MSMED Full form is Micro, Small, and Medium Enterprises Development. MSMED refers to the Micro, Small, and Medium Enterprises Development Act, 2006, introduced by the Government of India.
he MSMED Act aims to support the growth and development of micro, small, and medium enterprises (MSMEs). It also focuses on enhancing the competitiveness of these enterprises in the country.
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The primary aim of the MSMED Act is to promote and facilitate the growth of MSMEs in India. It seeks to:
Provide Legal Framework: The Act establishes a clear legal framework for identifying, supporting, and categorizing MSMEs based on investment and turnover criteria.
Promote Competitiveness: By offering financial incentives, training, and infrastructure, the Act aims to enhance the competitiveness of MSMEs in domestic and global markets.
Address Payment Delays: The Act ensures timely payment to MSMEs, reducing financial strain and enhancing their operational efficiency.
Facilitate Credit Access: It promotes easier access to loans and credit, enabling MSMEs to invest in technology and business expansion.
Definition and Classification of MSMEs:
MSMED Act defines MSMEs based on investment in plant and machinery or equipment and turnover, making it easier to identify and categorize enterprises for various benefits.
Promotional Measures:
The government, under this act, undertakes initiatives such as providing credit support, setting up incubation centres, and encouraging innovation and entrepreneurship.
Delayed Payments Resolution:
MSMED Act mandates that buyers must make payments to MSMEs within 45 days of acceptance of goods or services. In case of delays, buyers are liable to pay interest three times the bank rate.
Establishment of Facilitation Councils:
The Act provides for the establishment of MSME Facilitation Councils in each state to help resolve payment disputes between MSMEs and their buyers.
Credit and Financial Assistance:
The Act ensures that MSMEs have better access to credit through initiatives like priority sector lending and the Credit Guarantee Fund Scheme.
The Act is critical for the growth of the Indian economy.
MSMEs contribute significantly to employment generation, GDP, and exports.
By addressing their specific needs and challenges, the act fosters a more inclusive economic environment. It also encourages innovation and self-reliance by supporting start-ups and small-scale industries.
The MSMED Act, 2006, is a cornerstone of India’s efforts to promote the micro, small, and medium enterprises sector.
Its comprehensive framework supports MSMEs in overcoming challenges and achieving sustainable growth.
With this act, the Government of India underscores the importance of MSMEs as a key driver of economic development, innovation, and job creation.
RBI Bank Rate current 2024 – MSME Notes by NB Associates
The Reserve Bank of India (RBI) is India’s central banking institution, responsible for regulating the country’s monetary policy. Among its many tools, the RBI bank rate is a crucial parameter. It influences the cost of borrowing and lending in the financial system.
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As of November 2024, the RBI bank rate current stands at 6.75%.
Last change in RBI Bank rate was on Feb, 2023 vide circular / notification RBI/2022-23/174 DOR.RET.REC.101/12.01.001/2022-23. It was notified on date February 8, 2023. On this date the Bank Rate is revised upwards by 25 basis points from 6.50 per cent to 6.75 per cent with immediate effect.
Click here to read the notification / circular
The bank rate is the interest rate at which the RBI lends money to commercial banks without any collateral for the long term. Bank rate is different from repo rate. Repo rate influences short-term borrowings with collateral. Bank rate often signals the overall interest rate environment. When the RBI increases the bank rate, borrowing from the central bank becomes costlier for commercial banks, leading to a cascading effect of higher interest rates in the economy. Conversely, a reduction in the bank rate can encourage borrowing and stimulate economic activity.
How RBI Bank Rate is connected is MSME Laws?
In case of delayed payment by the Buyer to the Supplier, section 16 of the MSMED Act, provides for the payment of compounding interest (monthly rest) at the rate which is 3 times of the RBI current bank rate.
MSME law refers to legislation and regulations governing Micro, Small, and Medium Enterprises.
These MSME laws are designed to provide a conducive environment for the growth and sustenance of small businesses, which are vital for economic development, employment generation, and fostering entrepreneurship.
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The major MSME Law in India is Micro, Small and Medium Enterprises Development Act, 2006. This MSME law is also called MSMED Act or MSME Act in short.
Besides, the several State governments have enacted its own MSME rules for giving intent to main MSME law.
