MSME 45-day Ready Reckoner

This is the reference card we wish existed when we started building Vasuli. Keep it open on the second monitor, screenshot it for your accounts manager, or laminate it.

The four numbers you need

What	Number
Maximum legal payment window	45 days from acceptance (Section 15)
Interest rate on overdue MSME invoices	3× bank rate, compounded monthly (Section 16)
Effective annual rate (as of April 2026)	20.25% (bank rate 6.75% × 3)
Samadhaan statutory resolution window	90 days from complaint reference

The escalation ladder

Copy-paste this into your accounts SOP. Adjust the wording to match your voice.

Day 1–14 post-invoice (warm)

Friendly reminder via WhatsApp / email. Reference the invoice, reference the due date. No urgency yet.

"Hi [name], just checking on invoice #1234 for ₹5 lakh dated [date], due on [due date]. Please let us know the expected payment date when you get a moment. Thanks!"

Day 15–30 (firm)

Tone shifts from "checking" to "confirming". Ask for a specific date.

"Hi [name], invoice #1234 is now [X] days past due date. Could you please confirm the exact payment date this week? If there's an issue holding it up, happy to help resolve."

Day 31–44 (pre-legal)

Mention the 45-day trigger. Do not threaten. State the fact.

"Hi [name], invoice #1234 is now [X] days past due. Under MSME Act Section 15, once this hits 45 days overdue, Vasuli auto-flags it for formal notice. I'd rather resolve it before then — please share a payment date by [date]."

Day 45 (the MSME Act moment)

Formal demand notice. Cite the sections. Show the interest math. 7-day window before next step.

(Full demand letter — see blog post The MSME 45-day rule, explained simply for a template.)

Day 52+ (Samadhaan)

File on msefb.msme.gov.in. Free to file. Enforceable as a civil court decree.

How to calculate Section 16 interest (the right way)

MSME Act interest is compound, monthly. Not simple. Not daily. Monthly compounding.

The formula:

Interest for month N = (Previous balance) × (annual_rate / 12)
New balance = Previous balance + Interest

Where annual_rate = 3 × bank_rate (as notified by RBI).

Example

₹5,00,000 invoice, 90 days overdue, bank rate 6.75%:

Month	Opening	Interest (@ 1.6875%/mo)	Closing
1	₹5,00,000	₹8,437.50	₹5,08,437.50
2	₹5,08,437.50	₹8,579.88	₹5,17,017.38
3	₹5,17,017.38	₹8,724.67	₹5,25,742.05

Total owed: ₹5,25,742 (invoice ₹5,00,000 + interest ₹25,742)

Share this calculation with the buyer in writing. It changes the conversation from "when will you pay" to "every month of delay costs you roughly ₹8,500 more."

What qualifies you

Only one thing: Udyam Registration. Free, online, takes 15 minutes at udyamregistration.gov.in.

Aadhaar + PAN. That's it. No fees.

What the Act does NOT cover

Be honest with yourself about what this tool does and doesn't fix:

• Quality disputes: If the buyer is genuinely claiming defective goods, MSME Act timelines reset until the dispute is resolved. This is why crystal-clear acceptance documentation matters.
• Counter-claims: If the buyer has a legitimate counter-claim (damages, delays on your side), that gets decided in the same proceeding.
• Fundamentally disputed invoices: If the buyer never accepted the goods, there's no payment obligation to enforce.

Use the Act when your invoice is genuinely valid and the buyer is just slow-paying. That's 90% of MSME receivables.

The ten-word version

Register as MSME. Escalate in four tiers. Cite Sections 15+16. Invoice interest.

---

This reckoner is informational, not legal advice. For complex disputes — especially where the buyer is disputing quality or counter-claiming — consult a CA or advocate. Vasuli automates the workflow side of this; we are not a law firm.