All about MSME-1 Form..!

On 1st May 2019, the Ministry of Corporate Affairs (“MCA") had released e-form MSME 1 (“MSME 1"), where all companies who are obtaining supplies of goods/ services from micro and small enterprises and whose respective payments towards such enterprises exceeding 45 days from the date of acceptance or the date of estimated acceptance of such products or services are required to file MSME 1, by 30th May 2019.

What is MSME Form 1 (MCA)?

The MSME 1 Form 1 is introduced by MCA in order to provide information on the payment made on a half-yearly basis regarding the outstanding payments to Micro or Small Enterprises for a period beyond 45 days with the Registrar of Companies (ROC). However, MSME 1 Form this is applicable to only micro and small enterprises and not to medium enterprises

A half-yearly return is needed to be submitted to the Ministry of Corporate Affairs on a compulsory basis, by all those specified corporations who receive the supply of goods/ services from Micro or small businesses and the payment made to these micro as well as small enterprise suppliers had exceeded 45 days from the date of acceptance (or deemed acceptance) of the related goods or services.

In the MSME Form 1, some of the important details must be stated which includes:

• The amount of payment due

• The reasons for the delay

According to Section 405 of the Companies Act, 2013, the Central Government had made it essential for all the “Specified Companies” towards furnishing the above-notified information relating to the payment to micro and small enterprise suppliers.

Specified Companies: As per the provisions of section 9 of the MSME Development Act, 2006, Specified companies are those companies who receive the supply of goods or services from MSMEs and the payment against these supplies to the suppliers of these MSMEs exceed 45 days from the date of acceptance (deemed acceptance) of the goods or services

MSME Form 1 applicability on Companies:

According to a notification issued by the MCA it has been directed to file disclosures through MSME 1 Form for each type of the Company – Public or Private Company, Micro or Small Companies. The Corporation must satisfy the following two conditions:

Condition 1: the corporation must have received Goods and/or Services from Micro or Small Enterprise

Condition 2: Payment should have been due/not paid, towards such Micro and Small Enterprise for 45 days from the date of acceptance

Note: The date of estimated delivery refers to the acceptance of goods and services by the buyer in writing with no objection to the goods or services received within the 15 days’ time period.

Due Date for filling MSME 1 Form:

MSME Form 1 Due Date (Initial Return):

The government had declared the MSME form 1 due date will be till 30th May 2019 for each and every eligible enterprise. The department had earlier stated that the due date for businesses towards filing the form would be 30 days from when it is uploaded on the official website.

MSME Form 1 Due Date (Half Yearly Return):

MSME I Form (half-yearly return) had to be filed within 30 days from the end of each half-year regarding outstanding payments towards Micro or Small Enterprise, that is, 30th April 2020 (For October 2019 to March 2020) and 31st October 2020 (For April 2020 to September 2020).

Procedure for Filing MSME Form 1 (MCA)

The companies should file, the MSME Form I detailing all the outstanding/ dues against the Micro or small enterprises suppliers that are existing on the date of notification of the related order within 30 days from the date of deployment of E-form MSME-1 on the MCA Portal.

“Form MSME I (half-yearly return) has to be filed within 30 days from the end of each half-year in respect of outstanding payments to Micro or Small Enterprise i.e. 30th April 2020 (for October 2019 to March 2020) 31st October 2020 (April 2020 to September 2020)”

• All the Companies falling under the above-mentioned category, would require to file MSME Form I as a half-yearly return by October 31st, for the period from April to September and later by 30th April for the period from October to March and must furnish the below details in it:

1) the amount of payment due and 2) reasons for the delay

• Thus Concludingly, each Specified Company, public or private, that obtains goods and services from the small and micro-enterprise and whose payment is due with such micro and small enterprise suppliers for 45 days from the date of acceptance, shall be required to file MSME Form as a half-yearly return every year.

Penalty for Non-Compliance of MSME 1 Form:

Any enterprise defaulting under these provisions shall be forced to pay a fine of up to Rs.25,000; while the defaults of a Director, CFO, or CS of a company shall qualify for an imprisonment term of up to 6 months or a penalty ranging from Rs.25,000 to Rs.3,00,000.

FAQs

1. What details are required to be furnished by companies in the MSME-1 Form?

– Companies are required to furnish the following details through the MSME-1 Form:

• The amount of payment due

• The reasons for the delay

• Name of the Supplier

• PAN details of the supplier

• Date from which amount is due

2. What do you mean by a Specified Company under MSME Form-1?

– A specified Company under MSME Form-1 includes a Public or Private company who:

• Receives goods or services from Micro or Small Enterprises (MSME)

• The payment for such services is due to the enterprise exceeding 45 days

3. Can MSME Form I be filed with ‘Zero’ outstanding amount?

– No, you cannot file MSME Form I with zero or NIL outstanding amount.

4. What is the statutory fee for the filing of MSME Form I?

– No Fees

5. Any additional fee (late fee) is required to be paid for delay in filing of MSME Form?

– No Fees