Out of over 2.12 lakh complaint applications involving Rs 47,147 crore submitted since October 2017 by micro and small enterprises (MSEs) against delay in payments from their buyers, only 20 per cent of applications have been disposed so far, according to the data available on the government’s delayed payment monitoring portal MSME Samadhaan. As of Tuesday, 42,791 applications involving Rs 7,053 crore were disposed by MSE Facilitation Councils (MSEFCs) across the country.
According to the data on the Samadhaan portal, launched in October 2017, 19,787 applications involving Rs 2,515 crore were mutually settled between MSE sellers and their buyers while 59,318 applications amounting to Rs 11,577 crore were rejected by MSEFCs. On the other hand, 40,354 applications involving Rs 13,064 crore were currently under consideration as cases by MSEFCs.
Out of the total applications filed, 53,755 applications were against proprietorship units that delayed payments to MSEs while 17,084 applications were against other MSME units. 11,922 applications were against state governments, 7,059 applications against central public sector units, 2,838 applications against central departments, 3,740 applications against state PSUs, 1,457 applications against central ministries, and others.
In July this year, the government had revised the MSME form 1 to be filled by buyers for additional information on delayed payments to micro and small enterprises such as the amount paid within 45 days through the invoice discounting platform TReDS or other payment mode, amount paid after 45 days, amount outstanding for 45 days or less and amount outstanding for over 45 days other than the reason for the delay in payment or outstanding amount and name and PAN of the MSE supplier.
The buyers are required to file the form by October 31 for the April to September period and again by April 30 for the period October to March every year.
To address the challenge of delayed payments, the government in April this year had introduced clause (h) under Section 43B of the Income Tax Act to allow expenses to buyers on invoices from MSEs only if paid within 45 days (where agreement exists) and within 15 days if there is no agreement in the year of actual payment instead of the year when it was incurred as an expense.