As per MSMED act any micro or small enterprise that has MSME registration supplies any goods or services, then the buyer is required to make payment on or before the date agreed upon between the buyer and the micro or small enterprise. In case there is no payment date on the agreement, then the buyer is required to make payment within fifteen days of acceptance of good or services. Further, in any case, a payment due to a micro or small enterprise cannot exceed forty-five days from the day of acceptance or the day of deemed acceptance.
Penal interest for delayed payment
In case of failure by the buyer to make payment on time, the buyer is required to pay compound interest with monthly interest rests to the supplier on that amount from the agreed date of payment or fifteen days of acceptance of goods or service. The penal interest chargeable for delayed payment to a MSME enterprise is three times of the bank rate notified by the Reserve Bank of India.
The penal interest paid by the buyer or payable by the buyer is not allowed as a deduction under the Income Tax Act, making the burden, even higher.
Disclosure in annual statement
In case a buyer is required to get the annual accounts audited, then it is the responsibility of the buyer to disclose the following facts in the annual statement.
The principal amount and interest due thereon remaining unpaid to any micro or small supplier at the end of the accounting year;
The amount of interest paid by the buyer and the amount of delayed payments made by the buyer;
The amount of delayed payment interest due and payable;
If you do not see the mention of your organisation send a notice to the Managing director , Charted Accountants for mis representation of books of account
File your case
File your case online at MSME SAMADHAAN– Delayed Payment Monitoring System