28 Apr 2022, 10:16 — 3 min read
30 April 2022 is the last date for a Company to file Form MSME-1 for the period October 2021 to March 2022 to disclose dues of more than 45 days to MSME Suppliers.
One of my clients reached out to me to help him with his recovery from one of his buyers where the buyer had defaulted the payment and it had been more than 2 years now.
My answer to this was "As per the MSMED 2006 Act under Sections 15 and 16, any buyer defaulting in the payment to the MSME registered supplier for more than 45 days from the agreement date or in writing of acceptance/deemed acceptance date, is liable to make the payment of the due amount plus monthly compound interest at three times the bank rate notified by the RBI". This means an interest of 12.75% (3 times of current bank rate of 4.25%) will be applicable as a monthly compound interest to the buyer.
My client's reaction to hearing this is, "I am just concerned for my due amount, an interest I do not think the buyer will pay and I am okay with it, just help me to recover my dues."
I explained to him and gave him the confidence that, "Do not worry the buyer is liable to make the payment to you in any case and he is entitled to pay the interest component as well to you"
Now the client is really happy that his money which was stuck for the past 2 years is now recovered.
Many of my MSME clients have recovered their old dues by filing their cases against their buyers.
Many MSMEs are either not aware of this clause of payment recovery or do not know the way to approach "MSME Samadhaan Portal - ease of filing an application under MSEFC, an initiative by the Ministry of MSME, Government of India, for their recoveries. Or they may not be very confident that after filing their complaint, whether it will get resolved or it will just add on extra work for them with a lot of back and forth.
The Government of India is trying all ways to help MSMEs big time. It's now the MSMEs turn to take advantage of all the help they can from the experts and get their business going.
The clock is ticking. File your MSME-1 Form today.
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Posted byCA Krishna Wadher
Krishna Wadher & Company is an Audit, Tax, and Accountancy firm. We cater to a wide gamut of companies in Telangana and other major cities of India. We provide services...