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Buyers to face heavy penalty for delaying payment to MSMEs: MSEFC chairperson

The Micro and Small Enterprises Facilitation Council on Saturday warned that the delay in payments for supplies received from the Micro Small and Medium Enterprises would invite heavy penalty against defaulting buyers.  

PTI Reported by: PTI Jammu Published on: May 16, 2020 19:19 IST
Buyers to face heavy penalty for delaying payment to MSMEs: MSEFC chairperson
Image Source : PTI (FILE)

Buyers to face heavy penalty for delaying payment to MSMEs: MSEFC chairperson (Representative image)

The Micro and Small Enterprises Facilitation Council on Saturday warned that the delay in payments for supplies received from the Micro Small and Medium Enterprises would invite heavy penalty against defaulting buyers.

“In case the buyer fails to make payment as required under Section 15 of the Micro Small and Medium Enterprises Development Act, the buyer is liable to pay compound interest with monthly rests to the supplier for delayed period beyond 45 days, on the amount, payable at three times the bank rate notified by Reserve Bank of India as provided under Section 16 of the MSMED Act, 2006,” a circular issued by MSEFC Chairperson Anoo Malhotra said.

As per section 15 of the MSMED Act, the buyer would make payment to the supplier for the supply of goods and services within 45 days from the day of their receipt.

The circular directed buyers including the government departments, public sector undertakings, autonomous bodies, agencies or other industrial units “in their own interest” to “release the due payments of Micro & Small Enterprises well within 45 days of acceptance of goods so as to avoid penalty in the shape of interest at the rate of three times the rate notified by the RBI for the period of delay”.

It said the case filed by an aggrieved MSE, the default of payment by the concerned department is reflected on the SAMADHAN portal of MSME where the Union minister of MSME himself monitors the progress regularly.

“Any act of blacklisting the appellant unit or denying any future opportunity for supplies to such MSE by the department or corporation shall solely be the responsibility of the concerned officer; as such actions are not taken well by the Department of MSME, the Government of India,” the circular warned.

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