{"id":31099,"date":"2020-04-21T11:06:48","date_gmt":"2020-04-21T05:36:48","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=31099"},"modified":"2020-04-21T11:13:45","modified_gmt":"2020-04-21T05:43:45","slug":"msme-samadhaan-to-recover-pending-dues-from-customers-by-msmes","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/msme-samadhaan-to-recover-pending-dues-from-customers-by-msmes\/","title":{"rendered":"MSME SAMADHAAN to Recover Pending Dues from Customers by MSMEs"},"content":{"rendered":"<p class=\"has-drop-cap\">Being\nthe backbone of India, MSMEs play a pivotal part in strengthening the economy.\nWith over a spread of 63.4 million MSME units throughout the country, Micro, Small,\nand Medium Enterprises have attained a staunched position. MSME Sector\ncontributes approx. 24.63% from service activities and 6.11% of the manufacturing\nGDP. Also, <strong>MSMEs generate employment opportunities\nto around 120 million people.<\/strong> However, MSMEs have been facing an issue of\ndelayed payments of bills from the large scale companies. <strong>To facilitate the smooth functioning of MSME businesses, the Union Government\nlaunched the MSME Delayed Payment Portal called MSME Samadhaan<\/strong>. This blog will\nprovide a complete guide of the MSME Delayed Payment Portal.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">An Overview of MSME Samadhaan<\/h2>\n\n\n\n<p>MSME Delayed Payment Portal or MSME Samadhaan Portal was roll out to\nempower all the micro and small scale enterprises of India. It will enable\nmicro and small entrepreneurs to directly register their cases related to\ndelayed payments by Central Ministries\/ State Governments\/ Departments\/CPSEs.<\/p>\n\n\n\n<p><strong>The portal streamlines the\nprocess for MSMEs to recover pending dues from\ncustomers and let them <\/strong><strong>monitor the status\nof delayed payment in a more efficient manner<\/strong>. All the information on MSME\nSamadhaan Portal is accessible in the public domain to strive the moral\npressure on the defaulters. Besides, micro and small enterprises can also avail\nthe option to regulate their cases. It is an initiative to faster the disposal\nof MSME unpaid dues.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How does MSME Samadhaan\nPortal works?<\/h2>\n\n\n\n<p>Ministry\nof Micro, Small &amp; Medium Enterprises, took the initiative for filing online\napplications of MSE supplier units against the defaulted buyer of goods or services\nbefore the concerned MSEFC of their State\/UT. Thereby, the <strong>MSEFC Council verifies those applications and takes necessary actions\nto settle the disputes.<\/strong> The online applications are also available to the authorities\nof Central Ministries, CPSEs, Departments, State Government, for taking proactive\nmeasures. Let&rsquo;s take a look at the <strong>fundamental aspects <\/strong>of the Samadhaan portal:<\/p>\n\n\n\n<ul><li><strong>File Online Application:&nbsp;<\/strong>The entrepreneurs of MSEs can apply online for delayed payments using the MSME Samadhaan Portal. A user needs to have a valid Udyog Aadhaar Number with Aadhaar to file the application.<\/li><li><strong>Check the Case Status<\/strong>:&nbsp;The portal facilitates entrepreneurs to <a href=\"https:\/\/samadhaan.msme.gov.in\/MyMsme\/MSEFC\/MSEFC_Entrepreneur_status.aspx\"><strong><em>check the status<\/em><\/strong><\/a><strong><em> <\/em><\/strong>of their filed applications for delayed payments.<\/li><li><strong>Dashboard displaying the information of pending payments:<\/strong> The portal provides complete information about the pending payments of MSE with individual CPSEs (Central public sector enterprises), Central Ministries, State Governments, etc. The CEO of Public Sector Enterprises and the Secretary of concerned Ministries also monitors the cases of delayed payments under their jurisdiction, thus issue orders to resolve the issues.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Statutory Provisions of Delayed Payment under MSMED Act, 2006<\/h2>\n\n\n\n<p>Micro, Small and Medium Enterprise\nDevelopment Act abbreviated as MSMED Act, 2006 has laid down the provisions to\ndeal with the cases of delayed payments to MSEs, which are as follows:<\/p>\n\n\n\n<ul><li><strong>As per Section 16 of the MSMED Act, 2006<\/strong>,\na buyer is liable to pay a compounded interest, in case he\/she fails to make a\npayment to the MSE supplies <strong>within 45\ndays from the date of receiving the goods or service.<\/strong> The interest is\nmonthly augmented on the amount at three times of the bank rate as notified by\nthe Reserve Bank of India.<\/li><li>According to the provisions\nprescribed under <strong>Section 20 and Section\n21 of the Act<\/strong>, the <strong>State Governments\nneed to establish (MSEFC)<\/strong> Micro and Small Enterprise Facilitation Council.\nThe purpose of the establishment shall be to settle the disputes for the filing\nof delayed payments. Any MSE with a valid Udyog Aadhar Number (UAN) can leverage\nthe benefit of filing.<\/li><li><strong>Every reference made to the Micro and Small Enterprise Facilitation\nCouncil shall be adjudicated within 90 days <\/strong>from\nthe date of making that reference. MSEFC implements the provisions of the MSMED\nAct managed by the Director of Industries of each State\/UT.