Customer Has Not Paid in 45 Days? How a Micro or Small Business Can Recover Through the MSME ODR Portal
A micro or small enterprise registered on Udyam can demand payment within 45 days and compound interest at three times the RBI bank rate on delays. Since 15 October 2025, new delayed-payment cases are filed on the MSME ODR portal. Traders and medium enterprises are not covered.
Small suppliers often accept late payment because they fear losing the customer. The law gives micro and small enterprises real leverage, and filing a case is now done online.
Your rights
If you are a micro or small enterprise registered on Udyam and you supply goods or services:
- ✓the buyer must pay within the agreed period, which cannot exceed 45 days from acceptance (15 days if there is no written agreement);
- ✓on late payment, the buyer owes compound interest, with monthly rests, at three times the bank rate notified by the RBI;
- ✓the buyer cannot deduct that interest for income tax, and if the buyer pays you late, it loses the tax deduction for the purchase in that year.
Not covered: medium enterprises, and traders registered on Udyam only for priority-sector lending.
Where to file
Since 15 October 2025, new delayed-payment cases are filed on the MSME ODR portal (odr.msme.gov.in). The older Samadhaan portal no longer takes new filings. The case goes to the Micro and Small Enterprises Facilitation Council (MSEFC) of your state, which tries conciliation first and can then decide the matter as an arbitrator.
What to prepare
- Udyam registration certificate, showing you were micro or small when the supplies were made.
- Purchase orders or contracts, showing the credit period.
- Invoices and proof of delivery or acceptance.
- Statement of account with the buyer.
- Reminders and emails about payment.
- Interest calculation at three times the bank rate.
A worked example
A Rajkot micro manufacturer supplied ₹18 lakh of castings to a large Pune buyer on 45-day terms. After 150 days the buyer had paid nothing. The manufacturer sent a reminder citing the MSMED Act and the buyer's tax disallowance, then filed on the ODR portal. At conciliation, the buyer paid the principal and agreed interest within a month.
Before you file
- ✓Send a written demand first, quoting your Udyam number and the 45-day rule.
- ✓Mention that the buyer must disclose overdue MSME payments in its own filings.
- ✓Put your Udyam status and payment terms on every invoice from now on.
Frequently asked questions
Can a trader file?
Generally no. Trading-only Udyam registrations are excluded from the delayed-payment remedies.
Is there a fee?
Check the portal. The process is designed to be low cost for small businesses.
Do I lose the customer?
Sometimes. Many buyers, though, pay once they see a formal claim, because the interest and tax cost of delay is high.
Sources
- ✓MSME Samadhaan: how to file a delayed payment complaint, IIFL
- ✓How to file an MSME delayed payment complaint on the ODR portal, Sansa Legal
- ✓Liability of buyers under Section 15 of the MSMED Act, Taxmann
This is a summary, not legal advice. Take advice before filing a claim.
Written by
Founder, Airwix Technologies (Sleet)
Vatsal Sutariya is the founder of Airwix Technologies in Ahmedabad, the company that builds Sleet: SleetHR for HR and payroll, and Sleet Accounting for GST billing and books. He writes about GST, invoicing, business tax and choosing software for Indian businesses, and checks each rule against the official notification before it is published.
LinkedIn profile →