The Central and the State Government, from time to time also come up with regulations, and notification in consonance with and to facilitation the provisions of the above MSME Law.
The above mentioned MSME laws include provisions related to:
1. Definitions and classification: Establishing criteria for defining what constitutes a micro, small, or medium enterprise based on factors such as investment in plant and machinery, turnover etc.
2. Registration and Compliance: Procedures for MSME registration to avail benefits of MSME law provisions and incentives provided by the government.
3. Financial Support and Incentive: Provision of financial assistance, subsidies, tax breaks, credit guarantees, and other incentives to support MSMEs in accessing capital, technology, and markets.
4. Promotion and Development: Measures to promote the growth and development of MSMEs through capacity-building programs, skill development initiatives, technology upgradation, market linkages, and entrepreneurship development.
5. Protection and Facilitation: Ensuring fair treatment, protection of interests, and facilitation of MSMEs in dealing with government agencies, larger enterprises, and other stakeholders
MSME laws aim to create an enabling environment for small businesses to thrive, contribute to economic growth, generate employment opportunities, and foster innovation and competitiveness.
They play a crucial role in promoting inclusive and sustainable development by empowering smaller enterprises and entrepreneurs.
MSME laws aim to create an enabling environment for small businesses to thrive, contribute to economic growth, generate employment opportunities, and foster innovation and competitiveness.
They play a crucial role in promoting inclusive and sustainable development by empowering smaller enterprises and entrepreneurs.
How to get MSME complaint registered ?
MSME Law Notes by NB Associates
In India, there is a framework in place to address delayed payments to Micro, Small, and Medium Enterprises (MSMEs) called the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006.
We are the leading Law firm / Lawyers providing comprehensive MSME legal consultancy to our clients. We also help and legally assist our clients in the recovery of dues or outstanding.
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Under the MSMED Act, there are provisions to protect MSMEs from delayed payments by buyers, primarily in the context of supply of goods or services.
The Act defines the time period within which the buyer is required to make the payment to the MSME, which is generally 45 days from the date of acceptance of goods or services.
If the buyer fails to make the payment within this period, it becomes a case of delayed payment.
In case of delayed payments, an MSME can initiate a legal process against the buyer by filing an application with the Micro and Small Enterprises Facilitation Council (MSEFC).
This application or claim can also be filed through MSME Samadhan Portal
The MSEFC has the authority to inquire into the complaint and facilitate the settlement or pass an award for the recovery of the delayed payment along with interest.
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Section 18 of MSME Act – What is Section 18 of MSME Act
MSME Law Notes by NB Associates
In the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, there is a provision for the establishment of Micro and Small Enterprises Facilitation Councils.
These councils are responsible for facilitating the resolution of disputes and grievances related to delayed payments or other disputes between the buyer and the micro or small enterprise.
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Section 18 of the MSMED Act deals with the followings :
1. Reference of disputes of delayed payment to Micro and Small Enterprises Facilitation Council [Section 18(1)]
2. Micro and Small Enterprises Facilitation Council conducting conciliation on receipt of reference [Section 18(2)]
3. Initiation of Arbitration proceeding, in case conciliation initiated under section 18(2) is not successful and stands terminated without any settlement between the parties. [Section 18(3)]
4. Micro and Small Enterprises Facilitation Council Territorial jurisdiction where reference of the dispute of delayed payment to be made. [Section 18(4)]
5. Provision that Every reference made to be decided within a period of ninety days from the date of a reference. [Section 18(5)]
18. Reference to Micro and Small Enterprises Facilitation Council.—(1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council.
(2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act.
(3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer it to any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section(1) of section 7 of that Act.
(4) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.
(5) Every reference made under this section shall be decided within a period of ninety days from the date of making such a reference.
Under the provisions the Section 18(1) of MSME Act dispute in regards to any amount due against the buyer for the goods or services supplied by the Supplier can be referred to the Micro and Small Enterprises Facilitation Council.
The provisions uses the words ‘Any party to the dispute may make reference’. So, either Buyer or the Seller can make such reference. It is not that only Supplier can make reference. A buyer can also make reference.
Provided however that this reference to be for any amount due against the buyer for the goods or services supplied by the Supplier as per section 17 of the Act.
