MSMED Act, 2006
Delayed Payment Provisions
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 contains specific provisions (Sections 15–17) obligating buyers to pay MSME suppliers within agreed timelines, subject to a statutory maximum of 45 days from the date of acceptance (or deemed acceptance) of goods/services. Where no written agreement exists, payment must be made within 15 days. Non-compliance attracts compound interest at three times the RBI bank rate with monthly rests — one of the highest penal interest rates in Indian commercial law.
- Section 15: Payment obligation — within agreed period, maximum 45 days from acceptance
- Section 16: Compound interest at 3× RBI bank rate (monthly rests) on delayed amounts
- MSME-1: Half-yearly return mandatory for companies with outstanding payments beyond 45 days; penalty ₹20,000 for non-filing
- MSME Samadhaan portal: Delayed payment monitoring and online complaint mechanism
- MSEFC (Micro and Small Enterprises Facilitation Council): Dispute resolution body; must decide within 90 days
● Tracked since May 12, 2026 · last seen August 07, 2026 · updates as the daily brief publishes
07 Aug '26
Lok Sabha approves MSME Bill to speed up payments, improve ease of business
Polity & Governance
03 Aug '26
Rajya Sabha clears MSME bill to fast-track payment disputes amid Opposition protests
Economics
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