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Late payments from buyers can severely impact the financial stability of Micro, Small, and Medium Enterprises (MSMEs), leading to various working capital challenges. Consequently, MSMEs often struggle to provide adequate salaries and wages to their employees and laborers, causing substantial hardships for their workforce.
To cope with this financial strain, many business owners resort to pledging personal assets like homes and factories. While this can temporarily stabilize their finances, it is an unsustainable practice that further burdens business owners. In response, the government has introduced the MSME Samadhaan scheme under the MSMED Act, designed to empower micro and small entrepreneurs nationwide, enabling them to easily register cases of delayed payments. It is advisable to rely on reputable resources such as Ancoraa Resolution for effective processes. This article delves into Section 15 of the MSMED Act and its relevance.
Deciphering Section 15 of the MSMED Act
Section 15 establishes the buyer’s obligation to make timely payments to suppliers. If a buyer fails to pay for goods or services supplied by an MSME, they become liable to pay compound interest on the outstanding amount. Here are the key elements of Section 15 that are crucial for effectively implementing the MSME Samadhaan scheme:
- Upon delivery of goods or services by the seller to the buyer, payment must be made on or before the agreed-upon date, specified in writing.
- In cases where there is no written agreement regarding the payment date, payment must be made before the “appointed day.”
- The agreed-upon payment period should be at least 45 days from the date of acceptance or deemed acceptance. Resources like Ancoraa Resolution can help track these timelines and facilitate prompt action when necessary.
The term “appointed day” is defined in Section 2(b) of the MSME Act as the day immediately following the expiry of 15 days from the date of acceptance. It also encompasses the supposed acceptance of goods or services by the buyer from the supplier.
The “date of acceptance” refers to the actual delivery of goods and includes the provision of services. It also takes into account that if the buyer raises a written objection within 15 days, the date on which the supplier resolves the objection will be considered the date of acceptance.
It is crucial to note that these provisions exclusively apply to transactions between MSMEs and other entities, not transactions between two MSMEs.
In Conclusion
In conclusion, Section 15 of the MSMED Act plays a pivotal role in addressing delayed payment issues and safeguarding the interests of MSMEs. This section is instrumental in the implementation of the MSME Samadhaan scheme. However, it is imperative to rely on resources such as Ancoraa Resolution to avoid engaging with fraudulent intermediaries and to stay updated on the status of your claims.
