Does the rule cover services, or only manufactured goods?

Both. Section 43B(h) and the Section 15 and 16 provisions cover micro and small enterprises that provide services as well as those that manufacture goods.

How do I confirm a supplier is a registered MSME?

Ask for the supplier's Udyam Registration Number and category. The protection applies only if the supplier was registered as micro or small at the time of the supply.

Does it matter if the buyer is not a company?

The 45-day duty and the Section 16 interest apply to any buyer. Only the MSME Form 1 disclosure is limited to companies.

Does the MSME 45-day payment rule apply to your business?

Does the 45-day rule apply to traders?

No. The Section 15 and 16 delayed-payment protections and the Section 43B(h) income-tax disallowance apply to micro and small enterprises that manufacture goods or provide services, not to wholesale or retail traders.

Traders can hold Udyam registration, but it is recognised only for priority-sector lending — so an amount owed to a trader is outside the delayed-payment provisions.

Does it apply to medium enterprises?

The delayed-payment protection under Sections 15 and 16, and the Section 43B(h) disallowance, apply to micro and small suppliers — not to medium ones.

A company still reports dues to a medium enterprise through MSME Form 1, but the statutory interest and the income-tax teeth are reserved for micro and small suppliers.

What are the micro and small thresholds?

An enterprise is micro up to ₹1 crore of investment in plant and machinery and ₹5 crore of annual turnover, and small up to ₹10 crore of investment and ₹50 crore of turnover.

Both the investment and the turnover limit must hold for a category; crossing either moves the enterprise up. Classification is what decides whether a supplier is protected.

Does an unregistered supplier get the protection?

No. The protection depends on the supplier holding Udyam registration as a micro or small enterprise at the time of the supply.

A supplier that was unregistered when it supplied cannot invoke the MSMED remedies for that bill, even if it registers later.

Does the buyer's location or size matter?

No. The test is the supplier's registered status, not the buyer's — a buyer of any size, anywhere in India, owes a registered micro or small supplier the same 45-day duty.

So the question to ask about any bill is simply whether the supplier is a registered micro or small enterprise for that supply.

Questions

Does the rule cover services, or only manufactured goods?: Both. Section 43B(h) and the Section 15 and 16 provisions cover micro and small enterprises that provide services as well as those that manufacture goods.
How do I confirm a supplier is a registered MSME?: Ask for the supplier's Udyam Registration Number and category. The protection applies only if the supplier was registered as micro or small at the time of the supply.
Does it matter if the buyer is not a company?: The 45-day duty and the Section 16 interest apply to any buyer. Only the MSME Form 1 disclosure is limited to companies.

This guide is general information, not legal or tax advice. Confirm the current rules and your own circumstances for any specific case.