If your enterprises fall under the definition of Micro Small and Medium Enterprises as defined under Section -7 of MSMED ACT, 2006, then this article will help you in recovering your outstanding dues, which are pending for more than 45 days. As per a report published in Today’s Economic Times (03/11/2019), small and medium enterprises are facing a 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. As per data published in the report, Indian firms have the worst payment record in the Asia Pacific. On average bases Indian firms take 67 days to get their payments against the global average of 65 days. To improve this situation the Government of India has taken many initiatives but its effects are not very much visible in a practical situation, the reason for this is that, either the procedural part is so much time consuming like a court case or they are not aware of these initiatives.
In today’s article, we are going to discuss a very good initiative taken by the Government of India to help MSME Enterprises to file a complaint against the 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 the MSMED Act, 2006 and you have a valid Udyog Aadhar Number.
Eligibility and Benefits:
Details required while Filing an Application under MSME SAMADHAAN
After successful submission of application, concerned department issue notice to both parties (Buyer and Supplier) and try to resolve the disputed matter with mutual consent. If a 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 the MSMED Act, 2006
FAQ’s on MSME SAMADHAAN
Yes, a work order is compulsory. In case of purchase order is oral an affidavit to that effect is to be submitted.
No, as on date only manufacturing and service sector is allowed to file an application through this initiative
No. The silence of the buyer is confirmation of liabilities upon him.
Yes. It is called award by mutual consent. It is a valid award and the buyer cannot make an appeal against it.
No, Issuance of legal notice is not mandatory
Source: Economic Times, MSMED Act, 2006, MSME Samadhaan
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