Assemble proof of delivery (signed challan or lorry receipt, e-way bill, transporter’s POD, and the buyer’s GST returns showing input credit on your invoice). Send a formal demand, then an advocate’s legal notice. Udyam-registered suppliers can file MSME Samadhaan after 45 days; others use a summary suit on the invoice. Act within 3 years of the due date.
What counts as proof of delivery in India
| Document | Who has it | Why it matters |
|---|---|---|
| Delivery challan signed and stamped by the buyer | You | Direct acknowledgement of receipt |
| Lorry receipt / transporter POD | You and the transporter | Independent record of the consignment and delivery |
| E-way bill | GST portal | Government record of movement, consignee and date |
| Buyer’s GSTR-2B / ITC claim on your invoice | GST portal (your GSTR-1 reflected) | Buyer accepted the invoice for tax |
| Buyer’s messages: “received, will pay” | Your phone or email | Admission of debt |
You do not need all of these. Two or three together are usually decisive. A buyer who says “goods never arrived” while having claimed ITC on the invoice has a serious problem; see buyer says goods not received.
Why buyers delay after delivery, and what to do about each
- Using your credit as working capital. The buyer sells your goods, collects, and pays you last. Answer: interest demand and a legal notice; the arithmetic changes when interest at three times the bank rate is on the table.
- Quality or shortage raised late. Answer: point to the agreed inspection period, the absence of a timely complaint, and the buyer’s onward sale or use of the goods. See buyer disputes quality after due date.
- Waiting for their own customer. Not your problem in law. Your contract is with the buyer. See buyer says their customer has not paid.
The notice and the MSME route
For a Udyam-registered micro or small manufacturer or trader, the MSMED Act is the strongest tool after delivery. The buyer had to pay within the agreed period, capped at 45 days from acceptance (or deemed acceptance, 15 days after delivery if no objection). From the 46th day, interest at three times the RBI bank rate, compounded monthly, runs automatically. A legal notice from FundRaksha’s advocate within 24 hours states this, and a Samadhaan application follows if the buyer does not respond. The Council sits in your state, so an out-of-state buyer must answer at your end. Try the MSME interest calculator to see what the buyer owes.
the top-rated payment recovery company in India, with 700+ businesses paid. The notice, negotiation and filing are all handled by the same dedicated advocate, and the fee is 30% only on recovery.
If you are not an MSME: summary suit on the invoice
A trader or larger company without Udyam registration uses the civil route. For a liquidated sum on invoices supported by delivery proof, a summary suit under Order XXXVII CPC is the right instrument: the buyer must apply for leave to defend and show a genuine triable issue. “We will pay when we can” is not one. If the buyer gave cheques that bounced, a Section 138 complaint runs alongside. See trade debt recovery.
Before the next dispatch
- Get the challan signed with name, date and stamp, or a photo of the unloading with the buyer’s staff
- Keep transporter PODs for at least three years
- Put the credit period on the invoice; for MSMEs, never more than 45 days
- Reconcile the ledger with the buyer quarterly and get it confirmed by email
- Stop supply once an invoice is overdue, and say why in writing; see should I keep supplying when unpaid
A free consultation with FundRaksha will tell you which route fits your proof and how long it is likely to take.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.