The MSME 45-day rule: how Indian small businesses can get paid on time
If you are a Udyam-registered micro or small enterprise, buyers must pay you within the agreed period, and never more than 45 days. Late payments attract compound interest at three times the RBI bank rate, and under Section 43B(h) buyers can't claim the expense for tax until they pay you. Put your Udyam number on every invoice and mention the 45-day term politely when you chase.
What the law gives you
The MSMED Act, 2006 (Sections 15 and 16) says a buyer must pay a micro or small supplier by the agreed date, and the agreed period can't be longer than 45 days. Without an agreement, it is 15 days.
Since FY 2023-24, Section 43B(h) of the Income Tax Act lets a buyer deduct a payment to a micro or small enterprise only in the year it is actually paid within that limit. Late payment can cost your customer a tax deduction — a strong reason for their accounts team to pay you first.
Set up your invoices
- Print your Udyam Registration Number and category (micro or small) on every invoice.
- Write the payment term clearly: “Payable within 30 days, per MSMED Act, 2006.”
- Add a UPI QR code or Razorpay payment link — fewer steps, faster payment.
- Keep the GSTIN, PO number and invoice number matching the customer's records.
A polite chasing routine
- Day 3 after due: friendly WhatsApp or email with the invoice and UPI link.
- Day 10: firm reminder, ask for a payment date, mention the 45-day limit.
- Day 30+: escalate to the owner or finance head; mention Section 43B(h) and interest.
- Still unpaid: you can file a case on the government MSME Samadhaan portal.
Copy-ready message
“Namaste Rohit ji — a gentle reminder that invoice INV-218 for ₹1,20,000 was due on 10 Oct. As a registered MSME, we'd be grateful for payment within the 45-day term. UPI link attached. Thank you!”
How Juno runs this for you
The Juno workspace will connect to Tally, Zoho Books and Razorpay. It will send reminders on email or WhatsApp in your tone, track which invoices are close to 45 days, and mark them paid when the money lands in your bank.
Questions
What is the 45-day payment rule for MSMEs?
Under the MSMED Act, 2006, buyers must pay registered micro and small enterprises within the agreed period, which can't exceed 45 days.
What is Section 43B(h)?
A rule from FY 2023-24 that lets buyers claim a tax deduction for payments to micro and small enterprises only when they pay within the MSMED Act time limit.
What can I do if a buyer still doesn't pay?
You can file a delayed-payment case on the MSME Samadhaan portal, which goes to the state's MSME Facilitation Council.
Hire Chaser to run this playbook.
Juno's AI finance team will run this every day, in your tone, with your approval on anything sensitive.
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