Recovering a delayed payment as a micro or small enterprise: MSME Samadhaan and the Facilitation Council

Last updated 24 Oct 2026 · India

Short answer. A micro or small enterprise registered on Udyam that is not paid within the agreed time (never more than 45 days from acceptance, section 15 of the MSMED Act 2006) can refer the dispute to the Micro and Small Enterprises Facilitation Council (MSEFC) under section 18, by filing online on MSME Samadhaan. The buyer owes compound interest with monthly rests at three times the bank rate notified by the RBI (section 16). The Council first tries conciliation, then arbitration, and should decide within 90 days of the reference. A buyer who wants to challenge the award must first deposit 75% of it (section 19).

Before you file

Your Udyam registration must show you as micro or small at the time of supply.
Keep the purchase order, invoices, delivery proof and any written acceptance.
Calculate the principal and section 16 interest month by month.

Steps

Send the buyer a written reminder quoting the invoice dates and section 15.
File the application on MSME Samadhaan with invoices and Udyam number; it goes to the MSEFC of your state.
Attend the conciliation hearing; if it fails, the Council arbitrates or refers it.

Common mistakes

Filing as a medium enterprise. The delayed-payment remedy is for micro and small suppliers.
No proof of acceptance date, which is where the 45-day clock starts.
Simple interest in the claim instead of compound interest with monthly rests.

Frequently asked questions

Who can file on MSME Samadhaan?

A micro or small enterprise with Udyam registration whose buyer has not paid within the time allowed by section 15 of the MSMED Act 2006.

What interest does a late-paying buyer owe?

Compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India (section 16).

How long does the MSEFC take?

The Act asks the Council to decide within 90 days from the date of the reference (section 18(5)).

Official sources

Not tax or legal advice. This is a free explainer of public rules; deadlines and rules can change by notification, so confirm on the official portal or with your CA before you file. Last checked 24 Oct 2026.

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