Are you a business owner who has registered with Udyam Registration and whose clients refuse to pay their debts on time?
You may be one of the many MSMEs who experience this issue when conducting business in India. A structure and provisions have been established by the Ministry of MSME through The Micro, Small and Medium Business Development Act of 2006 to help MSMEs deal with the issue of potential bad debts or delayed payments. The Government is aware that this issue has been impending MSMEs’ growth, and that the atmosphere it fosters is not good for the expansion of businesses in India. The MSME Development Act of 2006 has several provisions designed to assist MSMEs with this issue.
The provision under the act
The Micro, Small and Medium Enterprise Development Act of 2006, which is divided into Sections 15 to 24, establishes a provision for Delayed Payment to Micro and Small Enterprises and mandates that state governments create the Micro and Small Enterprise Facilitation Council [MSEFC] for the purpose of settling and resolving disputes related to non-payment or delayed payment to MSMEs.
According to the guidelines established by the MSMED Act of 2006, the state’s MSEFC will review the complaint and give the buyer instructions for making the required payment along with interest.
Let’s start by determining who is qualified to receive the advantages provided by this law.
All MSMEs who possess a current Udyam Registration Certificate are qualified to participate in this programme and get rewards.
Procedure of applying
The Download and print Udyam Registration Certificate can be used to register a case on the MSME Samadhaan Portal, which was created by the Ministry of MSME.
Each case’s process –
Upon the filing of a case, the following steps are taken:
The application is forwarded to the appropriate council, and it takes this council 15 days to take its first official action on the matter.
By mail or email, both the Entrepreneur and the Buyer will be informed.
Before registering a case, the Council will give the Entrepreneur the option to amicably resolve the application. If the buyer refuses to cooperate, the entrepreneur may instruct the council to file a complaint. Alternatively, the entrepreneur may decide to resolve the issue amicably and inform the council accordingly.
The Council will decide whether to register a case after considering the application’s merits.
The Council has the authority to reject an application if it lacks merit.
Following the registration of the case, the council sends a second notification to the Entrepreneur and the buyer through SMS and email.
The council will choose a date for the hearing after receiving responses from all parties or just one party.
The council will deliberate before reaching a conclusion. The council will reach a conclusion based on the legal justifications and evidence included with the application if any of the parties choose not to respond.
A total of 94,426 applications have been submitted so far in this.
Out of these, 9246 applications have been mutually settled by the buyer, while the Council rejected 19155 applications due to insufficient qualities.
There are currently 41467 cases pending, totaling Rs. 14839.15 Cr., while 13807 cases have already been resolved. The parties are still required to respond in the other open cases.
Several Important Elements of MSME Samadhaan That We May Have Missed
If found guilty, the buyer will be required to pay the supplier compound interest at a rate that is three times the bank rate announced by the RBI, in addition to the monthly interest.
Every case referred to the MSEFC must be resolved within 90 days of the day the referral was made.
If someone other than the provider wishes to appeal, such application will not be accepted by the MSEFC unless the appellant has paid a deposit equal to 75% of the award.
To be able to assist in the implementation of this and other similar programmes for the advantages of MSMEs in India, the Ministry of MSME is promoting Udyam Registration on such a big scale throughout India. Using the Udyog Aadhaar and Udyam Registration systems, the government of India seeks to foster an atmosphere that is conducive to business. Every Udyami, as the government likes to refer to registered MSMEs, is a crucial component of the economy and must never be disregarded.
In conclusion, the implementation of the Udyam Registration process has provided MSMEs with various benefits and support measures, including access to schemes like MSME Samadhaan. This scheme is a useful tool for Udyam Registration holders to recover delayed payments from buyers and help maintain their financial stability. By registering under the Udyam scheme and availing of such benefits, MSMEs can mitigate the risks of delayed payments and ensure their long-term growth and sustainability.
MSME Samadhaan provides a simplified mechanism for MSMEs to recover their dues, thereby helping them overcome cash flow problems and stay afloat. Hence, Udyam Registration holders should make the most of this scheme and utilize its benefits to improve their financial health and contribute to the growth of the Indian economy.