<\/li><li>Each State\/UT has notified authority\nfor filing Entrepreneurs Memorandum. Around 33 States or Union Territories (except\nAssam, Arunachal Pradesh and Manipur) have notified rules of MSEFC and\nconstituted MSEFCs by following to the provisions laid down under MSMED Act\n2006.<\/li><li>State Governments notifies <strong>(i) Authority for filing Entrepreneur\nMemorandum (ii) Rules of MSEFC and (iii) Constitution of MSEFC.<\/strong><\/li><li>Section 19 states that if an\nAppellant files an appeal, then no court shall entertain his\/her application\nfor setting aside any decree or award, order by the MSEFC until the appellant\n(not being supplier) <strong>has deposited with\nit, 75% of the decree or award amount. <\/strong><strong><\/strong><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Checklist of Documents Required <\/h2>\n\n\n\n<p>Documentation is an essential part of\nfiling an application of delayed payment, so ensure to affix these documents:<\/p>\n\n\n\n<ul><li>Applicant\nMSE must submit a scanned PDF document of work orders of respondent and invoices\ngenerated against them.<\/li><li>The size\nof the document must not be more than 1 MB.<\/li><li>Applicants\ncan upload a maximum of 3 work orders and 3 invoices.<\/li><\/ul>\n\n\n\n<div class=\"read\"><p><b>Read, Also:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/msme-suppliers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mandatory submission of details of the amount due to MSME Suppliers&#65279; Online<\/a><\/mark>.<\/p><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Eligibility Criteria to file application on MSME Samadhaan Portal<\/h2>\n\n\n\n<p>Any micro or small enterprise (MSE) <strong>with a valid Udyog Aadhar Number can file an\nonline application against the purchaser\/buyer of goods &amp; services<\/strong>\nbefore the concerned MSEFC of his\/her State\/UT. The submitted applications are\nreviewed by the MSEFC Council. Moreover, Central Ministries, Departments, State\nGovernments, CPSEs have access to those applications filed to take imperative\nactions. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">MSME Samadhaan- a sigh of relief for SMEs<\/h3>\n\n\n\n<p>The central purpose of launching the delay\npayment portal was to reinforce micro and small enterprises. It has given an\nauthority to SMEs to file a case relating to delayed payments against defaulted\ncustomers and claim their unpaid dues with the help of government bodies. <strong>The Ministry of MSME set up a delayed payment\nportal, MSME Samadhaan, on 30<sup>th<\/sup> October 2017.<\/strong> It acted as a boon\nfor several MSEs who were not able to claim their payments.<\/p>\n\n\n\n<p>Hitherto, over 27,693 applications in\nregards to unpaid dues worth INR 7,212.23 Crores have been filed by (MSEs)\nmicro and small enterprises as per the statistical data of MSME Samadhaan Portal.\n&nbsp;From which 1,532 applications have been\ndisposed of by the MSEFC while 4,474 applications were rejected and around 2,241\ndue cases were mutually settled with the buyers. Hence, <strong>only 7,447 cases are presently under consideration by MSEFC.<\/strong><\/p>\n\n\n\n<p>As mentioned earlier, no medium-scale enterprise\ncan submit an application at Samadhaan, and only micro &amp; small enterprises\nwith Udyog Aadhaar Number (UAN) are eligible. UAN refers to a unique identity\nnumber which is acquired post-registration for (UAM) Udyog Aadhaar Memorandum.<\/p>\n\n\n\n<p>MSME registration for Udyog Aadhaar Memorandum\nwas started back in September 2015. However, only 7.7 million micro and small\nenterprises have registered under it. Since there are around 63.3 million MSMEs\nin India, <strong>it indicates that around 12%\nof MSMEs are eligible to apply to Samadhaan Portal.<\/strong><\/p>\n\n\n\n<p>The Reserve Bank of India also established an\nonline platform, TReDS, in March 2014 to ease the discounting of invoices and\nbills of MSME suppliers. It is a financial arrangement wherein an MSME seller\nrecovers the amount of the sales bill from a financial intermediary, after\npaying a fee or discount before it is due.<\/p>\n\n\n\n<p>Receivables Exchange of India Ltd is the\nfirst TReDS platform that was incorporated on 26<sup>th<\/sup> February 2016.\nThe &lsquo;Strategy for New India @75&rsquo;, was prepared by NITI Aayog, which clearly\nstates that the Department of Public Enterprises must ensure the registration\nof all the public sector units on the TReDS portal.<\/p>\n\n\n\n<p>The system entails three parties, MSME\nsuppliers, financiers and corporate buyers. Once the corporate buyer accepts\nthe invoice, the financier discounts the invoice and the MSME supplier uploads\nthe bills. The process was lengthy and complex as it involves various stages\nand interactions between three parties. <\/p>\n\n\n\n<p>Further, the financing and discounting\ncharges are bored by the MSME suppliers, reduces their earnings. It deters\nnumerous MSMEs from using the TReDS portal and drives them to reach out to the informal\nfinancers for invoice discounting, which enables immediate payment.