> ## Documentation Index
> Fetch the complete documentation index at: https://docs.erp.arukz.com/llms.txt
> Use this file to discover all available pages before exploring further.

# MSME payments: due dates, interest and overdue list

> Bills from micro and small suppliers: the 15 or 45-day due date, interest at three times the RBI bank rate, the income-tax flag and a half-yearly overdue list.

ARUKZ ERP works out when each bill from a micro, small or medium supplier must be paid under section 15 of the MSMED Act, 2006, the interest under section 16 if it is paid late, and which unpaid amounts the Income-tax Act, 2025 lets you deduct only when paid. It gives you an **MSME payables** report and a **Half-yearly overdue list** for your CA. It does not prepare MSME Form I itself.

> [!NOTE]
>
> The **MSME payments** module is switched on by ARUKZ staff when you need it. It sits under **Accounting → MSME payables**. See [Modules](https://docs.erp.arukz.com/admin/modules.md).

## Set it up

**1. Mark your MSME suppliers**

Under **Suppliers**, add each supplier's **Enterprise type** (micro, small or medium), **Udyam number**, and the **Payment days agreed in writing**, if any.

**2. Enter the RBI bank rate**

Under **Bank rates**, enter the bank rate notified by RBI and the date it is **In force from**. Nothing is seeded; add a row each time RBI changes it.

**3. Record when goods were accepted**

On the **MSME payables** report, use **Set date** on a bill to record when the goods were accepted. The due date runs from that day.

## How the due date and interest are worked out

| Rule | How ARUKZ ERP applies it |
| - | - |
| Due date, MSMED Act s.15 | With no written agreement, pay within 15 days of acceptance. An agreed period cannot go past 45 days. So the last day is acceptance plus 15, or plus the agreed days. |
| Interest, s.16 | Compound interest with monthly rests at three times the RBI bank rate, added at the end of each month once the bill is overdue. |
| Income tax, s.37(2)(g) | What is owed to a micro or small enterprise beyond the s.15 limit is deductible only when actually paid. Those bills carry a **Deduct only when paid** badge. |

> [!WARNING]
>
> The Act does not settle two details, so ARUKZ ERP made a choice your CA should confirm: each monthly rest uses the bank rate in force on its first day, and a part month at the end is charged by days over 365. Medium enterprises are listed with their due date but no interest figure, because whether these sections reach them is for your CA to say.

## The reports

> [card] MSME payables
>
> Bills from MSME suppliers: what is still owed on the report date, when it fell due and the interest on it. A bill paid late stays on the report for the financial year it was paid in.

> [card] Half-yearly overdue list
>
> Amounts overdue to micro and small enterprises at the end of April to September or October to March. A working list, not MSME Form I.

## What it does not do yet

* It does not prepare or file MSME Form I. The half-yearly list is a working list for your CA.
* It does not read a supplier's Udyam status from the government portal. You enter it.
* It does not post the interest to the books.

## Related

> [card] [Purchases](https://docs.erp.arukz.com/modules/purchases.md)
>
> Purchase orders, goods receipts and vendor bills.

> [card] [TDS](https://docs.erp.arukz.com/gst/tds.md)
>
> Deductions on vendor bills, challans and Form 140 data.


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