Contents

• MSMEguidelines for postponed payment of dues to the MSE borrowers

• General MSME guidelines

As per the Micro, Small and Medium Enterprise development act (MSMED Act), 2006, the buyer has to make the payments on or before the date of the agreement between the supplier and the buyer in writing. There are few guidelines and liabilities set for the micro, Small, and Medium Enterprises.

The guidelines for postponed payment of dues to the MSE borrowers

The government has introduced an online method for delayed payment monitoring the overall system called the Micro, Small and Medium Enterprises, or MSME Samadhaan. The ease of applying to the Micro and Small Enterprises Facilitation Council or MSEFC. An MSME having a valid Udyog Aadhaar Memorandum or UAM can apply on an application through this specific portal. After the application is made by the MSME, the Micro, Small Enterprises Facilitating Council, or MSEFC have to examine the matter and therefore issuing directions to the buyer unit for the payment of the due amount with the interest. From 30 October 2017 i.e. the date of launching the MSME Samadhaan portal, The MSMEs have filed about 2,927 applications Associated with the delayed payments. These cases engage a total amount of Rs744.65 crore. This portal has helped to get the delayed payments settled mutually between the buyer and the seller. About 105 mutual settlements have been created that involves about Rs8.87 crore. The applications are getting changed to the cases by Micro, Small Enterprises Facilitation Councils, or MSEFC in the respective states. 264 applications have been successfully converted to the cases as of day 31st January 2018. This has empowered the Micro, Small, and Medium Enterprises or MSMEs to file their delayed payments directly. This is getting monitored by the respective Ministries or the Central Public Sector Enterprises or CPSEs and the state governments.

MSME guidelines

As per Section 15 of the MSMED Act, the supplier provides or supplies goods or renders any kind of services to a buyer, then the buyer has to make the payment on or before the date written in the agreement. In case there is no agreement the payment should be made before the appointed date. The proviso to this particular Section describes that the period of the credit given by the supplier will not exceed 45 days from the date of acceptance. To understand the provision of this section the following definitions should be clear in head:

Supplier

It means a micro or small enterprise filed a memorandum with specified authority has gained the Unique Identification Number or UIN for the Micro, Small and Medium Enterprises, or MSMEs.

Buyer

It means that any person buying any goods or receiving any services from the suppliers for consideration.

Appointed date

It suggests that the day immediately after the expiration of the fifteen days from the date of acceptance or the date of deemed acceptance of any kind of goods or any kind of services rendered by a buyer from the supplier.

If the buyer fails to pay the payment the amount to an MSME

If the buyer fails to make the payment as per Section 15 of the Micro Small and Medium Enterprises Development (MSMED) Act 2006, the buyer is liable to pay the compound interests along with the monthly rests provided to the supplier for the delayed period of 45 days on the amount and payable at three times of the bank’s rate set by the Reserve Bank of India or RBI.

Additional resources

MSME registration