Section 18(2) of the MSME Act provides that on receipt of a reference under section 18(1), the Micro and Small Enterprises Facilitation Council can itself conduct conciliation in the matter.
Micro and Small Enterprises Facilitation Council can also seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation.
For such conciliation the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act.
Section 18(3) of MSME Act provides that where the conciliation initiated under section 18(2) is not successful and stands terminated without any settlement between the parties, the Micro and Small Enterprises Facilitation Council shall itself take up the dispute for arbitration
Micro and Small Enterprises Facilitation Council can also refer it to any institution or centre providing alternate dispute resolution services for such arbitration.
In such arbitration proceeding the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section(1) of section 7 of that Act.
Section 18(4) of MSME Act provides thatnotwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.
Thus, as per section 18(4) of MSMED Act, the MSME facilitation council where supplier is located has jurisdiction to adjudicate the dispute of the delayed payment between the Supplier and the buyer.
Section 18(5) of MSME Act provides that Every reference made under this section 18 to be decided within a period of ninety days from the date of making such a reference.
Thus, the Arbitration proceeding has to be completed within a period of 90 days.
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MSME Samadhaan Login – Empowering Micro and Small Enterprises
MSME Law Article by NB Associates
The MSME (Micro, Small, and Medium Enterprises) Samadhaan Login portal has emerged as a game-changer for the empowerment of small businesses in India. Launched by the Government of India, this online platform serves as a resolution mechanism for delayed payments faced by MSMEs. Let’s delve into the significance of the MSME Samadhaan Login portal, its key features, and the benefits it offers to the MSME sector.
We are the leading Law firm / Lawyers providing comprehensive MSME legal consultancy to our clients. We also help and legally assist our clients in the recovery of dues or outstanding.
Clients may contact us on the given number for any legal consultancy.
Contact no: 9811899279
The MSME Samadhaan Login portal was introduced to address the issues of delayed payments that MSMEs often encounter. It acts as a digital interface between MSMEs and their buyers, enabling them to file complaints regarding delayed payments and seek speedy resolution. The portal operates under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006.
One of the key features of the MSME Samadhaan Login portal is online complaint filing. MSMEs can file complaints online against buyers who have not made payments for goods or services delivered. This eliminates the need for physical paperwork and streamlines the complaint filing process. Furthermore, the portal provides a real-time tracking system, allowing MSMEs to monitor the status of their complaints. This feature enables businesses to stay informed about the progress of their complaints and take appropriate actions if necessary.
In case the complaint is not resolved within the stipulated time, the portal offers an escalation mechanism. MSMEs have the option to escalate the matter to the concerned authorities, ensuring that their grievances are addressed promptly.
The MSME Samadhaan Login portal offers several benefits to MSMEs. Firstly, it ensures the prompt resolution of delayed payment disputes, providing much-needed relief to MSMEs facing financial strain. Timely payments enable MSMEs to manage their cash flows effectively, allowing them to invest in business growth and meet their operational requirements. By offering a transparent platform to file and track complaints, the portal also encourages accountability among buyers and helps build trust between MSMEs and their clients. This, in turn, enhances market opportunities for reliable MSMEs.
Another significant advantage of the MSME Samadhaan Login portal is the reduction of dependency on legal proceedings. MSMEs can avoid lengthy and costly legal procedures by using the portal as a mechanism for resolving payment-related issues efficiently. This saves time, resources, and effort, allowing businesses to focus on their core operations.
To access the MSME Samadhaan Login portal, MSMEs need to visit the official website and register using their Udyog Aadhaar Number. Upon registration, they can log in using their credentials and file complaints against defaulting buyers. The portal also provides user-friendly features and guidance to facilitate easy navigation.
In conclusion, the MSME Samadhaan Login portal has revolutionized the way MSMEs address delayed payment issues. By providing a digital platform for complaint filing, real-time tracking, and escalation, the portal ensures timely resolution and improved cash flow management for MSMEs. It promotes transparency, accountability, and trust in business transactions, contributing to the growth and development of the MSME sector in India.
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MSME Samadhaan Portal -– Ensuring Redressal of Payment
MSME Law Article by NB Associates
Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in the socio-economic development of any country. They contribute significantly to employment generation, GDP growth, and overall industrial output. However, one of the persistent challenges faced by MSMEs is delayed payments from their buyers, which can severely impact their cash flow and sustainability.
