Dear Entrepreneurs, as we all know, after lockdown, MSME Industries are facing many challenges to survive in this competitive Market. Along with this, they are facing cash crunch. Even large enterprises are not able to meet their payment commitments within their payment cycle period. Some large enterprises are taking benefits of this critical situation and harassing MSME Enterprises.

Also Read: MSME Samadhaan: Tool to Recover Outstanding dues for MSME Enterprises

To help MSME Enterprises, Government of India has already taken many steps so that, these enterprises will get their outstanding dues within specified time period. For getting benefit of this Scheme, your enterprises must falls under the definition of Micro Small and Medium Enterprises as defined under Section -7 of MSMED ACT, 2006. If your enterprise is covered under MSMED Act, then this article will help you in recovering your outstanding dues, which are pending for more than 45 days.

As per a recent survey, small and medium enterprises are facing cash crunch situation, because they are not receiving their dues within the decided time period, which creates hurdle even in their growth as well as in survival in this competitive market.  To improve payment cycle, the Government of India has taken many initiative but its effects are not very much visible in practical situation, the reason for this is, either the procedural part is so much time consuming like court case or they are not aware about these initiatives.

In today’s topic, we will discuss about MSMED Act, 2006, which is a very good initiative taken by Government of India to help MSME Enterprises to file a complaint against person who defaults in making payment after the decided time period. The prerequisite for filing an application under MSME SAMADHAAN, your enterprises must be covered under MSMED Act, 2006 and you have a valid Udyam Registration.  This Scheme is launched and overviewed by Ministry of Micro Small and Medium Enterprises

Mandatory Details required while Filing an Application under MSME SAMADHAAN Online Portal

  • Udyam Registration/Udyog Aadhar number of Entity who wants to file Application
  • Mobile and mail accessibility, which is used at time of UAM Registration
  • Copy of Invoices under dispute along with proof of delivery/ receipt from buyer
  • Copy of Work order/ Purchase Order for which payment is under dispute
  • Complete address detail of Buyer and supplier along with mail and mobile detail (to be used for serving Notice) by concerned department

Eligibility and Benefits of filing Complain under MSME SAMADHAAN:

  • The Enterprises Must be covered under MSMED Act, 2006
  • The enterprises must have a Valid UAM/Udyam Registration before filing its application under this initiative
  • The buyer is liable to pay compound interest with the monthly rests to the supplier on the amount at the three times of the bank rate notified by RBI in case he does not make payment to the supplier for his supplies of goods or services within 45 days of the acceptance of the goods/service rendered
  • Every reference made to MSEFC shall be decided within a period of 90 days from the date of making such a reference as per provisions laid in the Act

When you submit your application then your application is forwarded to concerned department and they will issue notice to both parties (Buyer and Supplier) and try to resolve the disputed matter with mutual consent. If dispute is not sorted with mutual consent then concerned department will file a formal case against the buyer and further proceeding will be governed by MSMED Act, 2006

FAQ’s on MSME SAMADHAAN

1. I have manufactured and supplied material to a customer but I have not received any work order from them, whether submission of work order is mandatory while filing application under MSME SAMADHAAN?

 Yes, work order is compulsory. In case purchase order is oral an affidavit to that effect is to be submitted.

2. I am running a trading concern, whether a trading concern can file an application for recovery of their dues?

No, as on date only manufacturing and service sector is allowed to file application through this initiative 

3. Whether a legal notice by the supplier to buyer is necessary before filing the case in the Council?

No, Issuance of legal notice is not mandatory

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Disclaimer: This article is for the purpose of information and shall not be treated as a solicitation in any manner and for any other purpose whatsoever. It shall not be used as a legal opinion and not be used for rendering any professional advice. This article is written on the basis of the author’s personal experience and provision applicable as on the date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of other readers.

The Author “CA. Shiv Kumar Sharma” can be reached at mail [email protected] and Mobile/Whatsapp – 9911303737/ 9716118384

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Qualification: CA in Practice
Company: Shiv Kumar Sharma & Associates
Location: Delhi, Delhi, India
Member Since: 03 Dec 2018 | Total Posts: 68
My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. I have Qualified my B.Com (H) in 2010 And Cleared CS- Executive Exam in June 2013. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. View Full Profile

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