Firms with Rs 250 crore turnover rush to register on TReDS as March 31 deadline nears
TALK TO EXPERTS
Companies with an annual turnover of ₹250 crore are rapidly enrolling on the Trade Receivables Discounting System (TReDS) platform to meet the MSME Ministry’s deadline of March 31, 2025. As per the government’s directive, all businesses with a turnover exceeding ₹250 crore, along with Central Public Sector Enterprises (CPSEs) that procure goods and services from Micro, Small, and Medium Enterprises (MSMEs), must complete their registration on the TReDS platform before the specified deadline.
Mandatory TReDS Registration for Large Businesses
At present, it is already compulsory for CPSEs and companies with an annual turnover exceeding ₹500 crore to register on the TReDS platform. However, a recent government notification has lowered the threshold to include enterprises with an annual turnover above ₹250 crore. This move aims to bring more large businesses under the regulatory framework, ensuring timely payments to MSMEs and improving financial efficiency in the ecosystem.
Understanding TReDS and Its Benefits
The Reserve Bank of India (RBI) introduced TReDS in 2015 to tackle the problem of delayed payments to MSMEs. Over the years, the platform has played a vital role in enhancing cash flow management for small businesses by facilitating faster settlements on favorable terms.
TReDS functions as a digital marketplace where MSMEs can sell their trade receivables—such as invoices and bills—to banks and financial institutions at a discounted rate. This mechanism allows small businesses to access working capital without waiting for extended payment cycles from large buyers. By ensuring a transparent and structured payment system, TReDS reduces financial stress on MSMEs and promotes smoother business transactions.
Why Large Enterprises Are Adopting TReDS
With the revised regulation in effect, large companies must register on the TReDS platform to remain compliant and avoid regulatory penalties. Apart from fulfilling legal requirements, registering on TReDS helps businesses build stronger relationships with their suppliers. Prompt payments foster trust, improve operational efficiency, and contribute to a healthier supply chain.
Additionally, enterprises complying with the TReDS mandate demonstrate their commitment to supporting MSMEs, which play a critical role in India’s economic development. The initiative aligns with the government’s broader objective of improving the ease of doing business and fostering financial inclusion for small and medium enterprises.
Conclusion
The government’s decision to extend the mandatory TReDS registration requirement to companies with a turnover exceeding ₹250 crore is a significant step toward strengthening the financial landscape for MSMEs. As the March 31, 2025, deadline draws near, more large businesses are swiftly registering on the platform to ensure compliance. By facilitating faster payments and enhancing cash flow for MSMEs, TReDS continues to be an essential tool in creating a more transparent and efficient business environment in India.