2025 are also paid between 20th and 30th April 2025.. 

6. Hope your planning includes MSME vendors Bills upto 31st March 2025  are also paid between  30th April and 10th May 2025. (Just to be safe)…

7. See this yourself.

8. Also remember to clear all the MSME dues…
9. Short cut :Vigilance point
10. 5th March by 5th April ( start the process by 30th day.. so that you are safe bye 45th day )
    10th March by 10 April
    15th March by 15th April
    20th Mar. by 20th April
    25th Mar by 25th April
    31st March… by 30th April( I have kept a Buffer )
11. 
12. If you are an MSME … you might have been benefited from this in the March payment wave, So, similarly, the WAVE continues

13. This is a benefit Govt is giving to MSME’s and if you are a MSME take this benefit from your customers….

14. Almost 4 Crores MSME are already registered and are claiming this benefit… are you taking this Benefit ???

Sent letters to all creditors ? Kept evidence ? Two rounds of emails is a must evidence. ?

Do you have letters or MOU with each MSME vendor, … with overriding clause for 45 days, irrespective of the PO’s and Invoices. ( get the format in the Google drive link below )

1. Reduce your advance tax ? Pay MSME in Advance ??. …. yes possible ( most likely.) But conditions apply. Risk involved. But likely due to a past Supreme Court Judgement … but Risk is yours.. since law also says.. if otherwise available… since this is not otherwise available… so.. ?
2. Section 43B(h)  

3. Sales Idea.. if you have power to do more sales, and have sufficient funds : Deregister in MSMED Act…. give affidavit to your Potential Customers… “Get More Sales” and “Get more Margin”

   

4. Non Registered MSME Vendors ….? The Udhyam Adhar is compulsory. No need to see the Balance Sheet, or take a CA Certificate. Not relevant and not required.

5. Past or Future ? Future bills only ( old bills prior to 1-4-2023 are not in problem in this section.. they are problem in section 41 .. with bigger consequences …… Since they are like … why unpaid… why are you not paying… are they not a liability at all ?????

   

6. Three year MSME category Rule notification dt 18-10-2022.. Change of category upwards… you can take the benefit of previous classification for three long years. Yes you can. ( see notification in the Google drive link below )

1. Cheque Hand over   ( Cheque in Transit ?)……….? This idea can work only if you have 100% clear balance in your bank account… Else… It will not be acceptable. 

2. Money is coming automatically to most MSME’s .. every day… Congratulations, if you are the beneficiary too.

3. Hope the PSU’s also start paying in the same way. The PSU chief will be shocked with huge tax if he does not organise the payments to all the MSME vendors in time… this will create a new culture.

Ideas, Tips, things to take care of… MSME act related 43B(h) income tax topic . Good ideas you can work around with and make more money.

Google Drive link for the Powerpoint presentation , Copies of Letters, Emails, MOU.. as discussed in the Session by Mr Sangeet Kr Gupta. in the last Zoom seminar

MOU copy inside

43B(h) benefit ? 43B(h) action ? 43B(h) what to do ? 43B(h) safety ? 43B(h) annexure ? 43B(h) when to follow ? 43B(h)penalty? 43B(h)areyousafe?

How to do this in Finsys ? Very simple… Just ask the accounts to take out the Vendor Outstanding report.. in Future date… say 1st May 2024… and see what will come as overdue on that date… all those invoices are fit to start processing.. so that you are safe.. by 1st May and so on….

Team at your service.. Contact us page

Ideas MOU format letter format … uploaded on the google drive link above

What is the current position in 2025. What to do now ? MSME act related 43B(h) income tax topic . Good ideas you can work around with

LWF Labour Welfare Fund Haryana –

Due Date of LWF Haryana

and Benefits of Labour Welfare Fund Haryana

Isn’t Vendor’s bill sufficient?

A big

As how can you know while checking it by yourself and Auditing  –

The concerned party has claimed ITC or not ? or if it all goes in expenses.

If claimed, hasn’t taken ITC C or S in I or…ITC I in C or S ?

If TDS has been deducted or not ?

Which section’s TDS has been deducted or wrongly deducted 2% TDS rather than 10% TDS or vice-versa ?

0.1% has been deducted or not ?

If you have printout it’s easy to check,understand and approve the Audit.

For more such information listen the video below by – Mr. Sangeet Kumar Gupta, F.C.A and Co-founder of Finsys .