Your rights as an MSME supplier
| Right | What it means for you |
|---|---|
| Section 15, MSMED Act | The buyer must pay by the agreed date, never later than 45 days from acceptance; with no written agreement, within 15 days |
| Section 16 | Compound interest with monthly rests at three times the RBI bank rate on the delayed amount |
| Section 18 | Reference to the Tamil Nadu Micro and Small Enterprises Facilitation Council: conciliation, then arbitration, aiming to decide within 90 days |
| Section 43B(h), Income-tax Act | The buyer loses the tax deduction for the year if it pays you late |
| Section 22, MSMED Act | Companies must disclose unpaid MSME dues in their accounts |
Register on Udyam before you supply, not after the dispute. Courts have held that the benefits apply to supplies made after registration. Traders are generally outside the delayed-payment provisions.
Recovering B2B dues in Tiruppur: what is specific here
Tiruppur is India’s knitwear capital, with thousands of job-workers, dyers and garment units billing exporters and domestic brands. Domestic dues between units are mostly micro and small enterprises on both sides, so the MSME Act’s 45-day rule and Samadhaan apply; overseas buyer dues need a different approach.
Main industries: knitwear and garment exports, dyeing and processing, textile machinery, packaging and logistics.
Courts: Judicial Magistrate courts, Tiruppur, for Section 138; District Court, Tiruppur, and its Commercial Court for recovery suits.
MSME claims: Udyam-registered micro and small suppliers in Tiruppur file on MSME Samadhaan, heard by the Tamil Nadu Micro and Small Enterprises Facilitation Council (Commissionerate of Industries and Commerce (MSME Department), Government of Tamil Nadu, Chennai). The Council sits where the supplier is, so a Tiruppur supplier can pursue a buyer in another state from home.
How FundRaksha files MSME Samadhaan for you
- We check your Udyam status, the supply dates and the acceptance to confirm eligibility.
- Your advocate sends a legal notice citing Sections 15 and 16, with the interest computed to date.
- If the buyer does not settle, we file the application on samadhaan.msme.gov.in with the invoices, proof of delivery and the ledger.
- The Tamil Nadu Micro and Small Enterprises Facilitation Council calls both sides for conciliation; if that fails, it arbitrates and passes an award.
- The award is enforced like a decree; a buyer who appeals must deposit 75% of the amount first.