If a buyer has stopped paying you for goods or services you’ve already delivered, you know how stressful it gets. Your working capital gets stuck, your suppliers start calling, and growing your business takes a back seat. The good news is that the law is fully on your side here. Every registered MSME in India has the legal right to get paid within a fixed time, and if that doesn’t happen, there’s a free government mechanism built just for this.
In this guide, we’ll walk you through exactly how to file complaint in MSME for non payment, step by step.
What Is An MSME Non Payment Complaint?
MSME Non Payment Complaint: A formal grievance filed by a Udyam-registered micro or small enterprise against a buyer who has failed to pay for goods or services within the legal time limit.
This right comes from the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. Under Section 15 of this Act, a buyer must pay a registered supplier within 45 days of accepting goods or services, even if a longer credit period was agreed in writing. If no time is fixed at all, payment is due within 15 days.
Here’s the part most business owners don’t know: you don’t need to go to court for this. You can file complaint in MSME for non payment directly online, free of cost, through a government portal. Your case then goes to the Micro and Small Enterprise Facilitation Council (MSEFC) of your state, which is legally bound to resolve it within 90 days.
One important update for 2026: the old MSME Samadhaan portal no longer accepts new complaints. Since 15 October 2025, all fresh filings must go through the new MSME ODR Portal at odr.msme.gov.in. We’ll cover exactly how this works below.
Where To File Complaint In MSME For Non Payment?
For years, MSMEs used the Samadhaan portal to raise delayed payment cases. That has now changed.
The Ministry of MSME launched the MSME Online Dispute Resolution (ODR) Portal in June 2025, and from 15 October 2025, it is the only place where new delayed payment complaints can be filed. The Samadhaan portal is now used only to track old cases filed before that date — it no longer accepts new ones.
What’s different about the ODR Portal?
- It adds a Pre-MSEFC stage where both sides get a chance to settle the dispute through guided online negotiation or mediation, before the case reaches the council
- If this stage fails, the case automatically moves to the MSEFC for conciliation and, if needed, arbitration
- Everything, including hearings and document uploads, happens digitally
This structure gives you a faster shot at getting paid, often without a long hearing process.
Who Can File Complaint In MSME For Non Payment?
Not every business qualifies. Here’s what you need to check first:
- Your enterprise must be registered as a Micro or Small Enterprise under Udyam Registration. Medium enterprises cannot use this mechanism.
- Your Udyam Registration must have existed before you supplied the goods or services in question. Registering after the fact won’t help — the Supreme Court has confirmed this in past rulings.
- The buyer must have actually purchased goods or received services from you for consideration (payment).
- There is no upper limit on the claim amount — a kirana supplier owed Rs 50,000 and a manufacturer owed Rs 50 lakh can both file.
If your business is only registered as a trader (buying and reselling goods without any manufacturing or value addition), you may face restrictions, since the Act’s protection is meant for manufacturers and service providers.
Documents Required To File Your Complaint
Keep these ready before you start the filing process:
| Document | Why It’s Needed |
| Udyam Registration Certificate | Proves you’re a valid micro/small enterprise |
| Purchase Order or Work Order | Shows the agreement with the buyer |
| Tax Invoices | Proves the supply date, amount, and description |
| Delivery Challan / Proof of Service | Confirms goods or services were delivered/completed |
| Written payment agreement (if any) | Decides whether the 15-day or 45-day rule applies |
| Reminder emails or demand notices sent | Shows you tried to recover payment |
| Bank statement | Confirms non-receipt of payment |
| Interest calculation sheet | Shows the compound interest claimed |
Having all of this ready before you begin makes the online form much quicker to fill.
Step-By-Step: How To File Complaint In MSME For Non Payment?
- Check your eligibility: confirm your Udyam Registration date is before your invoice date.
- Gather your documents: invoices, purchase orders, delivery proof, and communication with the buyer.
- Visit odr.msme.gov.in and create an account using your Udyam Registration number, mobile number, and email ID.
- Let the portal verify your Udyam details automatically against the Udyam Registration database.
- Fill the digital claim form with your enterprise details, buyer details (name, address, GSTIN), invoice number, amount, and due date.
- Enter the interest claimed: the portal helps you calculate this using the compound interest formula under the Act.
- Upload your supporting documents in PDF format and review everything carefully.
- Submit the claim: you’ll receive a unique case reference number to track your complaint.
- Participate in Pre-MSEFC negotiation if the buyer responds, this is a voluntary settlement stage.
- If unresolved, the case moves to the MSEFC for conciliation, and then arbitration if needed, with a 90-day resolution deadline.
