MSME Credit days applicability

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The MSMED Act mandates a maximum credit period of 45 days for payments to MSME suppliers. This discussion clarifies whether this rule extends to medium enterprises, especially after the definition revision effective from October 1, 2021. The consensus is that the 45-day credit limit applies to all micro, small, and medium enterprises, including medium-sized businesses under the updated criteria.

Pradyumna U K

Pradyumna U K (Querist)
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06 October 2021 MSMED Act says maximum credit of 45 days. buyer is to make MSME Supplier within appointed day and same shall not exceed 45 days.
does this rule applies to all Micro, small & Medium enterprises or is Medium enterprises is left out of this preview. Is there any notification or Law shedding light specifically on this

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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06 October 2021 To all the units as per revised defination of MSME.
Micro ..... Investment less than Rs. 1 crore and Turnover less than Rs. 5 crore.
Small ...... Investment less than Rs. 10 crore and Turnover less than Rs.50 crore.
Medium.. Investment less than Rs. 20 crore and Turnover less than Rs.100 crore.

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Pradyumna U K

Pradyumna U K (Querist)
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06 October 2021 Revised definition?, you mean sir the one applicable from 1 oct 2021

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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06 October 2021 Correct, as per the recent revision, a medium unit is one with an investment not exceeding Rs 50 crore and a Rs 250-crore turnover.
As per MSME act, the rule will get applied to these units also.

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