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KMA PCS

Kajol Mathur & Associates

Practicing Company Secretaries

All about Form MSME-1 – Return for Outstanding Payments to MSMEs

  • Writer: Kajol Mathur
    Kajol Mathur
  • May 6
  • 3 min read

Form MSME-1

✅ Purpose of Form MSME-1


To report outstanding payments due to Micro and Small Enterprises (MSEs) beyond 45 days from the date of acceptance or deemed acceptance of goods/services.


This filing is mandated under the Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2019.



📘 Legal Framework


  • Section 405 of the Companies Act, 2013 (Enabling Section) : “The Central Government may, by order, direct any company or class of companies to furnish such information or statistics as may be specified in the order within such time and in such form and manner as may be specified therein.”

  • MSMED Act, 2006 : Sec 15 :“A buyer must make payment to the supplier within 45 days from the date of acceptance or deemed acceptance of goods/services.”

  • MSMED Act, 2006 : Sec 16 : “If a buyer fails to make payment within 45 days, they are liable to pay compound interest with monthly rests at three times the bank rate notified by RBI”

  • Companies (Furnishing of Information about Payment to MSME Suppliers) Order, 2019



🏢 Applicability


Form MSME-1 is Applicable to:

  • All companies (Private or Public) who:

    1. The company has received goods or services from suppliers who are registered as Micro or Small Enterprises (MSEs) under the MSMED Act, 2006; and

    2. The payment to such MSME suppliers is outstanding for more than 45 days from the date of acceptance or deemed acceptance of such goods or services.

    3. The payment made to MSME suppliers after 45 days from the date of acceptance or deemed acceptance of such goods or services during the half year.


Not applicable if:

  • No dealings with MSMEs.

  • No such delayed payments exist, payments are made within the 45-day window.

  • Medium Enterprises are not covered under this reporting requirement — only Micro and Small enterprises.



📅 Due Dates

Period

Due Date

April to September (H1)

By 31st October

October to March (H2)

By 30th April



📄 Details Required in MSME-1


The company must report the following for each MSME creditor with delayed payments:

  1. Name of the supplier

  2. PAN of the supplier (if available)

  3. Amount due

  4. Date from which amount is due

  5. Reasons for delay in payment


Additional information required on V3 :

Micro and Small vendors to whom payment has been done during half year and within 45 days

2.   Micro and Small vendors to whom payment has been done during half year but after a period of 45 days

3.   Micro and small vendors whose payment is outstanding as of end of half year, but 45 days are not yet over (o/s for less than 45 days)

4.    Micro and small vendors whose payment is outstanding as of end of half year, and 45 days are over (o/s for more than 45 days



🧾 Documents Required


  • MSME Registration Certificate/Udyam Registration of the suppliers

  • Invoices with dates and amounts

  • Ledger accounts of the suppliers

  • Board resolution authorizing the signatory (if needed)



📌 How to Identify MSMEs


  • The supplier must be registered under Udyam Portal as Micro or Small enterprise.

  • Medium enterprises are not covered under MSME-1.

  • Registration can be verified via the Udyam portal.



⚠️ Penalty for Non-Compliance


  1. Additional Fees: MCA has not prescribed any additional fees on MSME-1. Therefore, even if company has filed its MSME-1 after the due date it is not required to pay any additional fees.

  2. Penalty: As Section 450 prescribed penalty in case of default of section 405 of Companies Act, 2013.

  3. Penalty on Company: A penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company

  4. Penalty to Director: Fifty thousand rupees in case of an officer who is in default or any other person



✍️ Signing Authority


Must be signed by:

  • Director, Manager, Company Secretary, or Authorized representative with DSC



✔️ Key Points

  • Filing is mandatory, even if only one supplier qualifies and dues are unpaid >45 days.

  • If there are no such outstanding dues, no filing is needed.

  • Filing must be half-yearly and regularly monitored.



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