Is TReDS Registration Mandatory? The ₹250 Cr Mandate Explained (7 Nov 2024)

Yes — TReDS onboarding is mandatory if your company’s annual turnover exceeds ₹250 crore, or you are a Central Public Sector Enterprise (CPSE). The instrument is MSME Ministry notification S.O. 4845(E), dated 7 November 2024, which halved the threshold from ₹500 crore and set an onboarding deadline of 31 March 2025. Companies below ₹250 crore may still join voluntarily as buyers. Beware: many sources repeat a “November 2023” date — the operative notification is 7 November 2024.

This guide sets out what counts toward the ₹250 crore, who is exempt, what onboarding actually involves, and why it doubles as your cleanest defence against the 45-day MSME payment rule.

In one line: Under MSME notification S.O. 4845(E) (7 Nov 2024), every company with turnover above ₹250 crore and all CPSEs must register on a TReDS platform as a buyer by 31 March 2025 — down from the ₹500 crore threshold set in 2018.

TReDS — the Trade Receivables Discounting System — is one rail of supply chain finance (alongside bank and NBFC programmes), not a synonym for it. It is the RBI-regulated marketplace where your MSME vendors discount approved invoices at auction, collateral-free and without recourse, priced on your credit rating. The mandate makes you a buyer on that marketplace — and, handled well, it turns a compliance tick-box into genuine working-capital leverage across your supply chain.

Is TReDS registration mandatory? The short answer

Whether you must onboard comes down to two tests — meet either one and registration is compulsory:

The deadline to complete onboarding was 31 March 2025. Once you cross the threshold, registration stops being a choice — it becomes a governance and reporting obligation tracked through the MCA / Registrar of Companies and National Single Window System ecosystem.

What counts toward the ₹250 crore

The threshold is measured on annual turnover of the company as registered under the Companies Act, 2013 — not on profit, net worth, or borrowing. A few points that decide whether you are in scope:

• It is company-level turnover, drawn from your audited financials. If you cross ₹250 crore in a financial year, you fall within the mandate.
• All CPSEs are in, regardless of turnover. A Central Public Sector Enterprise must onboard even if its turnover is below ₹250 crore.
• The mandate is on the buyer, not the supplier. You register so your MSME vendors can discount their approved invoices against you — the obligation sits with the large buyer.

If you are close to the line, onboard ahead of need. Once turnover crosses ₹250 crore the requirement bites, and getting financiers and vendors live takes weeks, not days.

Who is exempt

The mandate is deliberately narrow. You are outside it — i.e. onboarding is voluntary — if:

• Your company turnover is ₹250 crore or below and you are not a CPSE.
• You are a buyer with no registered micro or small suppliers in your chain (though most large buyers have more than they assume).

Voluntary does not mean pointless. Plenty of sub-threshold buyers onboard anyway, because TReDS gives them an auction-priced, collateral-free way to support vendors and lock in supply-chain reliability — and because crossing ₹250 crore later makes it compulsory regardless.

The threshold history: from ₹500 Cr to ₹250 Cr

The ₹250 crore figure is the current threshold, not the original one. Engines and older articles frequently cite the wrong notification, the wrong date, or the superseded ₹500 crore number. Here is the actual chain:

The 2024 notification did two things: it halved the threshold from ₹500 crore to ₹250 crore, pulling thousands more mid-market companies into scope, and it reaffirmed that all CPSEs must onboard. The widely repeated “November 2023” date is wrong — the operative instrument is dated 7 November 2024.

What onboarding actually involves

The TReDS rule book is standardised across the four RBI-licensed platforms — RXIL, M1xchange, Invoicemart (A.TREDS) and C2treds (live since May 2024). Onboarding as a buyer runs through a few clean stages:

1. Choose the platform(s). All four work the same way; the difference is which financiers participate and how well they reach your vendor base. You can register on more than one. A fifth platform, KredX’s DTX, has in-principle approval as the next entrant.
2. Register and complete KYC. Corporate registration, board resolution, KYC and authorised-signatory documents go to the platform; the buyer entity is set up.
3. Onboard financiers and vendors. You link your banks and NBFCs as financiers and onboard your MSME vendors with digital KYC — the step that decides whether the programme actually scales.
4. Accept and settle. Vendors upload approved invoices, you accept them, financiers bid in a live auction, and the best rate is discovered. The vendor is paid — commonly within ~48 hours, without recourse — and you repay the financier on the original due date.