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To address this issue and provide a platform for a speedy resolution, the Government of India launched the MSME Samadhaan Portal. This online portal serves as a digital platform for MSMEs to lodge complaints regarding delayed payments and seek redressal from the concerned parties. In this article, we will delve into the significance of the MSME Samadhaan Portal, its features, and the impact it has had on the MSME sector.
Micro, Small, and Medium Enterprises form the backbone of the Indian economy, contributing to employment generation, export promotion, and balanced regional development.
However, despite their importance, MSMEs often face challenges in accessing timely payments for their products or services.
Payment delays can occur due to various reasons such as the financial constraints of buyers, operational inefficiencies, or intentional defaults by larger corporations.
These delays have a cascading effect on MSMEs, affecting their working capital, profitability, and growth prospects.
The MSME Samadhaan Portal was launched in April 2017 under the Ministry of Micro, Small, and Medium Enterprises, Government of India.
The primary objective of the portal is to provide a mechanism for MSMEs to report and resolve payment issues efficiently.
The portal enables MSMEs to register their complaints online, which are then forwarded to the concerned parties, including the buyer and the respective government department or public sector undertaking.
(a) Online Complaint Registration: MSMEs can register their complaints regarding delayed payments on the portal by providing necessary details such as buyer information, invoice details, and payment terms.
(b) Grievance Redressal: Once a complaint is registered, it is forwarded to the concerned parties for resolution. The portal allows for online tracking of the complaint status, ensuring transparency and accountability in the redressal process.
(c) Time-Bound Resolution: The portal mandates a time limit for resolving the complaints. As per the guidelines, the concerned parties are required to respond to the complaint within a specified period.
(d) Monitoring and Feedback: The portal provides a dashboard for monitoring the overall progress of the redressal. It also allows MSMEs to provide feedback on the resolution process, ensuring continuous improvement.
Since its inception, the MSME Samadhaan Portal has made a significant impact on the MSME sector by addressing the issue of delayed payments. Here are some key ways in which the portal has positively influenced the sector:
(a) Timely Redressal: The portal has streamlined the process of complaint registration and resolution, ensuring that MSMEs receive timely redressal for their payment-related grievances. The time-bound resolution mechanism has created a sense of accountability among the concerned parties, leading to faster payments.
(b) Enhanced Cash Flow: By facilitating the prompt resolution of payment disputes, the portal has helped MSMEs improve their cash flow. Timely payments enable them to meet their operational expenses, invest in growth initiatives, and avoid financial strain.
(c) Increased Confidence: The existence of the MSME Samadhaan Portal has instilled confidence among MSMEs in dealing with payment issues. Knowing that there is a dedicated platform for lodging complaints and seeking redressal, MSMEs are more likely to pursue their legitimate dues without fear or hesitation.
(d) Reduction in Litigation: Prior to the establishment of the portal, MSMEs often had to resort to lengthy and costly legal battles to recover their payments. The MSME Samadhaan Portal offers an alternative avenue for resolution, reducing the burden of litigation on MSMEs and promoting amicable settlements.
(e) Improved Business Relationships: The portal promotes healthy business relationships between MSMEs and their buyers. By providing a structured platform for dispute resolution, it encourages open communication and negotiation between the parties involved. This, in turn, fosters trust and cooperation, leading to stronger business partnerships.
(f) Data Analysis and Policy Reforms: The MSME Samadhaan Portal generates a vast amount of data regarding payment delays, parties involved, and resolution outcomes. The analysis of this data can provide valuable insights into the underlying issues and help policymakers formulate effective measures to address payment-related challenges faced by MSMEs.
While the MSME Samadhaan Portal has been successful in addressing delayed payment issues to a significant extent, there is still room for improvement. Here are some recommendations for further enhancing the effectiveness of the portal:
(a) Awareness and Outreach: Continued efforts should be made to create awareness about the portal among MSMEs across the country. Outreach programs, workshops, and digital campaigns can help reach out to a larger audience and ensure maximum utilization of the portal’s services.
