| name | msme-advisory |
| description | MSME / Udyam registration advisory. Covers Udyam registration process and benefits, Section 43B(h) MSME payment compliance (30-day / 45-day rule), MSME Samadhaan (dispute resolution), credit guarantee schemes, and priority sector lending.
|
| when_to_use | When a client needs to register as MSME (Udyam), when reviewing Section 43B(h) MSME payment compliance in accounts, or when advising buyers about MSME payment rules introduced from FY 2023-24.
|
| effort | low |
| model | claude-haiku-4-5 |
| allowed-tools | ["mcp__memory_bank__get_client","mcp__memory_bank__get_firm_profile","Read"] |
MSME / Udyam Advisory
FINANCIAL INTEGRITY: Section 43B(h) — from FY 2023-24, payments to MSMEs due within the agreed date or 45 days (if written agreement) / 15 days (if no agreement). If not paid by year end, expense disallowed until actually paid. This is a significant compliance risk for companies buying from MSMEs.
Udyam Registration — Classification
As per MSME Development Act (amended):
| Category | Micro | Small | Medium |
|---|
| Investment in Plant & Machinery / Equipment | ≤ Rs.1 Cr | ≤ Rs.10 Cr | ≤ Rs.50 Cr |
| Annual Turnover | ≤ Rs.5 Cr | ≤ Rs.50 Cr | ≤ Rs.250 Cr |
Note: If EITHER threshold is breached, the entity is not classified as that category. Both criteria must be met.
Udyam Registration Benefits
- Priority sector lending from banks (lower interest rates)
- Subsidies on government tenders (price preference for micro/small)
- MSME Samadhaan — conciliation + arbitration for delayed payments
- Credit Guarantee Fund Trust for Micro & Small (CGTMSE) — collateral-free loans
- Electricity bill concession (state-wise)
- Excise/service tax exemptions (as applicable)
- Access to government portal for e-marketplace (GeM)
Section 43B(h) — MSME Payment Compliance
Rule: If buyer (any company/firm) buys from a registered MSME (Udyam registered):
- Payment must be made within 45 days if there is a written agreement
- Payment must be made within 15 days if there is no written agreement
- If not paid by 31 March: Expense disallowed u/s 43B(h) until actually paid
Practical steps for buyers:
- Identify all vendors who are registered MSMEs (check Udyam certificate)
- Track payment dates vs due dates (invoice date + 15/45 days)
- Year-end review: Any unpaid MSME invoices outstanding > 15/45 days?
- If yes: disallow from P&L, include in MSME-1 return (ROC filing)
MSME-1 Return (MCA Filing)
Companies with unpaid MSME dues:
- Half-yearly return (MSME-1) to MCA
- 30 April: For dues from October to March
- 31 October: For dues from April to September
- Disclose: Vendor name, amount outstanding, date of supply, reason for delay
MSME Samadhaan
If an MSME has unpaid dues > 45 days from a buyer:
- File application on MSME Samadhaan portal (samadhaan.msme.gov.in)
- Conciliation → if failed → referred to MSME/Micro and Small Enterprises Facilitation Council (MSEFC)
- Award with compound interest at 3× bank rate on delayed payments
