COIMBATORE: Coimbatore-based Railway Suppliers Association (RASA) has written to railways minister Piyush Goyal demanding interest on delayed payments to MSME railway suppliers.
According to the association, when the railways collects hefty penalties from suppliers over delayed supplies, suppliers shall also be entitled to receive interest for delayed period as per the MSMED Act 2006. It said the railways system to release payment to non-regular purchases (non-stock items) left much to be desired.
The association said levying interest on delayed payments would force officials to clear the bills in time.
RASA said there are at least 76 MSMEs in Coimbatore district. Some of them have dues worth Rs 2 crore. In total, there is a total due of Rs 50 crore, according to the association. This is despite the railways issuing a circular on June 16 asking all bill paying officers to clear pending dues immediately.
“All of us manufacture only by taking bank loans and then additionally pay 10% of the order value as bank guarantee before we supply the product. When payments get delayed, we are constantly paying bank interest for the loan which is not fair. We don’t have money to pay bank guarantee for the next order we accept,” said RASA president S Surulivel.
He said certain zonal railways and divisional railways, like North Eastern Railway, Gorakhpur and South Eastern Railways were perennial defaulters. The association demanded that the railway accounts department function at full strength because this is another reason given for delayed payments.
“While the railways have come up with an effective online system to pay bills of regular stores and stock items, the same system for non-regular purchases is absent. We are forced to run from pillar to post to get payment for non-stock bills,” he added.
The association has appealed for not penalizing delayed supply since normal production is yet to be restored in many industries and there are frequent delays in transportation and raw materials are often not available. “They should wave all penalties for late supply till March 2021,” said Surulivel.