(b) Strengthening Dispute Resolution Mechanisms: The portal can be further strengthened by establishing alternative dispute resolution mechanisms, such as mediation or arbitration, to expedite the resolution process. These mechanisms can offer faster and more cost-effective solutions for both parties involved.
(c) Collaboration with Financial Institutions: Collaboration with banks and financial institutions can play a crucial role in ensuring prompt payments to MSMEs. Integrating the portal with financial institutions’ systems can facilitate seamless fund transfers and automated reminders for payment due dates.
(d) Continuous Monitoring and Feedback: Regular monitoring of the portal’s performance and gathering feedback from MSMEs can help identify any shortcomings and implement necessary improvements. Feedback mechanisms, user surveys, and periodic reviews can contribute to the portal’s evolution.
The MSME Samadhaan Portal has emerged as a significant tool in empowering MSMEs by providing them with a platform to seek redressal for delayed payments.
It has revolutionized the way payment disputes are addressed, promoting transparency, accountability, and timely resolution.
By enabling MSMEs to assert their rights without the burden of protracted litigation, the portal has positively impacted their cash flow, business relationships, and overall confidence.
However, continuous efforts are required to raise awareness, strengthen dispute resolution mechanisms, and collaborate with financial institutions to enhance the effectiveness of the portal further.
With ongoing improvements and support, the MSME Samadhaan Portal can continue to be a vital instrument in safeguarding the interests of MSMEs and promoting their growth in the Indian economy.
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MSME guidelines for payment
MSME Law Notes by NB Associates
The MSME Act, or the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, is an Indian legislation that provides guidelines and regulations for the promotion, development, and enhancement of competitiveness of micro, small, and medium enterprises in India.
We are the leading Law firm / Lawyers providing comprehensive MSME legal consultancy to our clients. We also help and legally assist our clients in the recovery of dues or outstanding.
Clients may contact us on the given number for any legal consultancy.
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The act includes provisions related to various aspects of MSMEs, including payments. Here are some key guidelines regarding payment under the MSMED Act:
The act mandates that the buyer is required to make the payment to the supplier of goods or services from the micro or small enterprise on or before the agreed-upon date or within 45 days from the acceptance of the goods or services, whichever is earlier.
In case the buyer fails to make the payment within the stipulated timeframe, they are liable to pay compound interest with monthly rests to the supplier. The interest rate is three times the bank rate notified by the Reserve Bank of India or the rate specified in the agreement, whichever is higher.
It is advisable for both the buyer and the supplier to have a written agreement or contract specifying the payment terms and conditions, including the payment due date, interest on delayed payment, and any other relevant terms.
If the payment is not made by the buyer within the specified timeframe, the supplier can file a complaint under the MSMED Act. The complaint can be filed with the Micro and Small Enterprise Facilitation Council (MSEFC) established under the act.
The MSEFC is responsible for resolving disputes related to delayed payments between the buyer and the supplier. The MSEFC will examine the matter and pass appropriate orders, which may include directing the buyer to make payment along with interest.
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Law notes on RBI Bank rate for MSME – Bank rate by RBI for MSME
The MSME Act requires buyers to make payments to MSMEs within 45 days.
This timeline applies from the date of acceptance or deemed acceptance of goods or services.
If they fail to do so, they must pay interest at three times the bank rate notified by the Reserve Bank of India.e notified by the Reserve Bank of India.
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The bank rate notified by the Reserve Bank of India currently stands at 6.75%, as of Feb, 2023.
This means that the interest rate for MSME claims under the MSME Samadhaan portal is 3 times the current bank rate. Which is 20.25% (6.75% x 3)
The interest rate under the MSME Act may change based on notifications from the Reserve Bank of India.
The MSME Samadhaan portal regularly updates the applicable interest rate to reflect these changes.
