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MSME Outstanding Rules & Its impact

The MSME (Micro, Small, and Medium Enterprises) Act in India is aimed at promoting the growth and development of micro, small, and medium enterprises. One of the key provisions of the MSME Act is the requirement for buyers to make payments to MSME suppliers within a stipulated period.

As per the MSME Act, buyers are required to make payments to MSME suppliers within 45 days from the date of acceptance of goods or services. Failure to do so can result in consequences for the buyer, including liability to pay compound interest on the outstanding amount owed to the supplier.

This provision is crucial for ensuring the cash flow of MSMEs, as delayed payments can significantly impact their operations and financial stability. It aims to address the issue of delayed payments, which is a common challenge faced by MSMEs in India.

It's important to note that while the MSME Act mandates payments to MSME suppliers within 45 days, there may be variations or specific circumstances that could affect this timeline. It's advisable for both buyers and MSME suppliers to familiarize themselves with the provisions of the MSME Act and ensure compliance with its requirements.


Currently this rule is benefitted to Micro and Small MSME with having registration type as manufacturer or Service Provider. Currently Micro MSME and traders type registered MSME are not cover under this rule.

#welfareinfotech has developed a tally customization which help the tally users to manage the outstanding of MSME very efficiently. refer below video link to know more.


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