MSMED Section 43B(h) 45-day tracker
A payment to a registered micro or small supplier that crosses forty-five days is disallowed as a deduction. This counts the days while you can still do something about it.
For USA manufacturers with India operations, India-based contract customers, or manufacturers exporting to India.
In short
The MSMED Section 43B(h) tracker watches payments to registered micro and small enterprise suppliers against the statutory 45-day window inside KanchanFlow, and shows the deduction exposure building before year end. It is in development with a Wave 1 Milestone 3 target and, like every India regulatory feature here, is included on every tier.
What it is
Section 43B(h) of India's Income Tax Act disallows a deduction for amounts owed to registered micro and small enterprises that are not paid within forty-five days. The consequence is not a fine, it is a larger tax bill, and it usually arrives as a surprise from the auditor months after the payments were missed.
The tracker classifies suppliers by their Udyam registration, counts days from the acceptance of goods or services, and shows which invoices are approaching or past the window along with the deduction exposure attached to them. The point is to make the number visible in week five, not in the following October.
Capabilities
What it does
Supplier classification by Udyam registration
Suppliers carry their registration and classification — micro, small, medium or unregistered — because the rule only bites for registered micro and small enterprises.
Day counting from the right date
The clock runs from acceptance of goods or services, not from the invoice date or the date somebody entered it. Getting the start date wrong makes the whole count wrong.
Approaching and breached buckets
Invoices within the window, approaching the limit and past it are separated, so the list you act on is short and specific.
Deduction exposure figure
The rupee value of amounts that would be disallowed if unpaid at year end, rather than a count of invoices. That figure is what gets attention.
Advanced exposure calculator on Enterprise
Enterprise adds scenario analysis across entities — what the exposure becomes if a payment run slips a fortnight — on top of the same underlying data.
Step by step
How it works
The order these steps happen in matters more than the feature list above it.
- 1
Classify your suppliers
Record each supplier's Udyam registration and classification. GSTIN validation on the vendor record supports this, and unregistered suppliers are marked as such.
- 2
Record acceptance
The day count starts from acceptance of goods or services. Recording that date is the step most manual processes skip, and it is the one that matters.
- 3
Watch the buckets
Invoices to registered micro and small suppliers sit in within-window, approaching and breached buckets, updated daily.
- 4
Act before day forty-five
The approaching bucket is a payment run instruction. Acting there is the whole purpose; the breached bucket is already a cost.
- 5
See the exposure
The running deduction exposure shows what would be disallowed at year end on current behaviour, so the conversation happens in month three rather than month eleven.
What this is not
This is not tax advice or a computation of your tax liability — we track the payment window and show exposure, your accountant determines the treatment.
This is not an ERP, MRP, CAD, BOM, or advanced CPQ system — it manages customer RFQs, quotes, follow-ups, and order handoff.
Tier availability
What you get on each plan
These rows come from the same feature matrix the pricing page publishes. If the two ever disagree, the matrix is wrong and we fix it.
| Plan | Availability |
|---|---|
| Starter | Included. Never an add-on, never a tier gate. |
| Professional | Included. Same tracker as Starter. |
| Enterprise | Included, plus the advanced exposure calculator and multi-entity scenario analysis. |
Starter is $39 per user per month, Professional $49, Enterprise $99 plus a $2,000 monthly platform fee. Annual billing is 17% lower. See the full matrix.
Interface
What it looks like
Development build of the 43B(h) dashboard with invoices grouped into within-window, approaching and breached, and the running exposure figure.
Development build capture. Supplier names and amounts are sample data.
Development build of a supplier record showing Udyam classification and the payment history against the 45-day window.
Development build capture, not production.
Screenshots are described rather than mocked up. Captures are taken from the build current at the date shown in the changelog, on a sample workspace.
Connectors
Integrations this feature uses
Starter includes one accounting connector and one lead source; Professional and Enterprise include all of them. Browse every integration.
Questions about msmed 43b(h) tracker
Because USA manufacturers with India operations or India-based contract suppliers are exposed to it, and the exposure is invisible until an auditor raises it.
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