MSME delayed payment interest

If you are a micro or small manufacturer or service provider, registered on Udyam before the buyer placed the order, a buyer who pays late owes you compound interest with monthly rests at three times the bank rate notified by the RBI (section 16 of the MSMED Act 2006). Each month uses the bank rate in force when it begins. Today's bank rate is 5.75%, which makes 17.25% a year; the calculator applies the rate for each month from the RBI's policy statements, which we hold from February 2023.

The start date depends on what you agreed. With no payment date in writing, the buyer has to pay within 15 days of accepting the goods or services, and interest starts the day after. Goods accepted on 1 June 2026 start earning interest on 17 June 2026. With a date in writing, interest starts the day after that date. An agreed period can never pass 45 days from acceptance, so if you agreed 90 days, the 45th day counts as the due date.

The rule covers micro and small suppliers only. A medium business or a supplier without a registration gets no figure from it. The Ministry of MSME leaves retail and wholesale traders out of it by office memorandum, and the Supreme Court has held that a registration made after delivery works only for supplies made after it.

Enter the unpaid amount, the date the buyer accepted the goods or services, any payment date agreed in writing, your Udyam category, when you registered and whether your activity is trade. The calculator returns the date interest started, the interest owed today and the total with the unpaid amount.