The invoice is overdue. Your team keeps calling. The customer keeps promising “next week”. At this point, the useful question is: which next step will move the matter forward?
A GST portal message, an MSME delayed-payment claim and a recovery suit serve different purposes. Choose the route after checking the balance, evidence, eligibility and contract. None guarantees payment merely because a reminder or application has been sent.
1. Confirm the amount before escalating
Reconcile invoices, receipts, credit notes and agreed adjustments. Separate disputed items from amounts that have not been disputed, without assuming silence is a legal admission.
For illustration, if a ledger shows ₹5 lakh due but a ₹50,000 receipt is unallocated, the reconciled balance is ₹4.5 lakh before further adjustments. If ₹1 lakh is disputed, show it separately. Do not send a ₹5 lakh demand based on an unreconciled ledger.
Keep the order or agreement, invoice, delivery or acceptance evidence, ledger and buyer correspondence together. These documents help establish what was supplied, what was agreed and what remains unpaid.
2. Send a clear written reminder
State the invoice references, reconciled amount, contractual payment terms and requested response date. Ask the buyer to identify any dispute and confirm a payment plan in writing.
If a settlement involves a discount, waiver or full-and-final discharge, understand its effect before accepting. Record any arrangement accurately; do not backdate a document to repair missing evidence.
A reminder is a commercial step. It is not a substitute for checking the legal limitation period. Have that reviewed early instead of waiting through repeated promises.
3. Use GST portal communication where available
GSTN provides a counterparty messaging facility for eligible registered users. Its manual describes this path:
- Log in and open Services → User Services → Communication Between Taxpayers.
- Choose Compose and select Recipient for a message to your buyer.
- Enter the counterparty GSTIN and relevant invoice details; use the appropriate action/remarks, including Others where applicable.
- Retain the sent communication and reply.
The facility excludes certain registration types, including TDS, TCS and non-resident taxable persons. Check availability for the actual users.
This is a communication channel. It does not adjudicate your debt or turn a payment request into a GST recovery order.
Official GSTN manual: https://tutorial.gst.gov.in/userguide/returns/Manual_communication.htm
4. Assess MSME delayed-payment relief
Qualifying micro and small suppliers have a specific delayed-payment framework under sections 15–18 of the MSMED Act, 2006. It can support a claim for the amount due and statutory interest. Section 16 provides for compound interest with monthly rests at three times the RBI-notified bank rate where applicable; this is not a fixed annual percentage to copy from an old post.
First check the supplier’s eligibility, activity, relevant registration history, transaction dates, delivery/acceptance records and applicable payment terms. Being described as an MSME—or holding a registration certificate—does not decide every claim. Do not assume that a medium enterprise or every trading activity has the same entitlement.
The Ministry provides an MSME ODR scheme and portal for delayed-payment dispute resolution. Review the current filing route and jurisdiction of the appropriate MSEFC before submitting. Portal access and substantive legal entitlement are separate questions.
Prepare the claim from the reconciled invoices and supporting records. Any interest calculation should use the correct trigger dates, applicable rate and legal basis; an inflated figure makes the dispute harder to resolve.
Official Ministry overview: https://ramp.msme.gov.in/ramp/RAMP-initiative/msme-samadhaan/msme-samadhaan
Official ODR portal: https://odr.msme.gov.in/
Official ODR guidelines: https://odr.msme.gov.in/assets/pdf/MSE_Scheme_on_ODR_for_Delayed_Payment_Guidelines.pdf
Ministry explanation of delayed-payment interest: https://www.msme.gov.in/sites/default/files/FINAL_MSME_ENGLISH_AR_2019-20.pdf
5. Review legal notice, settlement and proceedings
Where payment remains unresolved, an advocate can assess a formal demand notice and the appropriate legal route. A notice should explain the factual and contractual basis of the claim, not make unsupported threats.
Possible routes include negotiated settlement, mediation, contractual arbitration where applicable, or a civil/commercial recovery suit. They are alternatives to assess, not a sequence that every claimant must follow. If an MSMED claim is available, its relationship with a contractual arbitration clause also needs legal review.
For a suit governed by the Commercial Courts Act that does not contemplate urgent interim relief, section 12A requires exhaustion of pre-institution mediation. Jurisdiction, the nature/value of the dispute and the relief sought need review before filing. A clause saying “urgent” is not a substitute for an actual legal assessment.
Ask counsel to assess limitation, evidence, forum, likely costs and enforcement prospects. Court proceedings are a means to pursue a claim; they are not a promise that the customer has funds to pay it.
Official NALSA guidance: https://nalsa.gov.in/pre-instituion-mediation/
A practical way to choose the next step
- Balance unclear: reconcile first and separate disputed items.
- Buyer responsive: seek a specific written payment plan.
- Eligible GST users: consider a portal message as an additional documented communication.
- Potential micro/small supplier claim: assess MSMED eligibility and the ODR/MSEFC route.
- Unresolved dispute or limitation concern: obtain prompt legal advice on notice and proceedings.
Do not keep extending credit automatically while old invoices remain unresolved. Review future orders against the overdue balance, your contract and available cash.
How Khatabahi Taxpert can help
Start with your customer ledger, invoices and the buyer’s latest response. We can help reconcile the amount and organise the financial records for a recovery discussion. The engagement scope should be agreed before work begins; legal notices and court representation should be handled by the appropriate legal professional.
Office No. 1421, SVH83 Metro Street, Sector 83, Gurugram.
Website: https://khatabahitaxpert.com
Editorial note: Prepared 30 September 2026. This article distinguishes a portal communication from statutory and court remedies. Eligibility, limitation and relief depend on the transaction; it does not promise recovery or prescribe a universal route.