Questions suppliers and buyers ask

MSME Samadhaan is the Ministry of MSME's delayed-payment portal, launched on 30 October 2017. Micro and small enterprises used it to file applications against buyers, which went to the state Facilitation Councils. New applications are now filed on the MSME ODR portal. Samadhaan still tracks older applications and publishes national statistics.

The Online Dispute Resolution portal (odr.msme.gov.in), launched on 27 June 2025, runs the whole claim online: filing, an optional pre-Council negotiation stage, conciliation, arbitration, notices and hearings. You log in with your Udyam or Udyam Assist registration. See how filing works.

A Micro and Small Enterprises Facilitation Council is a statutory body each State sets up under Section 20 of the MSMED Act, with three to five members. It conciliates delayed-payment disputes and, if conciliation fails, arbitrates them or refers them to an arbitration institution. There are 161 Councils across States and Union Territories.

There is no portal fee to file. Some Councils charge documentation or application fees. Under the ODR scheme the Ministry offers micro and small enterprises a one-time grant of up to ₹4,000 towards those costs, claimed after the case concludes.

A micro or small enterprise (by investment and turnover) in manufacturing or services, registered on Udyam or the Udyam Assist Platform, that supplied goods or services to a buyer in India and was not paid by the due date. Try the eligibility check.

No. A "supplier" under Section 2(n) is a micro or small enterprise only. A medium enterprise can still use a commercial suit or insolvency proceedings.

Generally not. Retail and wholesale traders can register on Udyam, but the Ministry's Office Memorandum of 2 July 2021 limits their benefits to priority-sector lending. If you manufacture and also trade, what you supplied to this buyer matters.

Supplies made after your registration are on firm ground. For earlier supplies the law is unsettled: Silpi Industries (2021) and Mahakali Foods (2022) said a later registration works only prospectively, while NBCC (2025) said registration is not a precondition to a reference and sent the question to a larger bench. Details.

No. A buyer is anyone who buys goods or receives services from you for consideration: a large company, a firm, an individual, a government department or a PSU, located anywhere in India.

Yes. Government buyers are not exempt from Sections 15 to 17. Dues owed by central ministries, departments and central PSUs are also tracked through Samadhaan's monthly reporting, and the 2026 amendment requires central PSUs to settle MSME invoices through TReDS once notified.

Not usually. Section 18(4) gives the Council jurisdiction over buyers "located anywhere in India". Export receivables need contractual, arbitral or court remedies, and possibly export credit insurance.

Compound interest with monthly rests at three times the RBI Bank Rate, from the day after the due date. With the Bank Rate at 5.75% from 7 October 2026, that is 17.25% a year, an effective 18.68% with monthly compounding. Use the calculator.

No. The agreed credit period cannot exceed 45 days from acceptance (Section 15), and Section 16 interest applies "notwithstanding anything contained in any agreement". Section 24 gives Sections 15 to 23 overriding effect.

Yes. The interest for the period of delay is part of the amount due under Section 17, so it can be referred to the Council on its own, within limitation for arbitration.

For arbitration, generally three years from the due date, extended by a written acknowledgment or a part-payment. Conciliation is not subject to limitation, so an older claim can still be referred and settled (Sonali Power, 2025). Details.

Yes, interest you receive is your income. When it is taxed depends on your method of accounting and on whether the claim is disputed, so plan it with your tax adviser. For the buyer, the same interest is never deductible (Section 23).

An arbitral tribunal, including a Council acting as one, can award costs under Section 31A of the Arbitration and Conciliation Act. Ask for them in the statement of claim and keep a record of what you spend.

The Act sets a 90-day target from the reference, and the 2026 amendment adds stage-wise limits once notified. In practice it depends on the Council's calendar, service of notices and the buyer's conduct. Many matters settle at conciliation. Timelines.

The Council of the area where you, the supplier, are located, as shown in your registration, even if the buyer is in another state (Section 18(4)). An arbitration clause in the contract does not change this (Mahakali Foods).

The ODR portal supports online notices, negotiation and virtual hearings, and the 2026 amendment lets the Centre notify a full online mechanism. How much is online in practice still varies from Council to Council.

Yes, under Section 34 of the Arbitration Act, but only after depositing 75% of the awarded amount with the court (Section 19), which the Supreme Court treats as mandatory. A writ petition is not a way around it (India Glycols, 2023), though a larger bench is reviewing that bar.

The award is executed like a civil-court decree under Section 36 of the Arbitration Act, through attachment of bank accounts or property. Once notified, the 2026 amendment also allows recovery as arrears of land revenue through the District Collector, and treats the amount as a debt under the Insolvency and Bankruptcy Code.

You can file yourself. The portal is designed for that. Professional help pays off when amounts are significant, records are messy, registration dates or works contracts invite objections, limitation is close, or the buyer has lawyers. The most valuable work happens before filing.

Identify micro and small vendors, pay within the agreed term (never beyond 45 days from acceptance), provide for interest on any delay, file MSME Form I if you are a company with dues beyond 45 days, and make the Section 22 disclosures. See compliance for buyers.

Yes. From 1 April 2026 the Income-tax Act, 2025 carries the same rule in Section 37(2)(g): a sum owed to a micro or small enterprise beyond the Section 15 limit is deductible only in the year it is actually paid.