IndiaFilings for SME payments

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#Organizer : India FIllings

MSME Payment Terms
The Government has placed enormous importance for the protection and development of Micro, Small and Medium Enterprises in the MSMED Act. And, did you know, micro, small and medium enterprises (MSME) enjoy protection from delayed payments under the MSMED Act? Read through this article to know more about delayed payments to MSME businesses.

Delayed Payments to Micro, Small and Medium Enterprises
If any micro or small enterprise that has MSME registration supplies any goods or services, then the buyer is required to make payment on or before the date agreed upon between the buyer and the micro or small enterprise. In case there is no payment date on the agreement, then the buyer is required to make payment within fifteen days of acceptance of good or services. Further, in any case, a payment due to a micro or small enterprise cannot exceed forty-five days from the day of acceptance or the day of deemed acceptance.

Penal Interest on Delayed Payment to MSME Enterprise
In case of failure by the buyer to make payment on time, the buyer is required to pay compound interest with monthly interest rests to the supplier on that amount from the agreed date of payment or fifteen days of acceptance of goods or service. The penal interest chargeable for delayed payment to a MSME enterprise is three times of the bank rate notified by the Reserve Bank of India.

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