Delayed Payments to Micro & Small Enterprises

(Chapter V of MSMED Act, 2006)

Applicability :

These provisions are applicable only to micro & small scale enterprises.

Thus, these provisions are, as of now, not applicable to medium scale & large 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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To obtain list of documents / data required for submission of petition to MSEFC, pl. contact us on :

legalservices.dcorpo@gmail.com or on +918329462676 / +919518597214

Disclaimer : 

This information is hosted on our website for the purpose of creating general awareness amongst readers / stake-holders. Users are requested to have a check prevailing provisions of the MSMED Act before taking any action in this regard.