👍👍👍👍👍👍👍What MSME should do for recovery of their Delayed Payments?

Clipped from: https://taxguru.in/corporate-law/msme-recovery-delayed-payments.html

Arjuna (Fictional Character): Krishna, Right now, MSME’s are in a bind, there are lot of suppliers who are not paying MSME’s their dues on time and it’s causing MSME’s a ton of stress. Is there any help available from government to MSME’s ?

Krishna (Fictional Character): Arjuna, The government under the ministry of MSME has introduced the “MSME Samadhaan- Delayed Payment Monitoring System” scheme, which aims to resolve disputes related to delayed payments by launching an online platform called the MSME Delayed Payment Portal regulated by Micro Small Enterprises Facilitation Council (MSEFC). This platform enables MSMEs to file complaints and seek resolution for delayed payments.

Arjuna (Fictional Character): Krishna, what are the conditions to make an application on MSME Samadhaan Portal?

Krishna (Fictional Character): Arjuna, the conditions are-

1. Any Micro and Small Enterprise (MSE) with valid Udyog Aadhaar Number/Udyam Registration except those MSE who are registered as trading units.

2. Date of invoice should not be before 18/09/2015 in any case.

3. MSME can only file case after the date on which the MSE has obtained it’s UDHYAM Certificate. For Eg- If a supplier has obtained its UDHYAM certificate on 01/04/2020 then invoices before such date would not be eligible to seek resolution for delayed payments.

Arjuna (Fictional Character): Krishna, what is meant by delayed payments?

Krishna (Fictional Character): Arjuna, As per MSME Act, 2006 delayed payment means when the buyer has not made payment to its supplier within 45 days, where there is agreement or within 15 days, where there is no agreement between buyer and seller.

Arjuna (Fictional Character): Krishna, How to login on portal?

Krishna (Fictional Character): Arjuna, The procedure for MSEs to login on the portal is as follows:

  • Visit the website: https://samadhaan.msme.gov.in.
  • Click on the ‘Case Filing for Entrepreneur/MSE Units’ button available on the homepage.
  • Select the ‘Udyog Aadhaar Number’ or ‘Udyam Registration Number’ option.
  • Enter the Udyog Aadhaar/Udyam Registration Number, mobile number and click on the ‘Validate Udyog Aadhaar’ or ‘Validate Udyam Registration’ button.
  • An OTP will be sent to the email registered during Udyog Aadhaar/Udyam registration.
  • Enter the OTP and proceed to file the application for delayed payment.

Arjuna (Fictional Character): Krishna, What is the procedure to file an application on the portal?

Krishna (Fictional Character): Arjuna, the procedure to file an application on the portal is:

1. Click on “Application Entry” Tab.

2. Enter the invoice date for which the payment is pending.

3. Fill in the basic details of the Petitioner(Supplier) and the Respondent(Buyer).

4. Upload the work orders received from the respondent(buyer) and the invoice raised by the petitioner(supplier).

5. Click on “Submit” to file the application for delayed payments.

6. Verify the data before submitting and enter the verification code then click on “Final Submit”.

Arjuna (Fictional Character): Krishna, What happens after the application is being filed?

Krishna (Fictional Character): Arjuna, after the application is filed:

1. The MSEFC will either accept the application or reject it within 90 days.

2. If MSEFC accepts the case, then a notice is issued to the respondent via E-mail and SMS specifying the details about the delayed payment.

3. The Buyer is liable to pay interest with the monthly rests to the supplier in case of non-payment or delayed payment. The interest is compounded at three times the bank rate notified by the RBI.

4. The Supplier can check the status of the application on the portal itself by clicking on “Check Case Status” tab.

Arjuna (Fictional Character): Krishna, what should one learn from this?

Krishna (Fictional Character): Arjuna, The MSME Samadhaan portal is a game-changer for small businesses who are registered as MSMEs. It lets you file complaints against parties that are holding out on paying you. The government has been focussing completely on ensuring that the working capital of small scale business are not affected, hence there is also a new provision that has been inserted in Income Tax Act, which will disallow the expense of the buyer if he doesn’t pay MSE’s their due within 45 days.

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