09 July 2024
The interest rate applicable for delayed payments to MSME suppliers is governed by the MSME (Micro, Small and Medium Enterprises) Development Act, 2006. Here are the key details:
1. **Interest Rate:** The interest rate for delayed payments to MSME suppliers is generally higher than the prevailing bank rate. As per the latest amendments, the interest rate is typically 3 times the bank rate notified by RBI.
2. **Calculation Date:** Interest on delayed payments is calculated from the date immediately following the date agreed upon or specified in contracts, but not exceeding 45 days from the day of acceptance of goods or services.
3. **Specifics:** - If the payment is not made within 45 days, the buyer is liable to pay interest at the specified rate. - The interest calculation starts from the day after the agreed-upon payment date or 45 days from the acceptance of goods/services, whichever is earlier.
4. **Legal Requirement:** It's important to adhere to the terms and conditions agreed upon between the buyer and the MSME supplier to avoid any legal implications. Non-payment or delayed payment can lead to penalties under the MSME Act.
For exact calculations and to understand the current applicable interest rate, it's recommended to refer to the latest notifications and updates from the Ministry of MSME or seek professional advice from a legal or financial expert.
CAclubindia
