NEW DELHI: Small businesses supplying goods and services to central public sector undertakings (CPSUs) will get their dues cleared faster under proposed amendments to the MSME Development Act, 2006, introduced in Parliament Tuesday, that seek mandatory digital invoicing, stronger protection against delayed payments and faster settlement of disputes.The move is aimed at improving liquidity and reducing the long waiting period that often leaves small businesses short of working capital despite having completed their supplies or services.The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, seeks to update the Act of 2006 by simplifying registration and compliance, strengthening payment-related safeguards and decriminalising certain offences. Under the proposed changes to the law, all invoices raised by MSMEs on CPSUs will have to be routed through TReDS – an electronic platform that helps small businesses turn unpaid customer invoices into immediate cash.State governments may impose a similar requirement for invoices raised by MSMEs on their public sector undertakings. To speed up resolution of payment disputes, states will be required to establish additional micro and small enterprise facilitation councils. The councils will have 3-5 members, with the inclusion of a legal expert becoming mandatory.The bill also proposes a free national digital registration platform for MSMEs. The common platform is intended to simplify registration and make it easier for businesses to access govt schemes, incentives and institutional support. A significant provision deals with appeals against awards passed in favour of MSMEs. A buyer challenging an award may be required to release at least 50% of the awarded amount if the case remains pending for more than six months.Courts will also be empowered to order payments to an MSME from the amount deposited by the buyer during the appeal.
