MSME OUTSTANDING PAYMENT RESOLUTION
One of the toughest hurdles for Micro, Small, and Medium Enterprises (MSMEs) is the delay in payments from buyers after goods or services are delivered.
Under the MSMED Act, 2006, buyers must pay within the agreed credit period, not exceeding 45 days. Any delay beyond this is treated as an outstanding or delayed payment, giving MSMEs the right to seek legal resolution and interest. To address delayed payments, the Government of India established the MSME Outstanding Payment Resolution System under the MSMED Act, 2006. It allows MSMEs to claim dues, earn interest, and resolve disputes through the MSME Facilitation Council.
Legal Protection for MSMEs:
- Buyers must pay MSMEs within the agreed period, not exceeding 45 days.
- MSMEs can file delayed payment disputes with the MSEFC.
- Interest is legally payable on delayed payments.
- Companies must report dues over 45 days to the MCA.
- Defaulters are listed on the MSME Samadhaan Portal.
- MSEFC aims to resolve cases within 90 days.
FAQs
It is a quasi-judicial body set up by each State/UT to resolve disputes between MSMEs and buyers through conciliation and arbitration.
An MSME can file a complaint through the MSME SAMADHAAN Portal to the Micro and Small Enterprises Facilitation Council (MSEFC) for dispute resolution.
Buyers must make payments to MSMEs within the agreed credit period, which cannot exceed 45 days from the date of acceptance or delivery.
Interest is three times the RBI Bank Rate, compounded monthly, as per Section 16 of the MSMED Act.
The MSMED Act applies to all buyers — including government departments and public sector undertakings (PSUs) — and they are equally liable for delayed payments.
Yes. Only Udyam-registered MSMEs are eligible to file cases and claim benefits under the MSMED Act.