Sections Particulars
Chapter I Preliminary
1 Short title and commencement
1.     This Act may be called the Micro, Small and Medium Enterprises Development Act, 2006. 2.     It shall come into force on such date as the Central Go...
2 Definitions
In this Act, unless the context otherwise requires, (a) Advisory Committee means the committee constituted by the Central Government under sub-section (2) of...
Chapter II National Board for Micro, Small and Medium Enterprises
3 Establishment of Board
1.     With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, a Board ...
4 Removal of member from Board
1.     The Central Government may remove a member of the Board from it, if hea.     is, or at any time has been, adjudged as insolvent; orb.    is, or become...
5 Functions of Board
The Board shall, subject to the general directions of the Central Government, perform all or any of the following functions, namely: a.     examine the factor...
6 Powers and functions of member-secretary of board
Subject to other provisions of this Act, the Member-Secretary of the Board shall exercise such powers and perform such functions as may be prescribed....
Chapter III Classification of Enterprises, Advisory Committee and Memorandum of Micro, Small and Medium Enterprises
7 Classification of enterprises
1.     Notwithstanding anything contained in section 11B of the Industries (Development and Regulation) Act, 1951, the Central Government may, for the purpos...
8 Memorandum of micro, small and medium enterprises
1.     Any person who intends to establish, a.     a micro or small enterprise, may, at his discretion, orb.    a medium enterprise engaged in providing or ...
Chapter III Measures For Promotion, Development and Enhancement of Competitiveness of Micro, Small and Medium Enterprises
9 Measures for promotion and development
The Central Government may, from time to time, for the purposes of facilitating the promotion and development and enhancing the competitiveness of micro, smal...
10 Credit facilities
The policies and practices in respect of credit to the micro, small and medium enterprises shall be progressive and such as may be specified in the guidelines...
11 Procurement preference policy
For facilitating promotion and development of micro and small enterprises, the Central Government or the State Government may, by order notify from time to ti...
12 Funds
There shall be constituted, by notification, one or more Funds to be called by such name as may be specified in the notification and there shall be credited t...
13 Grants by Central Government
The Central Government may, after due appropriation made by Parliament by law in this behalf, credit to the Fund or Funds by way of grants for the purposes of...
14 Administration and utilisation of Fund or Funds
1.     The Central Government shall have the power to administer the Fund or Funds in such manner as may be prescribed.2.     The Fund or Funds shall be ut...
Chapter IV Delayed Payments to Micro and Small Enterprises
15 Liability of buyer to make payment
Where any supplier, supplies any goods or renders any services to any buyer, the buyer shall make payment therefore on or before the date agreed upon between ...
16 Date from which and rate at which interest is payable
Where any buyer fails to make payment of the amount to the supplier, as required under section 15, the buyer shall, notwithstanding anything contained in any ...
17 Recovery of amount due
For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the amount with interest thereon as provided under section 16....
18 Reference to micro and small enterprises facilitation council
1.     Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under secti...
19 Application for setting aside decree, award or order
No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate disput...
20 Establishment of micro and small enterprises facilitation council
The State Government shall, by notification, establish one or more Micro and Small Enterprises Facilitation Councils, at such places, exercising such jurisdic...
21 Composition of micro and small enterprises facilitation council
1.     The Micro and Small Enterprise Facilitation Council shall consist of not less than three but not more than five members to be appointed from among the...
22 Requirement to specify unpaid amount with interest in the annual statement of accounts
Where any buyer is required to get his annual accounts audited under any law for the time being in force, such buyer shall furnish the following additional in...
23 Interest not to be allowed as deduction from income
Notwithstanding anything contained in the Income-tax Act, 1961, the amount of interest payable or paid by any buyer, under or in accordance with the provision...
24 Overriding effect
The provisions of sections 15 to 23 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force....
25 Scheme for closure of business of micro, small and medium enterprises
Notwithstanding anything contained in any law for the time being in force, the Central Government may, with a view to facilitating closure of business by a mi...
Chapter VI Miscellaneous
26 Appointment of officers and other employees
1.     The Central Government or the State Government may appoint such officers with such designations and such other employees as it thinks fit for the purp...
27 Penalty for contravention of section 8 or section 22 or section 26
1.     Whoever intentionally contravenes or attempts to contravene or abets the contravention of any of the provisions contained in sub-section (1) of sectio...
28 Jurisdiction of courts
No court inferior to that of a Metropolitan Magistrate or a Magistrate of the first class shall try any offence punishable under this Act....
29 Jurisdiction of courts
1.     The Central Government may, by notification, make rules to carry out the provisions of this Act.2.     In particular, and without prejudice to the g...
30 Power to make rules by State Government
1.     The State Government may, by notification, make rules to carry out the provisions of this Act.2.     In particular, and without prejudice to the gen...
31 Power to remove difficulties
1.     If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make ...
32 Repeal of Act
1.     The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 is hereby repealed. 2.     Notwithstanding such repe...
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