Features of MSME SAMADHAAN: Who can apply?

Ashish M. Shaji

03 Sep, 2020

The Ministry of MSME (Micro, Small and Medium Enterprises) has launched the MSME delayed Payment Portal, i.e., MSME Samadhaan in a bid to empower Micro and small entrepreneurs to directly register their cases pertaining to delayed payments by Central Ministries/Dept./CPSEs (Central Public Sector Enterprises)/State Governments.

MSMED Act, 2006

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

According to the provisions, the buyer is liable to pay compound interest on a monthly basis to the supplier on the amount at three times of the bank rate as specified by the Reserve Bank if he doesn’t make payment to the supplier for the supplies of goods or services in 45 days of the day of acceptance of the goods or services or the deemed day of acceptance.

Micro and Small Enterprise Facilitation Council (MSEFC) should be established by state governments for the settlement of disputes on receiving references/filing on delayed payments as per section 20 and 21 of the Act.

Nature of assistance

Micro and Small Enterprise Facilitation Council (MSEFC) of a state will examine the case filed by the MSE unit and, after that, will issue directions to the buyer unit for payment of the due amount along with interest according to the provisions under the MSMED Act 2006.

Thus MSEFC is the implementing authority of the provisions of the Act. The council is chaired by the director of industries and is assisted by one or more officers/representatives of associations of Micro or Small industry.

MSME Samadhaan: Who can apply?

Any Micro or small enterprises having valid Udyog Aadhaar can apply for filing the online application against the buyer or purchaser of the goods/services. 

Salient features of MSME Samadhaan

The following are the features:

• According to section 16 of the MSMED Act 2006, the buyer is liable to pay the compound interest to the supplier at a rate that is three times of the rate of the bank notified by the Reserve Bank if the payment is not made to the supplier by the buyer for his supplies of goods or services in 45 days of the acceptance of the rendered goods/services.
•  Each state government is required to notify regarding:
• The authority for filing Entrepreneur Memorandum;
• The rules of Micro and Small Enterprise Facilitation Council; and
• The constitution of Micro and Small Enterprise Facilitation Council.
• All states/Union Territories have notified authority for filing Entrepreneur’s Memorandum, 33 states/Union Territories (except Arunachal Pradesh, Manipur and Assam) have notified rules of Micro and Small Enterprise Facilitation Council, and all 36 states/Union Territories have constituted  Micro and Small Enterprise Facilitation Council according to the provisions laid down in the MSMED Act of 2006.
• Every reference or case made to the Micro and Small Enterprise Facilitation Council will be decided in a period of 90 days from the date of making such a reference according to the provisions laid down in the Act.
• In case where the appellant (not being the supplier) wishes to file an appeal, no application to set aside any decree or award by the Micro and Small Enterprise Facilitation Council will be entertained by any court unless the appellant (not being the supplier) has deposited the 75% of the award amount with it.

MSME Samadhaan Portal

The ministry of MSME has taken the initiative to file an online application by the supplier MSE unit against the buyer of the goods or services before the relevant Micro and Small Enterprise Facilitation Council of his or her state/Union territory. It will be viewed by Micro and Small Enterprise Facilitation Council for their actions. It shall also be visible to Concerned Central Ministries, Dept., CPSEs, state government, etc. for pro-active actions.

The following procedure is followed under Micro and Small Enterprise Facilitation Council on the MSME Samadhaan Portal:

• An entrepreneur files the application to their respective council as per state, and after 15 days, the council will take action on such application.
• Online information shall be dispatched to both entrepreneur and respondent through an e-mail.
• The entrepreneur shall have the option of Mutual settlement where MSMEs can mutually settle the application before converting it into the case.
• The council can approve the application and convert it into a case.
•  The council may reject the Entrepreneur application.
• In case the application is converted into the case, an SMS and e-mail are sent to the Entrepreneur and respondent.
• If received offline application, the council can enter the case detail in the online portal.
•  The case hearing status or hearing dates will be updated by the council.
• The application or the case status can be viewed by the UAM number /case number by the entrepreneur.

Documents required to file the application of delayed payment

The following documents are required to file the application of delayed payment:

• Scanned PDF documents of work orders of respondent and invoices generated against those orders must be produced.
• The size of the document should not be more than 1 MB.
• A maximum of three work orders and three invoices can be uploaded.

Conclusion

Read our article:Detail Explanation about MSME Registration Process & Who Need to Register?