<\/p>\n\n\n\n<p>As per a\nnotification issued by the MSMEs ministry on the 2nd November 2018, only the\nregistered companies under the Companies Act 2013 having a turnover of over INR\n500 crore can board the TReDS platform, which ultimately excluded many MSMEs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A peek into the future of MSMEs<\/h2>\n\n\n\n<p>Central\nand State Governments jointly work together for the welfare of MSMEs. They have\ndeveloped well-publicised schemes to foster the growth of MSMEs. Some of the\nGovernment schemes that help to shape the future of MSMEs are:<\/p>\n\n\n\n<ul><li><strong>Udyog Aadhar Memorandum Scheme- <\/strong>To streamline the process of MSME Registration<strong>.<\/strong><\/li><li><strong>Zero Defect Zero Effect Scheme<\/strong>&ndash; It is a unique scheme that objects to ensure that the manufactured goods have zero defects and are seamless in terms of quality. Also, they should be environment-friendly so that there is a &ldquo;zero effect&rdquo; on the environment.<\/li><li><strong>Credit Linked Capital Subsidy Scheme- <\/strong>MSME<strong> <\/strong>entrepreneurs are provided with 15% of subsidy to embody advanced technology.<\/li><li><strong>MUDRA Yojana<\/strong>&ndash; This scheme provides funds to the unfunded businesses and brings such enterprises to the formal financial system by extending affordable credit services to them.<\/li><li><strong>&nbsp;MSME59\/PSB59<\/strong>&ndash; It is an initiative for processing loan applications of Micro, Small and Medium Enterprises within 59 minutes.<\/li><li><strong>PMEGP- <\/strong>Provides subsidies for commencing the project cost partially.<\/li><li><strong>TReDS portal- <\/strong>It grants factoring services in case of delayed payment.<\/li><li><strong>MSME Samadhaan Portal-<\/strong> Aims to address the issues related to delayed payment from the government agencies.<\/li><\/ul>\n\n\n\n<p>All the\nabove-mentioned schemes have overlapping purposes of addressing the financial\nproblems of MSMEs. It can lead to confusion amongst the beneficiaries and implementing\nagencies. Moreover, it may increase the administrative costs since each scheme\nrequires its own staff and seal the deal with beneficiaries. Henceforth, it is\nindispensable to simplify the MSMSE schemes and policies.<\/p>\n\n\n\n<p>As per\nthe research conducted at the Institute for Studies in Industrial Development,\na single-window solution must address the issues of delayed payments from both\n<a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> players and the Government by encompassing an online payment, delayed\npayment redressal and invoice discounting.<\/p>\n\n\n\n<p>Under\nsuch an online payment portal, both buyers and sellers could be able to\nregister. After the seller makes a business transaction and uploads invoices\nfor the same, MSMEs must get an option for invoice discounting if the buyer does\nnot release the payment immediately or within the agreed time frame.<\/p>\n\n\n\n<p>According\nto the statutory guidelines, if there is any delay in payment, then the issue\nshould automatically move to Samadhaan Portal for redressal with an alert to\nboth the supplier and buyer. <\/p>\n\n\n\n<p>There is a need to spread awareness of MSME online platforms through campaigns as many small and micro-entrepreneurs are not aware of them. The system of digitization will be a perfect fit for MSMEs that can ease their operation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Final Thoughts<\/h3>\n\n\n\n<p>Gone are the days when the large entities could overpower MSMEs by delaying their payments. MSMED Act, 2006 has made some stringent provisions for timely payments and initiated measures like Samadhaan and NeSL IU. Thereby, MSMEs no longer have to meek for timely payments from their customers. It facilitate the development and promotion of MSMEs and provides them a competitive edge.  You can also avail the benefits of Government Schemes by registering under the MSMED Act, 2006. For legal assistance in <strong><em><a href=\"https:\/\/enterslice.com\/msme-registration\">MSME Registration<\/a><\/em><\/strong>, consult Enterslice. <\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/all-you-need-to-know-about-msme-loan\/\" target=\"_blank\" rel=\"noopener noreferrer\">All you Need to Know About MSME Loan<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Being the backbone of India, MSMEs play a pivotal part in strengthening the economy. With over a spread of 63.4 million MSME units throughout the country, Micro, Small, and Medium Enterprises have attained a staunched position. MSME Sector contributes approx. 24.63% from service activities and 6.11% of the manufacturing GDP. Also, MSMEs generate employment opportunities [&hellip;]<\/p>\n","protected":false},"author":47,"featured_media":31102,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[2928],"acf":{"service_id":"71"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>MSME SAMADHAAN to Recover Pending Dues From Customers<\/title>\n<meta name=\"description\" content=\"the Union Government launched the MSME Delayed Payment Portal called MSME Samadhaan. 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