Date:April 8, 2023
MSME Samadhaan Procedure: Resolving Disputes and Ensuring Timely Payments for Indian MSMEs
Law Article by NB Associates
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 was established by the Indian government to promote the growth of micro, small and medium enterprises (MSMEs) in the country.
One of the key provisions of the Act is the MSME Samadhaan scheme or MSME Samadhaan Procedure, which helps MSMEs receive timely payments from their buyers and reduce the number of pending disputes
In this article, we will delve into the details of the MSME Samadhaan procedure, including the application process, supporting documents, and dispute resolution mechanism.
We will also discuss the significance of the scheme for Indian MSMEs and how it can help them grow their businesses.
Under the MSME Samadhaan scheme or MSME Samadhaan Procedure, an MSME can file an application to claim unpaid dues against a buyer who is either a company or a limited liability partnership firm.
The application can be filed by the MSME if the payment is overdue for more than 45 days from the date of acceptance or the deemed date of acceptance of goods or services as per the agreement between the parties.
The application can also be filed for disputes arising from the supply of goods or services to the buyer.
The application for MSME Samadhaan can be filed online through the MSME Samadhaan portal or offline by submitting a physical application to the concerned authority. The portal provides a user-friendly interface for filing the application and tracking its status.
The application must include the details of the MSME, such as name, address, contact details, PAN number, GSTIN number, and bank account details. It should also include the details of the buyer, such as name, address, contact details, PAN number, and GSTIN number. The application should mention the amount due to the MSME and the date from which the payment was due.
The application must be accompanied by relevant documents supporting the claim, such as purchase orders, invoices, delivery challans, and any other document as required by the authority.
The application should also include a declaration stating that the information provided in the application is true and correct to the best of the applicant’s knowledge.
The concerned authority will issue a notice to the buyer within two days of receiving the application.
The notice will mention the details of the application and direct the buyer to file a reply within fifteen days from the date of receipt of the notice. The reply should include the reasons for non-payment or the dispute, along with supporting documents.
If the buyer fails to file a reply within the specified time or does not respond, the authority starts conciliation proceeding and if conciliation proceedings fails an arbitration proceeding.
The matter is adjudicated in arbitration proceedings and award is passed accordingly.
In some states authorities follows the following procedure:
when buyer fails to respond, the authority pass an ex-parte order in favor of the MSME. However, if the buyer files a reply, the authority will hear both parties and pass an appropriate order within sixty days from the date of receipt of the application.
The order passed by the authority is final and binding on both parties. If the buyer fails to comply with the order, the authority may issue a certificate of recovery to the district collector, who shall recover the amount due as arrears of land revenue.
The MSME Samadhaan scheme has been helpful for MSMEs in receiving timely payments and resolving disputes with their buyers.
The scheme has reduced the burden of pending dues on MSMEs and has provided a quick and efficient mechanism for resolving disputes.
With the implementation of the scheme, MSMEs can focus on their business growth and take up more business opportunities without the fear of delayed payments.
The scheme has also been instrumental in boosting the confidence of MSMEs and encouraging them to participate in government initiatives and schemes. MSMEs form the backbone of the Indian economy, contributing significantly to employment generation, exports, and GDP.
The timely payments and dispute resolution mechanism provided by MSME Samadhaan help MSMEs to grow their businesses and contribute more to the economy.
The MSME Samadhaan scheme has also been helpful in promoting the ease of doing business in India. The scheme provides a user-friendly portal for filing applications and tracking their status. The scheme has reduced the time and cost involved in resolving disputes and has provided a transparent mechanism for resolving disputes.
The MSME Samadhaan scheme or MSME Samadhaan Procedure has been a game-changer for Indian MSMEs, providing them with a quick and efficient mechanism for resolving disputes and receiving timely payments.
The scheme has reduced the burden of pending dues on MSMEs and has boosted their confidence in participating in government initiatives and schemes.