Invoice Discounting MSME delayed paymentSamadhaan portalMSME ODR portalMSEFC complaintMSMED Act Section 15delayed payment interestMSME payment rights India

MSME Delayed Payment Complaint: Samadhaan to ODR Portal Filing Guide

Rs 22,363 crore in MSME delayed payments pending on Samadhaan. New ODR portal from October 2025. Step-by-step filing guide with documents needed, MSEFC process, and 3x bank rate penalty math.

By HonestMoney.in Editorial Team | Updated April 25, 2026

Rs 22,363 Crore in MSME Delayed Payments Are Pending on Samadhaan. The New ODR Portal Launched October 2025. Here Is How to File a Complaint, What Documents You Need, and What the 3x RBI Bank Rate Penalty Actually Means in Rupees.

Your buyer owes you money. The invoice was due 45 days ago. You have called, emailed, sent WhatsApp messages. The accounts payable team says “next month.”

You have a legal right to penalty interest at 20.25% per annum — compounded monthly — from the day the payment was due. Most MSMEs never exercise this right because they do not know it exists or fear losing the buyer.

This guide covers the process, the math, and the practical reality.

The Legal Foundation: Sections 15, 16, and 18 of the MSMED Act

Section 15: Payment Timeline

The buyer must pay:

Within the agreed credit period, or
Within 45 days of acceptance of goods/services
Whichever is earlier

If no credit period is agreed in writing, payment must be made within 15 days.

The 45-day cap is absolute. Even if your contract says “90-day credit terms,” the MSMED Act overrides it to 45 days. However, enforcement of this override depends on MSEFC interpretation — some councils have allowed contractually agreed periods up to 45 days.

Section 16: Penalty Interest

Compound interest at 3x the RBI bank rate from the due date until actual payment.

RBI Bank Rate (Current)	Penalty Interest Rate	Compounding
6.75%	20.25% PA	Monthly

Section 18: MSEFC Jurisdiction

Any MSME can file a reference to the Micro and Small Enterprise Facilitation Council (MSEFC) of the state where the supplier is located or where the buyer is located.

The Penalty Interest Math

Example 1: Rs 10 Lakh Delayed by 90 Days

Component	Calculation	Amount
Principal	—	Rs 10,00,000
Monthly rate	20.25% / 12	1.6875%
Month 1 interest	Rs 10,00,000 x 1.6875%	Rs 16,875
Month 2 interest (compounded)	Rs 10,16,875 x 1.6875%	Rs 17,160
Month 3 interest (compounded)	Rs 10,34,035 x 1.6875%	Rs 17,449
Total interest for 90 days	—	Rs 51,484

Your buyer owes you Rs 10,51,484 — not Rs 10,00,000.

Example 2: Rs 25 Lakh Delayed by 180 Days

Component	Amount
Principal	Rs 25,00,000
Compound interest at 20.25% for 180 days	Rs 2,64,800
Total due	Rs 27,64,800

Example 3: Rs 5 Lakh Delayed by 365 Days

Component	Amount
Principal	Rs 5,00,000
Compound interest at 20.25% for 1 year	Rs 1,11,300
Total due	Rs 6,11,300

These amounts are legally enforceable. The buyer cannot negotiate them away — Section 16 makes the interest mandatory, not discretionary.

How to File a Complaint: Step-by-Step

Before You File: Checklist

Requirement	Details
Udyam Registration	Must be valid at the time of the transaction
Invoice exceeds 45 days past due	Or past the agreed credit period, whichever is earlier
Buyer identified	Company name, GSTIN, registered address
Supporting documents ready	See document list below
Attempted informal resolution	Not required legally, but MSEFC will ask if you tried

Step 1: Gather Documents

Essential (without these, the complaint is weak):

Udyam Registration Certificate
Purchase order / work order from the buyer
Tax invoice with date, amount, GST, and payment terms
Delivery challan or service completion certificate
Goods receipt note / buyer acceptance (if available)
Bank statement showing non-receipt or partial receipt
GST return (GSTR-1) showing the invoice was filed

Strengthening (not required but improves your case):

Email trail about payment reminders
WhatsApp messages acknowledging the delay
Any written promise to pay by a specific date
TReDS records (if invoice was uploaded but buyer did not accept)
Previous payment history showing habitual delays

Step 2: Register on the ODR Portal

The new ODR (Online Dispute Resolution) Portal replaced Samadhaan for new filings from October 15, 2025.

Visit the MSME ODR Portal
Register using your Udyam Registration number
Verify via OTP to your registered mobile number
Complete your business profile

Step 3: File the Reference

Click “File New Reference”
Enter buyer details — company name, GSTIN, registered office address, contact person
Enter invoice details — invoice number, date, amount, GST amount, payment terms, due date
Enter payment status — amount received (if any), date of last payment, outstanding amount
Calculate and enter the Section 16 interest claim
Upload all documents (PDF format, under 5 MB each)
Select the MSEFC — your state or the buyer’s state
Pay the filing fee

Step 4: Filing Fee

Claim Amount	Typical Fee Range
Up to Rs 1 lakh	Rs 500
Rs 1 lakh to Rs 10 lakh	Rs 1,000-2,000
Rs 10 lakh to Rs 1 crore	Rs 2,000-5,000
Above Rs 1 crore	Rs 5,000-10,000

Fees vary by state. Some states offer fee waivers for micro enterprises.