Need Help Filing Your MSME Payment Complaint The Right Way?
Udyamita Helpline has helped thousands of Indian entrepreneurs recover delayed payments from buyers.
What Happens After You File Complaint In MSME For Non Payment?
Once your complaint reaches the MSEFC, here’s the process:
Conciliation stage: A conciliator (a council member or an outside expert) tries to get both sides to agree on a settlement. This is faster and less formal than a court hearing.
Arbitration stage: If conciliation fails, the council itself arbitrates the dispute, or refers it to an arbitration institution. This decision is called an award, and it is legally binding — treated the same as a court decree.
Enforcement: If the buyer still doesn’t pay after the award, you can get it enforced through a civil court, just like any other court order. Importantly, if the buyer wants to challenge the award, they must first deposit 75% of the award amount with the court — this protects you from endless delay tactics.
Interest You Are Entitled To On Delayed Payment
This is one of the strongest parts of the law, and most business owners underestimate it.
Under Section 16 of the MSMED Act, a buyer who delays payment beyond the 45-day (or agreed shorter) window owes you compound interest at three times the RBI’s bank rate, compounded monthly. This interest builds up automatically — you don’t need to ask for it separately, and it keeps growing until the buyer actually pays you.
Example: On a pending amount of Rs 10 lakh delayed by 3 months, the compound interest alone can cross Rs 40,000 — often more than what simple interest would give you. Over a year or two, this can add up to a substantial sum, sometimes even exceeding the original unpaid amount.
The buyer also cannot claim this interest as a tax-deductible business expense, which makes delaying your payment genuinely costly for them.
Why Buyers Can’t Afford To Delay Anymore? Section 43B(h)
Since April 2024, Section 43B(h) of the Income Tax Act has added extra pressure on buyers. If a buyer doesn’t pay a registered micro or small enterprise within the 45-day limit, that expense gets disallowed as a tax deduction for that financial year. They only get the deduction in the year they actually pay you.
This has made many larger companies far more careful about clearing MSME dues on time, since delaying now directly hurts their tax position, not just their reputation.
Common Mistakes That Weaken Your Complaint
- Filing without a valid Udyam Registration date: if your registration came after the transaction, your claim may get rejected.
- Trying to file for a medium enterprise: only Micro and Small enterprises are covered under this Act.
- Ignoring the demand notice step : while not compulsory, sending a written payment reminder before filing strengthens your case.
- Using simple interest instead of compound interest in your claim calculation.
- Waiting too long: while there’s no fixed limitation period under the Act, courts generally apply the 3-year limitation rule, so don’t sit on your claim.
- Missing supporting documents: an incomplete PO-to-invoice-to-delivery trail can delay your case.
Key Takeaways
- You can file a complaint in MSME for non payment only if you hold a valid Udyam Registration issued before the transaction.
- All new complaints must be filed on the MSME ODR Portal (odr.msme.gov.in), the old MSME Samadhaan portal no longer accepts fresh cases.
- Filing is completely free, and there’s no upper limit on the claim amount.
- Buyers owe compound interest at 3 times the RBI bank rate for every day of delay.
- The MSEFC must resolve your case within 90 days of filing.
- Buyers face tax disallowance under Section 43B(h) if they delay payment beyond 45 days.
FAQs
Can I Still File My Complaint On The Samadhaan Portal?
No. Since 15 October 2025, Samadhaan only shows the status of old cases. All new complaints must go through the MSME ODR Portal at odr.msme.gov.in.
Can A Medium Enterprise Use This Process?
No. Only Micro and Small enterprises registered under Udyam can use the MSEFC mechanism. Medium enterprises need to pursue recovery through a regular civil suit.
How Long Does It Take To Resolve An MSME Payment Complaint?
The MSEFC is required by law to dispose of your case within 90 days from the date of filing, though actual timelines can vary depending on the case.
Do I Need A Lawyer To File This Complaint?
No, the process is designed to be filed directly by the business owner. However, for complex cases or large claim amounts, professional guidance can help you avoid mistakes.
What If The Buyer Disputes The Quality Of Goods Delivered?
The buyer can raise this defence, but it does not cancel their obligation to pay on time. The council will examine the evidence and may adjust the amount, but interest still applies on whatever is finally due.
Can I file a complaint if I don’t have a written agreement with the buyer?
Yes. If there’s no written agreement, the law assumes a 15-day payment period from the date of acceptance of goods or services, and you can file after that period lapses.
What happens if the buyer ignores the MSEFC notice?
The council can proceed with conciliation and arbitration even if the buyer does not participate, and can pass an award based on the evidence you have submitted.
