Section 15 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 15 is the provision that fixes when a buyer must pay a supplier. It gives two routes: the date agreed in writing, or, where nothing was agreed, "before the appointed day". A proviso then puts a ceiling of forty-five days on any written agreement. Everything in Chapter V on interest, reference to the Facilitation Council and disclosure builds on the default this section defines.
Where a supplier supplies goods or renders services to a buyer, the buyer shall pay on or before the date agreed in writing or, where there is no agreement, before the appointed day. In no case may the period agreed in writing exceed forty-five days from the day of acceptance or the day of deemed acceptance. Missing this date is what triggers compound interest under section 16.
The text, split into its parts
The section is one sentence plus a proviso.
| Part | What it says |
|---|---|
| Trigger | "Where any supplier supplies any goods or renders any services to any buyer" |
| Duty | The buyer "shall make payment therefor" |
| Route 1 | "on or before the date agreed upon between him and the supplier in writing" |
| Route 2 | "where there is no agreement in this behalf, before the appointed day" |
| Proviso | "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" |
Route 1: the written agreed date
The agreement must be in writing. An oral understanding does not qualify as "agreed upon ... in writing" under the wording. If the parties put a date in a contract, purchase order or other written document, the buyer must pay on or before it, subject to the proviso.
Route 2: no written agreement
Where "there is no agreement in this behalf", the buyer pays "before the appointed day". The appointed day, under section 2(b), is the day following immediately after the expiry of fifteen days from the day of acceptance or deemed acceptance. Our article on the appointed day explains how the day of acceptance and deemed acceptance are fixed. A notable detail: route 2 says "before the appointed day", while route 1 says "on or before" the agreed date. The wording differs; quote it as written.
The proviso: the forty-five day ceiling
The proviso says "in no case" may the period agreed in writing exceed forty-five days from the day of acceptance or the day of deemed acceptance. Three features matter.
- It counts from acceptance or deemed acceptance, not from the invoice date.
- It limits the agreed period. The proviso does not say what becomes of an agreement for, say, ninety days. The Act's text does not spell out the consequence, so a careful reading is that the agreement cannot operate beyond forty-five days; compare what section 16 then says about the start of interest, and see section 16.
- It applies only to a period agreed in writing. Where there is no written agreement, route 2 applies.
The income-tax effect of this forty-five day rule under section 43B(h) is covered in our guides, for example Section 43B(h): MSME payment within the 45 days rule; see our income-tax guides for the current position under the Income-tax Act, 1961 and the Income-tax Act, 2025.
Who is bound
The section speaks of "any supplier" and "any buyer". A "buyer" is "whoever buys any goods or receives any services from a supplier for consideration" (section 2(d)). A "supplier" is a micro or small enterprise that has filed a memorandum under section 8(1)(a), together with the bodies listed in section 2(n). So the buyer can be any person, company, firm or government body, while the protected party is the supplier as defined. If a supplier never filed the memorandum, it does not fit that definition. See section 8(1).
For help checking whether a supplier's registration supports a claim, see our MSME Samadhaan service.
What section 15 does not say
- It does not mention a bank rate or an interest rate. Interest is section 16.
- It does not say what happens to a contract clause with a longer period beyond the proviso; it just caps the agreed period.
- It does not cover part payments, adjustments or set-off.
- It does not say how a dispute is resolved. That is section 18.
- It does not say that the goods must meet specification; quality disputes feed into the acceptance question under section 2(b).
Practical examples
Example 1: no written terms. A small supplier delivers services on 1 June. The buyer makes no written objection. Deemed acceptance is 1 June. With no written agreement, the buyer must pay before the appointed day, which follows the expiry of fifteen days from 1 June.
Example 2: a thirty day written term. The purchase order says "payment within 30 days". The date agreed in writing governs, and it is within the forty-five day ceiling. Interest under section 16 starts from the day immediately following the agreed date.
Example 3: a ninety day written term. The contract says ninety days. The proviso says that "in no case" may the agreed period exceed forty-five days from acceptance or deemed acceptance. The buyer cannot rely on the extra forty-five days under the Act's text.
Example 4: objection then cure. The buyer objects in writing within fifteen days; the supplier removes the objection on the 20th day. The day of acceptance shifts to the 20th day, and the forty-five days run from there.
Common mistakes
- Counting the forty-five days from the invoice date.
- Treating an email as no writing at all, or as certainly enough; the Act says "in writing", and proof matters.
- Assuming a medium enterprise is protected. Chapter V protects the "supplier", which section 2(n) limits to micro and small enterprises.
- Confusing the agreed date (route 1) with the appointed day (route 2).
Need help with an unpaid MSME invoice?
If you are a supplier chasing dues, or a buyer trying to find out where you stand, the dates in your papers decide the position. Our team at MSME Samadhaan can read your documents and explain the options in plain terms.
Key takeaways
- The buyer pays by the date agreed in writing or, if none, before the appointed day.
- Any written agreed period is capped at forty-five days from acceptance or deemed acceptance.
- The forty-five days do not run from the invoice date.
- Only a "supplier" as defined in section 2(n) gets the protection.
- Interest for default is a separate provision: section 16.
Read next
- Section 16 of the MSMED Act, 2006: Compound interest on delayed payment
- Section 17 of the MSMED Act, 2006: Recovery of amount due with interest
- MSME Payment Protection: the 45 Day Rule, Sections 15 to 24
- MSME Delayed Payment: Filing a Complaint on the Samadhaan Portal
Disclaimer: Based on the Micro, Small and Medium Enterprises Development Act, 2006 (official text, not amended by the Jan Vishwas Acts of 2023 or 2026) and the Udyam notifications S.O. 2119(E) of 26 June 2020 and S.O. 1364(E) of 21 March 2025, read with later developments noted in the article, as on 30 September 2026. Notifications, rules and the Udyam portal change; verify the current position before acting.