Bank rate notified by RBI (Reserve Bank of India) since 2018.
| Date from | Date to | RBI notified Bank rate | Notification Link |
| 08.02.2023 | – | 6.75% | Click here |
| 07/12/2022 | 07/02/2023 | 6.50% | Click here |
| 30/09/2022 | 06/12/2022 | 6.15% | Click here |
| 05/08/2022 | 29/09/2022 | 5.65% | Click here |
| 08/06/2022 | 04/08/2022 | 5.15% | Click here |
| 04/05/2022 | 07/06/2022 | 4.65% | Click here |
| 22/05/2020 | 03/05/2022 | 4.25% | Click here |
| 27/03/2020 | 21/05/2020 | 4.65% | Click here |
| 04/10/2019 | 26/03/2020 | 5.40% | Click here |
| 07.08.2019 | 03.10.2019 | 5.65% | Click here |
| 06.06.2019 | 06.08.2019 | 6% | Click here |
| 04.04.2019 | 05.06.2019 | 6.25% | Click here |
| 07.02.2019 | 03.04.2019 | 6.50% | Click here |
| 01.08.2018 | 06.02.2019 | 6.75% | Click here |
Section 16 of MSME Act – Understanding Its Provisions and Significance -What is Section 16 of MSME Act
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 is an Indian legislation. It aims to promote and support the growth and development of micro, small, and medium enterprises (MSMEs).
To know what legal services we provide in relation to MSME Recovery – Click here
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Section 16 of the MSMED Act deals with the delayed payment to MSMEs by the buyer.
As per this section, Where any buyer fails to make payment of the amount to the supplier, as required under section 15, the buyer is liable to pay compound interest to the supplier.
Note the following points:
As per section 16 of MSME Act:
1. The rate of the compound interest is three (3) times the bank rate notified by RBI.
The bank rate notified by RBI From time to time
2. The interest is to compound on monthly intervals.
3. Section 16 of the MSMED Act applies the rate of interest, overriding any agreement between the buyer and the supplier.
This means that even if the buyer and supplier agree on a different rate of interest, the rate specified in Section 16 of the MSME Act prevails.
4. Section 16 of the MSMED Act applies the interest rate, overriding any contrary provisions in existing laws.
This means that even if another law provides a different rate of interest, the rate specified in Section 16 of the MSME Act prevails.
Section 16 of MSME Act mentions the compounding interest is payable on the amount due from the appointed day or, as the case may be from the date immediately following the date agreed upon.
As per Section 2(b) (b) “appointed day” means the day following immediately after the expiry of the period of fifteen days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier.
Further section 15 provides that in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days from the day of acceptance or the day of deemed acceptance.
So, the following may be noted:
1. The interest is payable on the expiry of the 15th date if there is no written agreement.
2. If a written agreement specifies the payment period and it is within 45 days, the buyer must pay interest after the agreed period expires.
3. If a written agreement specifies the payment period and the agreed period exceeds 45 days, the buyer must pay interest after 45 days have passedyable.
16. Date from which and rate at which interest is payable.—Where any buyer fails to make payment of the amount to the supplier, as required under section 15, the buyer shall, notwithstanding anything contained in any agreement between the buyer and the supplier or in any law for the time being in force, be liable to pay compound interest with monthly rests to the supplier on that amount from the appointed day or, as the case may be, from the date immediately following the date agreed upon, at three times of the bank rate notified by the Reserve Bank.
(a) Date from which interest is payable and
(b) rate at which interest is payable
As per section 2(b) of MSME Act “appointed day” means the day following immediately after the expiry of the period of fifteen days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier.
Thus the appointed day means the day immediately following the 15 days of the date of the acceptance of goods or day of the deemed acceptance of goods.
Section 2(b) of MSME Act reads as under:
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) __;
(b) “appointed day” means the day following immediately after the expiry of the period of fifteen days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier.
As per Section 2(b) explanation the date of acceptance means :
(1) the day of the actual delivery of goods or the rendering of services; or
(1) where any objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier;
Section 2(b) explanation reads as under :
2. Definitions.—In this Act, unless the context otherwise requires,—
(a)___
(b) ___
Explanation.—For the purposes of this clause,— (i) “the day of acceptance” means,—
(a) the day of the actual delivery of goods or the rendering of services; or
(b) where any objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier.
Section 2(b) explanation (ii) provides that the day of deemed acceptance” means, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services.
So when no objection is made in writing by the buyer regarding the goods within 15 days of the date of delivery, the buyer shall deemed to have accepted the goods.
Section 2(b) explanation (ii) reads as under
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) __
(b) __
Explanation.—
For the purposes of this clause,—
(i) “___
(ii) “the day of deemed acceptance” means, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services;
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