Overview
Section 16 interest applies
automatically at 3x bank rate.
The Micro, Small and Medium Enterprises Development Act mandates that buyers must pay MSME suppliers within 45 days of acceptance of goods or services. Delayed payments automatically attract compound interest at three times the RBI bank rate under Section 16. Buyers who delay payment must also include overdue amounts in their half-yearly MCA disclosures.
For MSMEs themselves, maintaining a valid and accurate Udyam registration is essential to preserve entitlement to MSME-specific benefits including priority sector lending rates, lower EMD for government tenders, and protection under the MSMED Act.
Why This Matters
MSME Samadhaan is an online facilitation portal where MSME suppliers can file applications against delayed buyers. MCA now requires companies to file MSME-related disclosures in their annual accounts. Non-compliance by buyers creates both financial liability and director exposure.
What We Audit
🏭
Udyam Registration Review
Current Udyam certificate verified for accuracy of investment and turnover criteria. Upgrade/downgrade triggers assessed.
📅
Payment Timeline Audit
All outstanding payables to MSME suppliers reviewed for 45-day compliance.
💰
Section 16 Interest Calculation
Compound interest accrued on delayed MSME payments calculated at applicable bank rate.
📋
MCA Disclosure Compliance
Half-yearly disclosure of outstanding MSME payments in financial statements reviewed.
🔍
Vendor Classification Check
Key vendors checked for Udyam registration status to identify undisclosed MSME exposure.
📄
Samadhaan Exposure Assessment
Pending Samadhaan applications against the company, if any, reviewed for settlement strategy.
What You Receive
Udyam Compliance Report - Registration accuracy, renewal status, and benefit eligibility assessment.
MSME Payable Ageing - All payables to MSME suppliers aged with 45-day threshold and interest accrual.
Section 16 Interest Calculation - Exact compound interest exposure per vendor per invoice.
MCA Disclosure Review - Half-yearly disclosure accuracy assessment with correction guidance.
Vendor MSME Status Map - Key vendors classified by Udyam registration status.
30-Day Support - Advisory on Samadhaan responses and settlement at no additional charge.