The MSME 45-Day Payment Rule: What It Means and What to Put on Your Invoice

Short answer: under section 15 of the MSMED Act, 2006, a buyer must pay a micro or small supplier by the agreed date, which cannot be more than 45 days from acceptance of the goods or services — or within 15 days if nothing was agreed. Late payment attracts compound interest at three times the bank rate notified by the RBI (section 16), and the supplier can go to the MSME Facilitation Council.

This explains the general rule in the MSMED Act. Confirm how it applies to your contracts with your CA or lawyer.

Who it protects

Micro and small enterprises registered on the Udyam portal, supplying goods or services to a buyer. Medium enterprises are outside the 45-day protection.

How the 45 days are counted

• From the day the buyer accepts the goods or services, or is deemed to have accepted them.
• An agreed credit period longer than 45 days does not extend the limit.
• With no written agreement, payment is due within 15 days.

What to put on your invoice

• Your Udyam registration number and category (micro or small).
• A clear due date within 45 days and the words "Payable within 45 days under the MSMED Act, 2006".
• Bank details or a payment link, so paying is easy.

If the buyer still does not pay

Send a written reminder that cites the due date and interest. If that fails, you can file a case with the MSME Facilitation Council through the MSME Samadhaan portal.

How Grovia helps

Grovia puts a due date on every invoice, can send it with a Pay now link through your own Razorpay, and can email reminders on a schedule once you switch them on. Add your Udyam number and the 45-day line in the invoice notes so it prints on every PDF. Grovia does not calculate MSMED interest or file anything for you.

Grovia is one platform for service businesses — leads, quotations, GST invoicing, accounts, projects, HR and support. Start a free 14-day trial (no card needed).

Frequently Asked Questions

What is the 45-day rule for MSME payments?

A buyer must pay a micro or small supplier within the agreed period, which cannot exceed 45 days from acceptance; without an agreement, within 15 days.

What interest applies on late payment to an MSME?

Compound interest with monthly rests at three times the bank rate notified by the RBI.

Does the 45-day rule apply to medium enterprises?

No. It protects micro and small enterprises.

Where can an MSME complain about delayed payment?

To the MSME Facilitation Council, through the MSME Samadhaan portal.