Draft MRL letter for Payment to MSEs disallowance u/s.43B(h)
On Letterhead of Client]
To,
[Name of the Auditor]
[Address of the Auditor]
Date: [Date]
Sub: Management Representation Letter relating to allowability of payment to registered Micro or Small Enterprise for the Financial Year ended 31st March, 2024
Dear Sir/Madam,
This representation letter is provided in connection with the audit of the financial statements of [Company Name] for the year ended 31st March, 2024 for the purpose of expressing an opinion on the truth and fairness of the financial statements.
We confirm to the best of our knowledge and belief, having made appropriate inquiries and performed necessary verification, the following:
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We have classified all suppliers as registered Micro or Small Enterprises based on the records available with us and information received from suppliers, in accordance with MSMED Act 2006 and verified the classification thereof on the Udyam portal.
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We are not aware of any suppliers other than those considered in the Section 43B(h) compliance.
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The credit period considered for the purpose of disallowance under Section 43B(h) is appropriate as per the mutual contract or agreement and is based on Invoices, Purchase Orders, Agreements, or other relevant documents.
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We have made payments to such identified suppliers generally within the time limits specified under Section 15 of the MSMED Act, 2006, except for a few cases.
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Due to the voluminous nature of transactions, we are unable to determine the amount of interest payable under Section 16 of the MSMED Act. Additionally, based on the mutual contracts and past practices, no interest is deemed payable for delayed payments, and hence no provision has been created.
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The amount disclosed as inadmissible in Clause 22 of Form 3CD is complete and accurate in accordance with the requirements of the clause.
We trust that the above information meets your requirements. Should you need any further details or clarifications, please feel free to reach out.
Thanking you.
Yours faithfully,
For [Company Name]
[Name of the Authorized Signatory]
[Designation]
[Date]
Paragraphs that can be included alongwith other paras in MRL
We confirm that the classification of suppliers as Micro or Small Enterprises has been done based on records available with us and information received from suppliers, in accordance with MSMED Act 2006 and verified the classification thereof on the Udyam portal. To the best of our knowledge, there are no other suppliers that should be considered for compliance under Section 43B(h) of the Income Tax Act, 1961.
The credit period considered for the purpose of disallowance under Section 43B(h) is appropriately determined based on mutual contracts or agreements, considering the terms specified in the invoices, purchase orders, agreements, or other relevant documents.
We affirm that payments to such identified suppliers have generally been made within the time limits prescribed under Section 15 of the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, except for a few cases. Given the high volume of transactions, it is not feasible for us to accurately calculate the interest payable under Section 16 of the MSMED Act for such cases. Moreover, based on mutual contracts and established practices, no interest is payable for delayed payments; hence, no provision has been created for the same.
The amount disclosed as inadmissible under Clause 22 of Form 3CD is complete and accurate, in accordance with the requirements of the clause.