Posted On: 08 DEC 2022 12:57PM by PIB Delhi

Micro and Small Enterprises (MSEs) can file applications in Micro and Small Enterprise Facilitation Councils (MSEFCs) for delayed payments. After the application is admitted by the MSEFCs, it becomes a case. The details of applications/cases filed on SAMADHAAN Portal from 30.10.2017(launch date) to 05.12.2022 are as follows :-

As per the Section 21 (1) of the Micro, Small & Medium Enterprise Development Act, 2006 (MSMED Act, 2006), the Micro and Small Enterprises Facilitation Council (MSEFC) shall consist of not less than three but not more than five members.

Under the provisions of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, Micro & Small Enterprises Facilitation Councils (MSEFCs) have been set up in the States/UTs to deal with cases of delayed payments of the Micro and Small Enterprises (MSEs).

Ministry of MSME launched SAMADHAAN Portal on 30.10.2017 (http://samadhaan.msme.gov.in/MyMSME/MSEFC/ MSEFCWelcomer.aspx.) for monitoring of the outstanding dues to the MSEs from the buyers of goods and services.

The Ministry of MSME created a special sub-portal within Samadhaan portal on 14.06.2020, after the Aatma Nirbhar Bharat announcements, for reporting the dues and monthly payments by central Ministries/Department/Public Sector Enterprises to MSMEs. Dues of Rs. 1,65,034.09 crore have been paid to MSME vendors by Government Ministries/ Departments/CPSEs from May 2020 till 05th December, 2022.

The Ministry of MSME has also been urging States/UTs to set up more number of Micro & Small Enterprises Facilitation Councils for quicker disposal of cases related to delayed payments. So, far 113 MSEFCs have been set up, with more than one MSEFC having been set up in Delhi, Jammu & Kashmir, Karnataka, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana and U.P.

Government of India has also instructed CPSEs and all companies with the turnover of Rs. 500 Crore or more to get themselves on-boarded on the Trade Receivables Discounting System (TReDS), an electronic platform for facilitating the discounting of trade receivables of MSMEs through multiple financiers.

Companies which get supplies of goods or services from Micro & Small Enterprises and whose payment to Micro and Small Enterprises exceeds 45 days from the date of acceptance or the date of deemed acceptance of the goods or services, also need to submit a half yearly return to the Ministry of Corporate Affairs stating the amount of payments due and the reasons of the delay.

The Ministry is regularly following up with the State Governments & UTs for timely disposal of such cases.

The Ministry of Micro,Small & Medium Enterprises (MSME) has launched MSME Delayed Payment Portal – MSME Samadhaan for empowering micro and small entrepreneurs across the country to directly register their cases relating to delayed payments by Central Ministries/Departments/CPSEs/State Governments.

MSMED Act 2006 - Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 contains provisions to deal with cases of delayed payment to Micro and Small Enterprises (MSEs).

As per the provisions, the buyer is liable to pay compound interest with monthly rests to the supplier on the amount at three times of the bank rate notified by Reserve Bank in case he does not make payment to the supplier for the supplies of goods or services within 45 days of the day of acceptance of the goods/service or the deemed day of acceptance.

State Governments are to establish Micro and Small Enterprise Facilitation Council (MSEFC) for settlement of disputes on getting references/filing on Delayed payments. (Section 20 and 21).

Any Micro or small enterprise having valid Udyog Aadhar (UAM) can apply. MSEFC of the State after examining the case filed by MSE unit will issue directions to the buyer unit for payment of due amount along with interest as per the provisions under the MSMED Act 2006.

Every reference made to MSEFC shall be decided within a period of ninety days from the date of making such a reference as per provisions laid in the Act.

The provisions under the Act are implemented by MSEFC chaired by Director of Industries of the State /UT having administrative control of the MSE units.

MSME Samadhaan Portal - Ministry of MSME has taken an initiative for filing online application by the supplier MSE unit against the buyer of goods/services before the concerned MSEFC of his/her State/UT. These will be viewed by MSEFC Council for their actions.

These will be also visible to Concerned Central Ministries, Departments, CPSEs, State Government, etc for pro-active actions.

Features - File online application by MSME : Entrepreneurs / MSE can file online applications for delayed payments using the portal. A user is to have Udyog Aadhaar Number that is validated with Aadhaar to file application.

Check case status : Entrepreneurs / MSE can check status of the filed online applications for delayed payments using the portal.

Dashboard of pending payments : The Portal will give information about the pending payment of MSEs with individual CPSEs / Central Ministries, State Governments, etc.

The CEO of PSEs and the Secretary of the Ministries concerned will also be able to monitor the cases of delayed payment under their jurisdiction and issue necessary instructions to resolve the issues.

Related Provision - The Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 contains provisions of Delayed Payment to Micro and Small Enterprise (MSEs). (Section 15- 24). State Governments to establish Micro and Small Enterprise Facilitation Council (MSEFC) for settlement of disputes on getting references/filing on Delayed payments. (Section 20 and 21)

Nature of assistance - MSEFC of the State after examining the case filed by MSE unit will issue directions to the buyer unit for payment of due amount along with interest as per the provisions under the MSMED Act 2006.

Who can apply - Any Micro or small enterprise having valid Udyog Aadhar(UAM) can apply.

Salient Features - 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. (Section 16)

State Governments to notify (i) Authority for filing Entrepreneur Memorandum (ii) Rules of MSEFC and (iii) Constitution of MSEFC.

All States/UTs have notified Authority for Filing Entrepreneur's Memorandum, 33 States/UTs (i.e. except Arunachal Pradesh, Assam and Manipur) have Notified rules of MSEFC and all the 36 States/UTs have constituted MSEFCs, as per provisions laid down under MSMED Act 2006.

Every reference made to MSEFC shall be decided within a period of ninety days from the date of making such a reference as per provisions laid in the Act.

If the Appellant (not being the supplier) wants to file an appeal, no application for setting aside any decree or award by the MSEFC shall be entertained by any court unless the appellant (not being supplier) has deposited with it, the 75% of the award amount. (Section 19)

Implementation - The provisions under the Act are implemented by MSEFC chaired by Director of Industries of the State /UT having administrative control of the MSE units. State Government/UTs are requested to ensure that the MSE Facilitation Council hold meetings regularly and delayed payment cases are decided by the Councils within a period of 90 days as stipulated in the MSMED Act, 2006.

MSME Samadhaan Portal - Ease of filing application under MSEFC, an Initiative from Ministry of MSME, Govt. of India

Ministry of MSME has taken an initiative for filing online application by the supplier MSE unit against the buyer of goods/services before the concerned MSEFC of his/her State/UT. These will be viewed by MSEFC Council for their actions.

These will be also visible to Concerned Central Ministries, Departments, CPSEs, State Government, etc for pro-active actions.