{"id":11941,"count":1,"description":"

Small businesses often agree to payment terms when accepting an order, but what happens when the customer keeps delaying payment?<\/p>\r\nThe Micro, Small and Medium Enterprises Development Act, 2006 contains specific provisions for delayed payments to eligible micro and small enterprises. Understanding the rules can help business owners set clearer payment terms and recognise when an overdue invoice needs closer attention.\r\n

What does the law say?<\/h3>\r\nSection 15 addresses the buyer\u2019s obligation to pay for goods supplied or services rendered by an eligible supplier. Where the payment period is agreed in writing, it cannot exceed 45 days from acceptance or deemed acceptance.\r\n\r\nWhere there is no written agreement on the payment period, the Act\u2019s definition of the appointed day becomes relevant. The exact due date therefore depends on the agreement and statutory rules.\r\n\r\nSection 16 provides for compound interest with monthly rests at three times the RBI-notified bank rate, subject to the Act\u2019s requirements.\r\n

Who can use these protections?<\/h3>\r\nThe provisions are not automatically available to every business describing itself as an MSME. The supplier\u2019s micro or small classification, registration, activity and relevant transaction dates must be considered.\r\n\r\nRegistration obtained after supplies have already been completed may not give retrospective benefits. The Supreme Court\u2019s decision in Silpi Industries<\/em> is important when reviewing this issue.\r\n

What should business owners do?<\/h3>\r\nKeep written payment terms, purchase orders, invoices, delivery acknowledgements and correspondence. If an invoice becomes overdue, reconcile the amount first and review the applicable rules before deciding how to proceed.\r\n\r\nThe 45-day rule is not a substitute for clear contracts or good receivables management. It is one part of a broader legal framework.\r\n\r\nRead next:<\/strong> The FilingPoint pillar guide explains the wider recovery process, eligibility checks and documentation.\r\n\r\nGeneral information only; verify current law and the facts of your transaction.<\/em>","link":"https:\/\/filingpoint.com\/consultants\/india\/what-is-the-msme-delayed-payment-rule-in-india\/","name":"What Is the MSME Delayed Payment Rule in India?","slug":"what-is-the-msme-delayed-payment-rule-in-india","taxonomy":"post_tag","meta":[],"yoast_head":"\nWhat Is the MSME Delayed Payment Rule in India? - Best Company Registration | Tax Filing Services in Chennai, India<\/title>\n<meta name=\"description\" content=\"Call Filing Point 72999-72500. The Best Company Registration, GST, ROC Filing Consultants. 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