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This is the number your bid price has to survive. It works a concrete case (a Rs 5,00,000 invoice carries Rs 90,000 GST you remit before the buyer pays you), which is exactly the government-contract trap: you fund the tax on money you have not collected for 90 to 120 days. It also spells out the MSMED Act 45-day rule, the automatic interest at 3x the RBI bank rate compounded monthly, and the Samadhaan route, so you can price working-capital cost in instead of discovering it two years into a contract.
7 Critical MSME Delayed Payment Rules in India (2026) That Can Protect Your Cash Flow
From The Jack Rabbit by The Jack Rabbit 12 min read
- You remit GST (Rs 90,000 on a Rs 5,00,000 invoice) before the buyer pays, so cost the tax-funding gap into your bid margin
- MSMED Act caps payment at 45 days and auto-charges interest at 3x RBI bank rate compounded monthly, overriding any longer contract terms
- MSME Samadhaan and the Facilitation Council (roughly 90-day resolution, 75% pre-deposit to appeal) are your recovery levers on a delayed government payment
