Delayed Payments to Micro & Small Enterprises
(Chapter V of MSMED Act, 2006)
These provisions are applicable only to micro & small scale enterprises.
Thus, these provisions are, as of now, not applicable to medium scale enterprises.
Maximum credit period :
Irrespective of whatever or not credit period has specifically been agreed upon between seller of goods / supplier of services (micro / small enterprises) & purchaser of goods / recipient of service, maximum credit period can be of 45 days from the day of acceptance or deemed acceptance.
Recovery with interest :
Where buyer of goods / service recipient fails to make payment of the amount due to supplier, irrespective of any terms & condition agreed between the seller & buyer or even though nothing has been agreed upon in this regard, buyers shall be liable to pay compounding interest (at monthly rest) on delayed amount from the day of acceptance / deemed acceptance @ 3 times of the bank rate as notified by RBI.
Recovery through MSME Samadhan :
For recovery of said amount, supplier can approach to Micro & Small Enterprises Facilitation Council (MSEFC) under MSME Samadhan Scheme for recovery of delayed payments.
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