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Demand Notice with Section 16 Interest (MSMED Act)

Use when friendly reminders have failed. The notice computes Section 16 interest to date and gives the buyer 15 days before you approach the MSE Facilitation Council (MSEFC) through the MSME Samadhaan portal.

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Your business name *

Your registered address *

Your GSTIN

Authorised signatory *

Signatory designation

Recipient name *

Attention (person / designation)

Recipient address *

Invoice number(s) and date(s) *

Amount outstanding (₹) *

Date payment fell due *Agreed date, capped at 45 days from acceptance (Sec 15). If nothing was agreed, 15 days from acceptance.

RBI Bank Rate (% p.a.) *Check the current Bank Rate on rbi.org.in before sending. Section 16 interest = 3 × this rate, compounded monthly.

Your Udyam number *

Place *

Date *

Laws this relies on

MSMED Act, 2006 · Section 15Payment due by agreed date, capped at 45 days from acceptance.
MSMED Act, 2006 · Section 16Compound interest with monthly rests at three times the RBI Bank Rate.
MSMED Act, 2006 · Section 17Buyer is liable to pay the amount with interest.
MSMED Act, 2006 · Section 18Either party may refer the dispute to the MSE Facilitation Council.

How to execute

Sign on your letterhead and send. No stamp paper needed.

Send by Registered Post AD or Speed Post with tracking, and by e-mail. Keep the postal receipt and tracking printout as proof of service.

Click anywhere in the letter to edit it. Changes to the form keep flowing in.

This is a general template, not legal advice. Laws, stamp duty and procedures vary by state and change over time — have a qualified advocate review it for your facts before signing or sending.