Step 5: MSEFC Process

Stage	Timeline (Statutory)	Timeline (Actual)
Notice to buyer	Within 15 days of filing	15-30 days
Buyer’s reply	15 days from notice	15-45 days
Conciliation attempt	Within 30 days	30-90 days
Arbitration (if conciliation fails)	Within 90 days of original filing	3-12 months
Award	Within 90 days of original filing	3-12 months
Appeal window	90 days from award (High Court)	—

Total realistic timeline: 6-12 months for an award. Plus execution time if the buyer does not comply voluntarily.

What Happens After the Award

If the Buyer Pays

The matter is closed. You receive the principal plus Section 16 compound interest from the due date until the date of payment.

If the Buyer Does Not Pay

The MSEFC award is treated as a decree of a civil court. You must:

File an execution petition in the district court where the buyer is located
The court can attach the buyer’s bank accounts, property, or other assets
Execution can take 6-24 months depending on court workload and buyer’s cooperation

If the Buyer Appeals

The buyer can challenge the MSEFC award under Section 34 of the Arbitration and Conciliation Act within 90 days. However, the buyer must deposit 75% of the awarded amount with the MSEFC before the appeal is entertained. This deposit requirement deters frivolous appeals.

The Geographic Reality: Where Complaints Are Highest

State	Pending Dues	Key Industries
Maharashtra	Rs 3,100 crore	Auto components, textiles, engineering
Delhi	Rs 2,900 crore	Trading, services, IT
Uttar Pradesh	Rs 2,400 crore	Textiles, food processing, handicrafts
Gujarat	Rs 1,200+ crore	Chemicals, textiles, diamonds
Haryana	Rs 1,100+ crore	Auto components, garments
West Bengal	Rs 1,000+ crore	Jute, leather, engineering

Over 150 MSEFCs are constituted across India, but many operate with minimal staffing and infrastructure. Urban MSEFCs (Mumbai, Delhi, Bengaluru) process cases faster than rural ones.

When Filing Makes Strategic Sense (and When It Does Not)

File When:

The amount is significant — Rs 5 lakh+ justifies the time and effort
You have clear documentation — PO, invoice, delivery proof, and non-payment evidence
The buyer is a repeat offender — establishing a legal record deters future delays
You are diversifying away from this buyer — you can afford the relationship risk
The buyer has assets — there is something to recover if the court execution is needed

Think Twice When:

This is your only major buyer — losing the relationship could be existential
The amount is under Rs 1 lakh — the time cost may exceed the recovery
You lack documentation — verbal orders and informal arrangements are hard to prove
The buyer is in financial distress — even an award may be unrecoverable
You can negotiate a payment plan — direct negotiation with a written commitment may be faster

The Middle Path

File the complaint but signal willingness to settle during conciliation. The formal notice from MSEFC creates urgency — many buyers pay during the conciliation stage to avoid an adverse award on record. You get your money without a full adversarial process.

The Connection to Invoice Discounting

Invoice discounting and delayed payment complaints are two sides of the same problem — MSMEs waiting 90-120 days for money they earned.

Solution	Cost	Speed	Relationship Impact	Legal Standing
Wait for payment	0% (but opportunity cost)	90-120 days	None	No interest claim if within 45 days
TReDS invoice discounting	7-11% PA	2-7 days	None (buyer cooperates)	N/A
Private platform discounting	15-22% PA	24-72 hours	None	N/A
MSEFC complaint	0% + filing fee	6-12 months	High risk	20.25% PA penalty interest

The optimal sequence:

Use TReDS for invoices where the buyer cooperates — cheapest financing, no conflict
For buyers not on TReDS, compare bank OD vs private platform costs
For habitual late payers, file on the ODR portal — the threat of MSEFC proceedings often accelerates payment faster than actual proceedings
Use the off-balance-sheet advantage of TReDS to preserve borrowing capacity while managing working capital gaps

HonestMoney.in Editorial Team

Research-backed content sourced from official publications, regulatory filings, verified data, and real-world experiences. Updated April 2026.

FAQ 10

Frequently Asked Questions

Research-backed answers from verified data and published sources.

What is the 45-day payment rule for MSMEs under MSMED Act?

Section 15 of the MSMED Act 2006 mandates that buyers must pay MSMEs within the agreed credit period or within 45 days of acceptance of goods or services, whichever is earlier. If no credit period is agreed, payment must be made within 15 days. This applies to all buyers — private companies, government departments, PSUs, and individuals — who purchase goods or services from enterprises registered as MSMEs under Udyam Registration.

What interest can MSMEs charge on delayed payments?

