MSME Amount Pending for Settlement crosses Rs.20,000 Crore
The Amount involved in outstanding applications and cases filed by Micro and Small Enterprises (MSEs) due to payment delays from their customers has surpassed Rs.20,000 crore.
According to data from the MSME Ministry’s delayed payment monitoring portal Samadhaan, Rs.20,413 crore has been blocked in 82,215 pending delayed payment petitions and cases filed by MSEs across various facilitation councils throughout the country since its introduction in October 2017.
So far, the platform has received 1.80 lakh applications totalling Rs.41,804 crore, with only 34,991 cases worth Rs.6,112 crore disposed. An application assessed by the council is converted into a case, which goes through several phases of hearing.
So far, 46,438 applications totalling Rs.9,218 crore were rejected.
The amount pending in applications and cases so far included Rs 3,094 crore against various state governments, Rs. 2,201 crore against various central public sector enterprises, Rs. 1,679 crore against multiple state public sector enterprises, Rs. 1,964 crore against proprietorship entities, and others.
Importantly, clause h of Section 43B of the Income Tax Act, which will take effect on April 1, 2024, aims to address the issue of delayed payments by prohibiting expenses to buyers on invoices from MSEs unless paid within 45 days (where an agreement exists) or 15 days if no agreement exists.
Previously, in January 2019, the government created the half-yearly MSME return form, or MSME-1 form, for buyers who have not paid within 45 days, stating the cause for the delay and the amount due. Failure to file the form results in a Rs.20,000 penalty for the organisation and everyone engaged in the default. Subsequent failures cost Rs.1,000 each day, up to Rs.3 lakh.
In addition to making a complaint electronically on the Samadhaan portal, an Udyam-registered MSE can make a complaint physically at the MSEFC in the corresponding city or state for a delay in payment received from its buyer after the agreed-upon payment date.
Every application filed with the council becomes visible to the council when it is verified within 15 days of filing and converted into a case for recovery or rejection.
Join StudyCafe Membership. For More details about Membership Click Join Membership Button
In case of any Doubt regarding Membership you can mail us at [email protected]
