45-day payment rule for micro and small suppliers under the MSMED Act 2006 45-day rule
A buyer must pay a micro or small supplier within the agreed time, never more than 45 days from acceptance, or within 15 days if nothing was agreed in writing, or owe heavy interest.
Last updated on
- Status
- Open
- Run by
- Ministry of MSME, enforced by state Micro and Small Enterprises Facilitation Councils
What you get
- If the buyer pays late, it owes compound interest with monthly rests at three times the bank rate notified by the Reserve Bank
- The supplier can take the dispute to the Facilitation Council for conciliation or mediation and then arbitration
- Buyers that are companies must report dues to micro and small suppliers that are more than 45 days old
- Late payment also delays the buyer's income tax deduction, see the Section 43B(h) record
Who can apply
- Businesses that are already running.
- Open to businesses in manufacturing and services.
- Micro and small enterprises.
- Udyam registration is needed. It is free.
- Covers micro and small suppliers. Medium enterprises are not covered by the interest rule.
- The supplier should hold Udyam Registration to file a case
How to apply
- Keep invoices, proof of delivery and any written payment terms
- File the claim online on the MSME ODR portal, which now takes new delayed payment cases
- Try settlement with the buyer through the portal's negotiation and mediation stages
- If not settled, the case goes to the Facilitation Council for arbitration
In person, Micro and Small Enterprises Facilitation Council of the state where the supplier is located
In Kerala, Kerala's Micro and Small Enterprises Facilitation Council hears cases. New cases are filed online on the MSME ODR portal.
Documents to keep ready
- Udyam Registration certificate
- Invoices
- Purchase orders or contracts
- Proof of delivery or acceptance
Worth knowing
Sections 15 and 16 are unchanged by the MSMED (Amendment) Act 2026.
Where we found this
- Guidelines on MSE Scheme on Online Dispute Resolution for Delayed Payments, restating the 15 and 45 day limits (external site) Official
- PIB, grievances and outstanding dues of MSEs through Samadhaan portal, 13 March 2023 (external site) Official announcement
- MSMED (Amendment) Bill 2026 as introduced, Bill No. LXXII of 2026 (external site) Official
- PIB, initiatives for rural and semi-urban MSMEs, sections 15 to 23 of the MSMED Act, 12 March 2026 (external site) Official announcement
An independent guide by The Company of Four, not a government website. Schemes change often, so check every detail on the official website before you apply. Links marked ↗ open external websites that we do not run, and we are not responsible for their content. Seen something out of date? Tell us and we will look into it.