Chapter V - Delayed Payments to Micro and Small Enterprises
Section 15
Section 15: liability of buyer to make payment
A buyer of goods or services from a supplier covered by the Act must pay by the date agreed in writing or, if there is no such agreement, before the appointed day. A written payment period can never exceed 45 days from acceptance or deemed acceptance.
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Need advice on Section 15?
This article is for general information. Refer to the Micro, Small and Medium Enterprises Development Act, 2006 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Where any supplier supplies any goods or renders any services to any buyer, the buyer shall make payment therefor on or before the date agreed upon between him and the supplier in writing or, where there is no agreement in this behalf, before the appointed day:
Provided that in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days from the day of acceptance or the day of deemed acceptance.
Introduction
Section 15 is the starting point of the Act's delayed-payment chapter. 'Supplier' has a narrow meaning: under section 2(n) it is a micro or small enterprise that has filed a memorandum with the authority under section 8(1), plus certain named bodies. So check the supplier's status, the acceptance date and any written payment term before working out a deadline.
Key takeaways
Written terms are capped at 45 days
A payment period agreed in writing cannot be longer than 45 days from the day of acceptance or deemed acceptance.
No written term: pay before the appointed day
Section 2(b) defines the appointed day as the day after 15 days from acceptance or deemed acceptance.
Acceptance, not invoice date
Acceptance is the day of delivery or of rendering the service, or, if the buyer objects in writing within 15 days, the day the supplier removes the objection.
Confirm the supplier and the transaction
Check that the seller is a 'supplier' under section 2(n): a micro or small enterprise that has filed the required memorandum, or one of the bodies the clause names. Medium enterprises are not suppliers for this chapter. Keep the registration evidence and proof that goods were supplied or services rendered.
Work out acceptance or deemed acceptance
Under the Explanation to section 2(b), the day of acceptance is the day goods are actually delivered or services rendered. If the buyer objects in writing within 15 days of delivery, acceptance is the day the supplier removes the objection. If there is no written objection within 15 days, the day of actual delivery or rendering is the day of deemed acceptance.
Apply the written term or the appointed day
If the parties agreed a payment date in writing, that date applies, but the proviso caps the agreed period at 45 days from acceptance or deemed acceptance. If there is no written agreement on payment, the buyer must pay before the appointed day: the day immediately after the 15-day period from acceptance or deemed acceptance.
Keep proof before any claim
Keep the purchase order, delivery or service record, any objection and its resolution, the invoice and the payment ledger. These records drive the interest calculation under section 16 if payment is late.
Status of the 2026 amendment
The Micro, Small and Medium Enterprises Development (Amendment) Act, 2026 (No. 16 of 2026) received the President's assent on 13 August 2026. Under its section 1(2) it comes into force on dates the Central Government notifies in the Official Gazette, and different provisions can start on different dates. When this page was checked on 11 October 2026, we had not found a commencement notification, so this page describes the law as it stood before that Act. The 2026 Act does not change the wording of section 15. Once in force, it inserts a new section 15A requiring Central Public Sector Enterprises, and other bodies the government notifies, to route settlement of invoices from micro, small and medium enterprises through a Reserve Bank-authorised Trade Receivables Discounting System platform. Check the Gazette for a commencement notification before relying on any 2026 change.
Official sources
Practical checklist
Do
- Verify the supplier's status and keep its registration evidence.
- Record the actual delivery or service date and any written objection.
- Keep the written payment term with the invoice trail.
- Flag payables before the statutory deadline.
Avoid
- Do not treat the invoice date as the acceptance date by default.
- Do not rely on a written payment term longer than 45 days from acceptance.
Frequently asked questions
Can a written contract give the buyer 60 days?
Not for a supplier covered by the Act. The proviso to section 15 says the agreed written period cannot exceed 45 days from acceptance or deemed acceptance.
What if there is no written payment term?
The buyer must pay before the appointed day, which section 2(b) defines as the day immediately after 15 days from acceptance or deemed acceptance.
Has the 2026 amendment changed section 15?
No. The 2026 Act leaves section 15's wording unchanged. It adds a separate section 15A on invoice settlement through TReDS, which applies only once notified into force.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026