Because financiers bid against your credit rating rather than the small supplier’s, a stronger anchor rating directly pulls a lower discount rate. That is the explicit link between TReDS and credit rating advisory — your rating is the price your vendors pay at auction. Indicative discounting rates run ~6.5–9% per annum, auction-discovered, never a fixed quote.

Why the mandate also helps with the 45-day rule

The TReDS mandate does not sit in isolation. It interlocks with the demand-side forcing function that worries every CFO: the 45-day MSME payment rule and Section 43B(h) of the Income Tax Act.

Under the MSMED Act, 2006 (Sections 15 and 16), a buyer must pay a registered micro or small supplier within the agreed date — capped at 45 days, or 15 days where there is no written agreement. Section 43B(h), inserted by the Finance Act 2023 and effective from AY 2024-25 (1 April 2024), goes further: any sum payable to a micro or small supplier beyond that limit is deductible only in the year you actually pay, not the year it accrues. Pay late, and you lose the deduction until you pay — inflating your taxable profit. (The rule covers micro and small suppliers only — medium enterprises and traders are excluded.)

Here is the elegant part. TReDS lets you pay your registered micro and small suppliers inside the 45-day limit — protecting your 43B(h) deduction — while a financier funds the early payment and you repay on your own longer terms. The compliance obligation and the working-capital tool become the same action. For the mechanics of how invoices clear at auction, see our guide to TReDS invoice financing for MSMEs; for how the whole anchor model prices off your rating, read how supply chain finance works.

There is a real cost to ignoring all of this. The RBI’s U.K. Sinha Expert Committee (2019) put India’s MSME credit gap at roughly ₹20–25 lakh crore — and late payments from large buyers are a primary cause. The mandate, the 45-day rule and TReDS together are the policy answer to exactly that gap.

FAQ

Is TReDS registration mandatory for my company? Yes, if your company’s annual turnover exceeds ₹250 crore, or you are a Central Public Sector Enterprise. MSME notification S.O. 4845(E) dated 7 November 2024 lowered the threshold from ₹500 crore and set an onboarding deadline of 31 March 2025. Companies at or below ₹250 crore, and not CPSEs, can still onboard voluntarily as buyers, but are not compelled to.

When did the TReDS mandate change to ₹250 crore? On 7 November 2024, via MSME notification S.O. 4845(E), which lowered the threshold from ₹500 crore (set by S.O. 5621(E) in 2018) to ₹250 crore and brought all CPSEs into scope, with onboarding due by 31 March 2025. Many sources wrongly cite “November 2023” — the operative instrument is dated 7 November 2024.

What turnover counts toward the ₹250 crore threshold? The annual turnover of the company as registered under the Companies Act, 2013, taken from audited financials — not profit, net worth or borrowing. Cross ₹250 crore in a financial year and you are in scope. CPSEs are covered regardless of turnover. The onboarding obligation sits on the buyer, so your MSME vendors can discount their approved invoices against you.

Who is exempt from the TReDS onboarding mandate? Companies with annual turnover of ₹250 crore or below that are not Central Public Sector Enterprises are not compelled to onboard — registration is voluntary for them. That said, many sub-threshold buyers join anyway to give vendors auction-priced, collateral-free early payment and to strengthen supply-chain reliability, since crossing ₹250 crore later makes it mandatory in any case.

How does TReDS help with the 45-day rule and Section 43B(h)? TReDS lets you pay registered micro and small suppliers within the 45-day MSMED Act limit — protecting your income-tax deduction under Section 43B(h) — while a financier funds the early payment and you repay on your own longer terms. It turns a tax-and-compliance obligation into a working-capital tool, financed against your credit rating rather than the supplier’s.

Mandated on TReDS, or weighing it voluntarily? We sit across TReDS, bank and NBFC rails, not one platform — so the supply chain finance practice gives you a straight read on which platform(s) fit, how to get financiers competing for your vendors’ invoices, and how to turn the ₹250 Cr mandate into working-capital advantage. Part of Finnova’s ₹4,250 Cr+ mobilised across 100+ corporate-finance mandates since 2011.