MSME Samadhan & Dispute Resolution

The delayed-payment problem

Delayed payments from buyers can choke an MSME's cash flow. The MSMED Act, 2006 gives registered MSMEs a powerful remedy, and the MSME Samadhan portal operationalises it.

The statutory payment rule

Under the Act, a buyer must pay an MSME supplier within the agreed date or, if none, within 45 days of acceptance of goods/services. If the buyer delays, they are liable to pay compound interest at three times the RBI bank rate on the outstanding amount — a steep deterrent.

Filing on MSME Samadhan

The aggrieved MSME files an application online on the MSME Samadhan portal against the defaulting buyer. The case goes to the Micro and Small Enterprises Facilitation Council (MSEFC), which first attempts conciliation and, failing that, arbitration — a relatively fast, low-cost route compared to civil courts.

A practical lever

Beyond recovery, there is a disclosure angle: buyers must report dues to MSMEs in their financial statements, and timely payment to MSMEs affects the buyer's own tax deductibility under income-tax rules — adding pressure to pay on time.