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MSME Samadhaan Portal: Section 43B(h) & 45 Days Rule Explained

Bullit Team | 2026-03-13

MSME Samadhaan Portal: Section 43B(h) & 45 Days Rule Explained

In Pune, Ramesh Patil runs a small fabrication unit. Last year, he supplied machinery components worth ₹18 lakh to a large buyer. 

Then the waiting for invoice clearance began. Thirty days passed, and then, eventually, sixty. 

By the time payment was finally received, nearly five months had passed. To keep operations running, Ramesh had already taken a short-term business loan at high interest just to pay his workers.

To him, this felt normal. “Large companies always delay payments,” he said. What Ramesh did not know is that the law does not treat this as normal.

This is where the MSME Samadhaan portal becomes important.

In this blog, we dive into the 45-day payment rule, section 43B(h), Samadhaan portal usability, and how MSMEs can file a complaint and seek resolution.

What is the MSME Samadhaan Portal?

The MSME Samadhaan Portal was introduced by the Government of India to address a problem that thousands of small businesses face every year: delayed payments from buyers.

It gives micro and small enterprises a structured way to raise complaints when buyers fail to pay within the legally permitted timeline under the MSMED Act.

In simple terms, the portal acts as the entry point for MSME delayed payment disputes.

The 45-Day Payment Rule Most Businesses Misunderstand

Ask most business owners about the 45-day MSME payment rule, and you will often hear the same answer.

“You always get 45 days to pay an MSME supplier.” That interpretation is incomplete.

Under Section 15 of the MSMED Act, the law works slightly differently.

If there is a written agreement, the buyer must pay within the agreed timeline. However, that period cannot exceed 45 days from the date goods or services are accepted.

If there is no written agreement, the law allows a maximum payment period of 15 days.

In other words, the law expects payments to MSME suppliers within 45 days at the absolute maximum.

Technically, businesses can agree to a shorter credit period. But legally, they cannot extend it beyond 45 days from the date of acceptance.

If payment crosses this limit, the consequences begin.

The buyer becomes liable to pay compound interest at three times the RBI bank rate, with interest calculated on a monthly basis.

So what appears to be a small payment delay can quietly become expensive. In most MSME delayed payment disputes, the key issue is not the invoice due date.

The real date that matters is when the buyer actually accepts the goods or services.

When Does the MSME Payment Clock Actually Start?

Many disputes under the MSME Samadhaan portal arise because businesses misunderstand when the payment timeline actually begins.

Under the MSMED Act, the payment clock does not start from the date printed on the invoice.

It begins from what the law calls the “day of acceptance” or “deemed acceptance.”

Here is how that works:  If the buyer raises a written objection within 15 days of receiving the goods or services, and the supplier resolves that issue, the acceptance date shifts to the day the objection is resolved.

But if the buyer does not raise any written objection within 15 days, the law assumes the delivery itself has been accepted.

This is known as deemed acceptance. In simple terms, silence becomes legal acknowledgment.

That is why documentation matters in any MSME Samadhaan delayed payment case. Records such as:

These determine when interest begins to accumulate. And once interest begins to build, many suppliers eventually turn to the MSME Samadhaan portal to initiate a formal complaint.

How does the MSME Samadhaan Portal Work?

Many suppliers assume the portal itself decides the dispute. That is not how the system works. The portal mainly serves as a digital filing platform.

Once a complaint is submitted through the MSME Samadhaan portal login, the application is automatically forwarded to the relevant Micro and Small Enterprises Facilitation Council (MSEFC) of the concerned state.

The council then handles the dispute through conciliation or arbitration.

Over time, the government has also introduced an MSME ODR portal (Online Dispute Resolution) to gradually move more cases into a fully digital resolution framework.

But before any complaint can be filed through the MSME Samadhaan scheme, one important condition must be satisfied - The supplier must have Udyam registration.

The MSME Samadhaan portal clearly requires that the supplier’s Udyam registration should exist before the invoice date being disputed.

If registration is obtained after the invoice date, the legal protection under the MSMED delayed payment provisions may become difficult to enforce.

To file a complaint through the portal, suppliers generally need to upload:

In cases where no written purchase order exists, suppliers may also be required to submit an MSME Samadhaan affidavit format explaining the transaction.

Once the complaint is submitted, the case moves to the next stage.

What Happens After Filing an MSME Samadhaan Complaint?

Once a complaint is submitted on the MSME Samadhaan portal, the dispute moves to the Micro and Small Enterprises Facilitation Council (MSEFC) of the respective state.

The council follows a structured process under Section 18 of the MSMED Act.

Step 1: Conciliation

The first step is conciliation.

The council attempts to bring both parties together to settle.

Many disputes are resolved at this stage once the buyer understands the statutory interest liability under the MSMED Act.

Step 2: Arbitration

If conciliation fails, the council can proceed with arbitration proceedings.

Under the law, the MSEFC acts as the arbitrator or may refer the matter to a designated arbitration institution.

The MSMED Act expects the dispute to be resolved within 90 days.

However, timelines may vary depending on the complexity of the case.

Step 3: Enforcement of the Award

If the council passes an award in favor of the MSME supplier, the buyer is required to comply with the order.

But the law adds an important restriction. If the buyer wishes to challenge the award before a court, the application is not entertained unless the buyer deposits 75 percent of the awarded amount.

This pre-deposit requirement significantly reduces frivolous challenges and strengthens the position of MSME suppliers.

For many businesses, this provision becomes the real leverage behind the MSME Samadhaan delayed payment framework.

However, the pressure on buyers does not come only from arbitration or interest liability. A new factor has recently entered the equation - Tax compliance.

This is where Section 43B(h) changes the financial consequences of delayed payments to MSMEs.

Understanding Section 43B(h) Impact on Buyers

Delayed payments to MSMEs used to be treated mostly as a cash flow issue.

Many buyers assumed they could stretch payments for a few months without serious consequences.

That assumption changed from 1 April 2024, when Section 43B(h) of the Income Tax Act came into effect. The amendment directly links MSME payment compliance with tax deductions.

Here is what that means:

If a buyer purchases goods or services from a micro or small enterprise and fails to pay within the timeline defined under Section 15 of the MSMED Act, the expense cannot be claimed as a tax deduction in that financial year.

Instead, the deduction is allowed only in the year when the payment is actually made. This creates a direct financial impact for companies following mercantile accounting.

Delayed payments can increase the company’s taxable income for the year, which means a higher tax outflow.

There is another important point that many buyers overlook - Interest payable under the MSMED delayed payment provisions is not allowed as a deduction under the Income Tax Act.

So a payment delay may trigger multiple consequences at once:

What used to look like a temporary working capital strategy now creates both legal and tax exposure.

For many finance teams, this has become the real reason to clear MSME dues within the 45-day MSME payment rule.

Conclusion

Delayed payments have long been one of the biggest challenges for small businesses in India.

For years, many MSME suppliers simply accepted late payments as part of doing business with larger companies.

But the legal framework has evolved. The 45-day MSME payment rule defines the maximum credit period. The MSME Samadhaan portal provides a formal dispute resolution pathway. And Section 43B(h) adds a tax consequence that buyers can no longer ignore.

Together, these provisions are slowly changing how payment discipline works across supply chains.

Explore more MSME insights and financial guidance at Bullit.