Section 16 of the MSMED Act mandates compound interest at 3 times the RBI bank rate on the delayed amount from the due date until actual payment. As of April 2026, the RBI bank rate is 6.75 percent, making the penalty interest rate 20.25 percent per annum, compounded monthly. On a Rs 10 lakh payment delayed by 90 days beyond the due date, the interest amounts to approximately Rs 51,700. This interest is mandatory by law — the buyer cannot negotiate it away.

What is the MSME Samadhaan portal and has it been replaced?

MSME Samadhaan was the online portal for MSMEs to file delayed payment complaints against buyers. It was operational from 2017. As of October 15, 2025, new filings are routed through the ODR (Online Dispute Resolution) Portal. Existing cases filed on Samadhaan continue on that platform. The ODR portal provides video conferencing for hearings, digital document submission, and online status tracking. Over 2.18 lakh applications have been filed with total pending dues of Rs 22,363 crore across both platforms.

How do I file a delayed payment complaint on the ODR portal?

Step 1: Visit the MSME ODR Portal and register with your Udyam Registration number. Step 2: Fill in complaint details — buyer name, GSTIN, invoice details, amount due, due date, and actual payment date (if partially paid). Step 3: Upload supporting documents — purchase order, invoice copy, delivery challan, goods receipt note, and any communication about payment. Step 4: Select your state MSME Facilitation Council (MSEFC). Step 5: Pay the filing fee (typically Rs 500-2,000 depending on claim amount). Step 6: The MSEFC issues notice to the buyer within 15 days.

What documents do I need to file a delayed payment complaint?

Essential documents: (1) Udyam Registration Certificate — proving MSME status at the time of supply. (2) Purchase order or work order from the buyer. (3) Invoice copy with date, amount, and payment terms. (4) Delivery challan or proof of delivery/service completion. (5) Buyer's goods receipt note or acceptance confirmation. (6) Bank statement showing partial or non-receipt of payment. (7) Any written communication (email, letter) about payment delays. (8) GST return showing the invoice in your GSTR-1 filing. Optional but helpful: TReDS transaction records if the buyer accepted and then defaulted.

How long does the MSEFC process take?

The MSMED Act mandates disposal within 90 days from the date of reference. In practice, it takes 3-12 months depending on the state. Maharashtra and Delhi MSEFCs handle the highest volume and may take longer. The process: (1) Notice to buyer within 15 days. (2) Buyer submits reply within 15 days. (3) Conciliation attempt. (4) If conciliation fails, arbitration proceedings. (5) Award passed. The 90-day statutory deadline is rarely met. Appeals against MSEFC awards go to the High Court under Section 34 of the Arbitration Act.

Can I file a complaint if I don't have Udyam Registration?

No. MSME status under the MSMED Act requires a valid Udyam Registration. If you did not have registration at the time of the transaction, the MSEFC may not accept your complaint. Critical: get Udyam Registration before entering into contracts with large buyers. Registration is free at udyamregistration.gov.in and takes 10-15 minutes with Aadhaar and PAN. Without registration, you have no access to MSMED Act protections including the 45-day payment mandate, penalty interest, and MSEFC dispute resolution.

What happens after the MSEFC passes an award in my favor?

The award is treated as a decree of a civil court. If the buyer pays voluntarily, the matter is closed. If the buyer does not pay, you must file an execution petition in the district court to enforce the award. This is where the process breaks down — court execution can take months to years. The buyer can also challenge the award under Section 34 of the Arbitration Act within 90 days, which further delays enforcement. In practice, the threat of an MSEFC award is often more effective than the award itself — many buyers settle during or shortly after proceedings to avoid the formal record.

Does filing a complaint affect my relationship with the buyer?

This is the biggest concern for MSMEs and the primary reason most delayed payment cases are never filed. Filing creates a formal adversarial record. Many MSMEs fear losing future orders. However: (1) The complaint is between business entities, not personal. (2) Large corporates with Rs 250 crore+ turnover deal with vendor complaints regularly. (3) The MSEFC first attempts conciliation — not adversarial litigation. (4) Not filing means accepting delayed payment as permanent practice. (5) The MSMED Act exists precisely to address this power imbalance. MSMEs supplying to multiple buyers can start by filing against one — establishing a precedent without risking all relationships.

Can I claim delayed payment interest if I used invoice discounting?

If you discounted the invoice on TReDS and the buyer paid the financier on time, you received your money early — no delayed payment claim exists. If you discounted on TReDS but the buyer defaulted on the financier, the financier pursues the buyer (non-recourse), and the penalty interest claim belongs to the financier. If you did not use invoice discounting and the buyer paid you late, you can claim the full Section 16 interest from the due date. If you used a private platform with recourse and had to repay the platform because the buyer delayed, you may have a claim against the buyer for both the original amount and the interest — but this is legally complex and needs legal advice.

Disclaimer: This information is for educational purposes only and does not constitute financial or investment advice. Invoice discounting carries real default and liquidity risk. Past platform performance does not guarantee future results. Consult a qualified financial advisor before investing. Always verify platform claims independently.