Description
Taxmann FAQs on Timely Payments to MSME – An Interplay between Sec. 43B(h) of the Income-tax Act and MSMED Act edition 2025 by Srinivasan Anand G.
This book is a specialised guide explaining how the newly introduced provisions under Section 43B(h) of the Income-tax Act affect payments to Micro and Small Enterprises (MSEs). It also discusses how these provisions converge with the long-standing requirements of the MSME Development Act, 2006 (MSMED Act), particularly on timely settlement of dues and the consequences of non-compliance. It aims to provide in-depth clarity on every significant question and challenge that could arise while interpreting or applying Section 43B(h), especially from the buyer's perspective. It incorporates flowcharts, ready reckoners, illustrative case studies, and practical checklists.
This book is intended for the following audience:
Chartered Accountants, Company Secretaries & Cost Accountants – For advising and auditing compliance with Section 43B(h) of the Income-tax Act, MSMED Act disclosures, and interest liabilities
Tax Practitioners & Legal Professionals – For representing clients' cases and ensuring adherence to statutory obligations under both tax laws and MSME provisions
Finance & Accounting Teams, CFOs – For internal policy framing, guiding timely settlement of invoices from MSE suppliers, and mitigating disallowances under Section 43B(h)
MSME Entrepreneurs & Business Owners – To understand the legal protections afforded to MSEs and the new compliance obligations imposed on their customers
Students & Academicians – For a comprehensive understanding of emerging topics in tax and MSME legislation
The Present Publication is the 2025 Edition, authored by CA. Srinivasan Anand G. This book is amended upto 30th March 2025, with the following noteworthy features:
[Comprehensive FAQs] Clear, succinct answers to frequently asked questions, covering everything from the definition of micro and small enterprises to complex issues of delayed payments and interest calculation
[Flowcharts & Visual Aids] Easy-to-follow flowcharts outlining the compliance steps, especially highlighting the interplay between Section 43B(h) and the MSMED Act's provisions on payment timelines
[Ready Reckoner & Checklists]
An alphabetical ready reckoner for quick reference to FAQs and crucial legal concepts
Practical checklists for buyers to ensure foolproof compliance in dealing with MSE suppliers
Dedicated checklists for micro and small enterprises, enabling them to safeguard their rights under the MSMED Act
[Illustrative Audit Checklist] Specially designed checklist for auditing trade creditors, ensuring that auditors can efficiently spot and report potential disallowances under Section 43B(h)
[Case Studies & Practical Scenarios] Examples illustrating the calculation of due dates, handling of delayed payments, and the interplay of interest liability under the MSMED Act and disallowance under Section 43B(h)
[Updates on MSME Provisions] Covers the latest definitions, clarifications, and notifications under the MSMED Act, including Udyam Registration norms, classification criteria (investment and turnover), and allied documentation
[Timely Topic] The book addresses a pressing need in the tax and business landscape post-introduction of Section 43B(h), ensuring stakeholders are well-informed of the newer compliance obligations and potential pitfalls
[Focus on Practical Application] Written in plain language with ample examples, the content is not only theoretically grounded but also highly practice-oriented
[Authoritative & Trusted] Authored by CA Srinivasan Anand G. and published by Taxmann, both known for their reliable and comprehensive coverage of tax and corporate laws
[Essential for All Scales of Business] Whether an entity is a leading corporation or a medium-sized firm, timely payment compliance to MSMEs is now integral to avoiding disallowances and preserving goodwill
The coverage of the book is as follows:
Legal Landscape & Background
Objects and rationale behind Section 43B(h)
Historical approach to MSME payment timelines and how Section 43B(h) augments the MSMED Act
Applicability & Interpretation
Detailed guidance on which buyers (companies, firms, charitable trusts, etc.) must comply with Section 43B(h)
Nuanced explanations on whether unregistered MSEs fall under the purview of these provisions
Payment Timelines & Disallowances
Step-by-step walkthrough of payment due dates under Section 15 of the MSMED Act
The chain of consequences when payments to MSE suppliers are delayed
How to compute disallowances under Section 43B(h), and the circumstances for reversing these disallowances upon actual payment
Interest Under Section 16 of the MSMED Act
Clarification on interest liability triggered by late payments
Intersection with disallowances under Section 23 of the MSMED Act
Disclosure Requirements & Audit Concerns
Mandatory disclosure of amounts due to MSEs in the buyer's annual accounts under Section 22
Comprehensive coverage on reporting requirements in the Tax Audit Report (Form No. 3CD) with particular emphasis on Clause 22
Practical Ready Reckoners & Checklists
Alphabetical reference for critical terms and concepts
Buyer's checklist to ensure compliance and avoid potential penal interest or disallowances
Checklist for MSEs to leverage their legal safeguards
Appendices & Reference Materials
Relevant statutory provisions (excerpts from the Income-tax Act and the MSMED Act)
Notifications, circulars, and office memoranda related to MSME registration, classification, and benefits
The structure of the book is as follows:
Chapter-wise FAQs – Organised by thematic sections, each chapter deals with a distinct aspect of Section 43B(h) or the MSMED Act—such as definitions, applicability, interest liabilities, etc.
Alphabetical Ready Reckoner – A quick index to jump to specific topics or commonly encountered queries
Practical Insights Section – A separate elaboration focusing on practical scenarios, methods to identify MSE suppliers via Udyam Certification, and the critical do's and don'ts in payment workflows
Checklists & Flowcharts – Embedded within the chapters to guide readers through step-by-step compliance procedures and best practices
Appendices – Consolidates statutory extracts, government notifications, and clarifications, making it a one-stop resource for legal reference