Complexities of financial compliance, particularly the newly introduced clause (h) in Section 43B, demands meticulous preparation and organization. This comprehensive guide aims to simplify the process for CFOs, return filers, and auditors, ensuring seamless reporting and adherence to regulatory standards.
1. Identify your clients on the following basis: –
- Audit cases
- Non-Audit cases ITR
- Section 44AD/44ADA cases ( No list to be prepared in this since 43B not applicable)
2. Preparing list of creditors* including: –
- Creditors
- Payables
- Provisions
- Cheques issued but not presented
Please mention name of the Parties against each amount
3. Please Bifurcate the above list of creditors in following categories: –
|
Name of Party |
a. MICRO OR SMALL | b. Who have not intimated their status | c. MEDIUM | d. Registered under clause 45, 46 and 47 as trader |
| Step 1. Mention:
Date of bill or invoice in case of services. Date on which delivery of goods received. Step 2: – If payment is made within 15 days of settlement then no action required. STEP 3: Date of all unpaid creditors exceeding 15 days Step 4: – Check agreement for payment to be made within 45 days is available Keep a record of those above agreements Step 5: – All those whose agreement are not available please collect agreement if possible. Step 6: – Check if any communication with party is made regarding quality/ quantity/ rate issue. Check for issue of such communication and settlement thereof. Records of all communications above shall be kept. Step 7: In case of payment by cheque in last week of march and Cheque presented latter Obtain receipt of cheque with date from the supplier and allow only those payments which have been encashed within reasonable time (it is your prudence). |
1. Check if any mail/ regd letter sent by the entity.
2. Make a record of the communications sent by the entity. 3. Arrange to send communication to those whom not sent earlier |
No Action to be taken on these Suppliers | ||
Documents to be available with you:-
1. Mail or letter sent to suppliers.
2. MSE certificates received from suppliers
3. Payment terms agreement.
4. Correspondence with supplier regarding quality/ quantity or rate dispute and settlement thereof.
*(Opening balances, creditor for capital goods not to be considered)
Important Note:
Auditor should take a note of it that any supplier who has informed his MSME status and not paid
within 15/45 days can report the matter to MSME/ income tax authorities.
Conclusion
In today’s regulatory landscape, ensuring compliance with Section 43B(h) demands a systematic approach and meticulous record-keeping. By following this step-by-step guide, CFOs, auditors, and return filers can navigate the complexities with confidence, ensuring both regulatory adherence and operational efficiency.
Author Bio
