(THE NEWSMAN OF INDIA.COM)
New Delhi, March 26, 2025 – The Central Government has announced a new directive requiring companies to submit a half-yearly return to the Ministry of Corporate Affairs if their payments to micro and small enterprises (MSEs) exceed forty-five days. This move aims to ensure timely payments and improve financial transparency for MSE suppliers.

Under the new rule, companies that procure goods or services from MSEs and whose payments exceed the 45-day period from the date of acceptance or deemed acceptance of the goods or services, must report the following details in a return submitted every six months:

1. The amounts of payments due to the micro and small enterprises.
2. The reasons for the delay in making the payments.

This decision highlights the government’s commitment to addressing the issue of delayed payments, which has been a long-standing challenge for micro and small businesses. Many MSEs struggle with cash flow due to prolonged payment cycles, which can affect their operations and growth.

The requirement aims to increase accountability among large companies and ensure that outstanding dues to MSE suppliers are cleared in a timely manner. By mandating this reporting, the government hopes to encourage more responsible payment practices and enhance the financial stability of micro and small enterprises.

This initiative is part of the government’s ongoing efforts to support the MSE sector, which plays a critical role in the country’s economy. It complements other measures designed to make it easier for MSEs to operate, such as simplifying registration processes and promoting fair treatment in business transactions.

The Ministry of Corporate Affairs will monitor the returns submitted by companies and ensure compliance with the new directive. This move is expected to foster a more transparent business environment, where larger companies are held accountable for the financial well-being of their smaller suppliers.

Through this regulation, the government aims to strengthen the foundation of micro and small enterprises in India and contribute to their long-term growth and sustainability.