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.
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
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
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
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