MSME Samadhan: A Scheme to Resolve Delayed Payment Issues for MSMEs

 

MSME Samadhan: A Scheme to Resolve Delayed Payment Issues for MSMEs

Micro, Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy, contributing to 29% of the GDP and 48% of the exports. However, one of the major challenges faced by MSMEs is the delayed payment from their buyers, which affects their cash flow, working capital and growth prospects.

To address this issue, the Government of India launched MSME Samadhan in 2017, a portal for delayed payment monitoring system for MSMEs. The word samadhaan means solution. The portal aims to provide a mechanism for MSMEs to file their grievances related to delayed payments and seek redressal.

How does MSME Samadhan work?

MSME Samadhan is governed by the Micro and Small Enterprise Facilitation Council (MSEFC), which is established under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The MSEFC has the power to conciliate and arbitrate disputes between MSMEs and their buyers and pass awards for recovery of dues.

MSMEs can register on the portal and file their applications online against their buyers who have defaulted on payments beyond 45 days from the date of acceptance or deemed acceptance of goods or services. The portal also allows MSMEs to track the status of their applications and view the details of pending and disposed cases.

The portal also displays the name and contact details of the buyers who have defaulted on payments, along with the amount due and the date of filing. This serves as a public notice and a deterrent for such buyers.

The portal also facilitates the MSEFCs to monitor and dispose the cases online in a time-bound manner. The MSEFCs are required to examine the applications within 15 days and issue notices to the parties for conciliation or arbitration. The MSEFCs are also required to pass awards within 90 days from the date of reference.

What are the benefits of MSME Samadhan?

• MSME Samadhan provides several benefits for MSMEs, such as:
• It enables MSMEs to file their complaints online without any physical visits or paperwork.
•  It reduces the cost and time involved in resolving disputes through legal channels.
• It ensures timely recovery of dues from buyers and improves the cash flow and working capital of MSMEs.
• It enhances the confidence and credibility of MSMEs in the market.
• It helps MSMEs to access credit facilities from banks and financial institutions.

What are the eligibility criteria for MSME Samadhan?

• To avail the benefits of MSME Samadhan, MSMEs need to fulfill the following criteria:
• They should be registered as an MSME under Udyam Registration Portal or Udyog Aadhaar Memorandum (UAM).
• They should have supplied goods or services to a buyer who is not an MSME.
• They should have not received payment from the buyer within 45 days from the date of acceptance or deemed acceptance of goods or services.
• They should have filed their application within three years from the date when payment became due.

How to register and file an application on MSME Samadhan?

MSMEs can register and file an application on MSME Samadhan by following these steps:

·        Visit https://samadhaan.msme.gov.in/MyMsme/MSEFC/MSEFC_Welcome.aspx

·        Click on “Register here” link under “New Entrepreneur”.

·     Fill in the details such as name, email, mobile number, Udyam Registration Number or UAM Number, PAN Number etc. and create a password.

·        Verify your email and mobile number through OTP.

·        Login with your email and password.

·        Click on “File Application” link under “Entrepreneur Corner”.

·        Fill in the details such as buyer’s name, address, GSTIN, amount due, date of supply etc. and upload relevant documents such as invoices, delivery challans etc.

·        Submit your application and note down your reference number.

·        You can track your application status by clicking on “View Status” link under “Entrepreneur Corner”.

What if the dispute is not resolved at the facilitation council:

Where the parties could not reach solution even with the mediation of facilitation council, the matter is referred to Arbitrator within the meaning of Arbitration and conciliation Act 1996

 Merits and Demerits of the Scheme:

 Merits

·        It enables MSMEs to file their complaints online without any physical visits or paperwork.

·        It reduces the cost and time involved in resolving disputes through legal channels.

·        It ensures timely recovery of dues from buyers and improves the cash flow and working capital of MSMEs.

·        It enhances the confidence and credibility of MSMEs in the market.

·        It provides a deterrent for buyers who default on payments by displaying their name and contact details on the portal.

Demerits

·        It requires MSMEs to have a valid Udyam Registration Number or Udyog Aadhaar Memorandum Number to file an application.

·        It does not cover delayed payments from other MSMEs or government entities.

·        It does not provide any interest on the refunded amount.

·        It does not guarantee the enforcement of the awards passed by the MSEFCs.

·        It does not address the root causes of delayed payments such as poor contract management, lack of transparency, or disputes over quality or quantity.

What are some other schemes for MSMEs?

Apart from MSME Samadhan, there are some other schemes for MSMEs launched by the Government of India, such as:

·      MSME Sambandh: It monitors the procurement of goods and services by Central Public Sector Enterprises (CPSEs) from MSMEs and ensures timely payments.

·  MSME Sampark: It connects MSMEs with potential employers, mentors, incubators and investors through a digital platform.

·     MSME Champions: It provides guidance, grievance redressal and support to MSMEs through a network of control rooms and call centers.

·  MSME Udyam Registration Portal: It simplifies the process of registration of MSMEs and provides them with a unique identification number.

Conclusion

MSME Samadhan is a scheme that aims to resolve the delayed payment issues faced by MSMEs and provide them with a quick and easy mechanism for filing their grievances and seeking redressal. It also helps MSMEs to improve their cash flow, working capital and growth prospects. MSMEs can register and file their applications online on the portal and track their status. MSME Samadhan is one of the many schemes launched by the Government of India to support and promote the MSME sector in the country.

 

 

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