The Ministry of MSMEs lend a helping hand to such enterprises by giving them the right to collect interest on the payments that are delayed from the buyer’s side. The MSME Facilitation Council will do the settlement of such disputes in minimum time through Conciliation and Arbitration. The MSMEFC will help MSME Enterprises to get their stuck up money with interest and resolve the dispute (if any) with buyer through Conciliation and Arbitration.

MSME registered enterprise supplies any goods or services to a buyer. The buyer is required to make the payment on or before the agreed date of payment or within 45 days from the day of acceptance the goods and services from supplier as per the MSMED Act 2006.

If the buyer delays the payment for more than 45 days after accepting the products or services, then the buyer has to pay monthly compound interest on the amount that was agreed to be paid. The interest rate is three times the Bank rate that is notified by the Reserve Bank of India.

The acceptance date of the material will be the considered as the day the material was delivered. If there is no objection/ issue (quality or quantity of the supplied material/ services), is made in writing by the buyer about acceptance of goods or services within 15 days from the day of the delivery then it will be considered as deemed acceptance after 15 days.

Documents Required for filling MSME Case:-

  • Copy of Unpaid Invoices
  • Copy of work / purchase order
  • Acknowledgment copy of material receipt, E-way bill, bilty copy (if any)
  • Copy of Udyog/ Udyam Adhar Registration
  • GST Registration Copy
  • Aadhaar Card, Pan Card, incorporation certificate (in case Pvt. Ltd. / Limited company)
  • Statement of Account of the party/ Ledger account
  • Correspondence for payment with opposite party.
  • Vakalatnama signature (as per format attached)
  • Resolution for authorization (if partnership firm/ Pvt. Ltd. / Ltd. company)

Protection Against Delayed Payments for MSMEs as per MSMED Act 2006

Effective strategies to be applied to protect your money struck with debtors
  • Try to get a written work order or purchase order in advance with the buyer.
  • Send invoice to buyer with proper Name, Address, GST number, Purchase order number and date, Credit Period and also mention your Udyog/ Udyam registration number.
  • Try to get an acknowledgment or receipt with a stamp on the Invoice / delivery challan from the buyer at the time of delivery of goods/services.
  • If there are any changes in the invoice (quantity, price, quality) please intimate to buyer on email/ written communication as soon as possible.
  • If there are regular business with buyer, try to reconcile the accounts with the purchaser /buyer on regular basis.
  • Seek Balance confirmation from the buyer at the end of each financial year.
  • If your payment is not received on time, send a gentle payment reminder on a regular basis.
  • Prefer communication with the buyer on e-mail/ written.