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    Question

    As per the MSMED Act, the maximum period agreed upon for

    payment between buyer and MSME supplier should not exceed:
    A 15 days Correct Answer Incorrect Answer
    B 30 days Correct Answer Incorrect Answer
    C 45 days Correct Answer Incorrect Answer
    D 60 days Correct Answer Incorrect Answer
    E 90 days Correct Answer Incorrect Answer

    Solution

    The MSMED Act mandates that the payment period agreed upon between an MSME supplier and a buyer must not exceed 45 days, regardless of the terms mutually agreed upon in writing. This legal provision is intended to safeguard MSMEs from prolonged payment cycles which often disrupt their working capital flow. Beyond 45 days, buyers are liable to pay interest, ensuring financial discipline in business transactions and improving the financial health of MSMEs.

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