Notification S.O. 5575(E), dated 12 October 2026, brought most of the Micro, Small and Medium Enterprises Development (Amendment) Act, 2026 into force on 15 October 2026. One more section, on the make-up of MSE Facilitation Councils, starts on 15 December 2026. The changes to mediation and arbitration timelines and award enforcement (sections 8 to 10 of the amending Act) have no start date yet.
What changed on 15 October
- Filing a memorandum for MSME registration is now free and voluntary for all MSMEs, including medium manufacturers, who earlier had to file.
- Every Central Public Sector Enterprise must route payment of MSME supplier invoices through an RBI-authorised TReDS platform, in a manner the Centre will set by rules.
- A buyer that does not disclose unpaid MSME dues in its annual accounts gets a warning first, then a penalty of ₹10,000 to ₹50,000, then a fine of ₹50,000 to ₹1 lakh for further breaches.
- The Act now says MSMEs are classified by investment and turnover together, with limits set by notification. No new limits have been notified, so the current limits continue.
What to do
- Keep disclosing MSME dues in your accounts. The 45-day payment rule in section 15 is unchanged.
- Companies with dues to micro or small suppliers outstanding beyond 45 days still file MSME Form 1 for April to September 2026 by 31 October 2026.
- If you supply a CPSE, register on a TReDS platform.
New to MSME registration? Read our Udyam registration guide.
Sources: S.O. 5575(E), Gazette of India, Taxguru.
