MSME Form 1 is a regulatory document required by the Ministry of Corporate Affairs (MCA) for companies to report outstanding payments to micro, small, and medium enterprises (MSMEs) that exceed 45 days from the date of acceptance or deemed acceptance.

What is the penalty for not filing MSME Form 1?

The penalty for not filing MSME Form 1 includes a fine of Rs. 20,000 for the company and each officer in default. If non-compliance continues, an additional fine of Rs. 1,000 per day may be levied, up to a maximum of Rs. 3 lakhs.

What is the due date for filing Form MSME-1?

MSME Form 1 must be filed semi-annually: by October 31st for the period from April to September, and by April 30th for the period from October to March.

How do I file MSME Form 1?

MSME Form 1 can be filed online through the MCA (Ministry of Corporate Affairs) portal. Companies need to fill out the form with required details, digitally sign it using a Digital Signature Certificate (DSC), and submit it electronically.

When is the last date for filing MSME Form 1?

The last date for filing MSME Form 1 is October 31st for the first half of the financial year (April to September) and April 30th for the second half (October to March).

Is it compulsory to file MSME Form 1?

Yes, it is compulsory for specified companies to file MSME Form 1 if they have outstanding payments to MSME suppliers exceeding 45 days.

Is there any extension for filing MSME Form 1?

Extensions for filing MSME Form 1 are not typically granted. Companies must adhere to the specified due dates unless otherwise notified by the MCA.

What is the procedure for filing MSME Form 1?

The procedure involves downloading the form from the MCA portal, entering the required details, attaching necessary documents, digitally signing the form, and submitting it online.

What details are required for filing MSME Form 1?

Required details include the company's CIN and PAN, contact information, total outstanding amount, financial year, supplier details, due date of payment, and reasons for any payment delays.

What is the last date to file MSME Form 1?

The last dates for filing MSME Form 1 are October 31st for the period from April to September and April 30th for the period from October to March.

Is every company required to file MSME Form 1?

Only companies that have outstanding payments to MSME suppliers beyond 45 days are required to file MSME Form 1.

How to file a Nil return in MSME Form 1?

Companies need not file a 'Nil MSME-1 Return' if there are no outstanding amounts due to MSME suppliers beyond 45 days.

What are the consequences of non-filing of MSME Form 1?

Non-filing of MSME Form 1 can result in significant penalties for the company and its officers, including fines and potential reputational damage due to non-compliance with legal requirements.

Who should file MSME Form 1?

Companies with outstanding payments to MSME suppliers that have not been settled within 45 days of the goods or services being accepted or deemed accepted must file MSME Form 1.

What is the penalty for late filing of MSME Form 1?

The penalty includes an initial fine of Rs. 20,000 for the company and each officer in default, plus Rs. 1,000 for each day the filing is delayed, up to a maximum of Rs. 3 lakhs.

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MSME Form-1

Q: Are there any exemptions to file MSME Form 1?

Companies with no outstanding dues to MSME suppliers beyond 45 days from the date of acceptance or deemed acceptance of goods and services are exempt from filing MSME Form 1.

MSME Form 1 is a mandatory filing required by the Ministry of Corporate Affairs (MCA) for companies that have outstanding payments to suppliers registered as Micro, Small, and Medium Enterprises (MSMEs) under the MSME Act, 2006. This form is part of the compliance to ensure that MSMEs are paid within the stipulated time to prevent cash flow issues for these smaller businesses, which are often more vulnerable to payment delays.

For businesses seeking to ensure compliance with MSME Form 1 filings, look no further than IndiaFilings. Our expert team is ready to assist you with every detail of the filing process, from determining applicability to submitting the form accurately. Avoid the hassle and potential penalties associated with late or incorrect filings by letting IndiaFilings handle your company compliance needs.

What is Form MSME 1?

Form MSME 1 is a crucial regulatory document required by the Ministry of Corporate Affairs (MCA) under the provisions of the MSME Development Act, 2006. It is designed to ensure that micro, small, and medium enterprises (MSMEs) are paid timely for the goods or services they provide to larger companies. The form serves as a reporting mechanism for companies to disclose details of payments to MSME vendors that are overdue beyond 45 days from the date of acceptance or deemed acceptance of goods and services.

Importance of Form MSME 1

Promotes Timely Payments: By mandating the filing of Form MSME 1, the government aims to curb delays in payment practices, ensuring that MSMEs receive their dues within a reasonable timeframe, which is vital for their liquidity and ongoing operations.
Enhances Transparency: It increases transparency in the financial dealings between giant corporations and MSMEs, fostering a fair trade environment.
Legal Compliance: Helps companies comply with legal requirements, avoiding potential penalties and legal repercussions associated with late payments to MSMEs.
Economic Support: Timely payments are critical for the financial health of MSMEs, which are often less equipped to handle prolonged payment delays than larger firms.

Purpose of MSME Form 1

The form helps monitor and ensure that payments to MSME suppliers are made within 45 days of receiving goods or services. If payments are delayed beyond this period, the form serves as a declaration of such dues.

Applicability of MSME Form 1

MSME Form-1 is applicable when a company has outstanding payments to MSME-registered vendors for a period exceeding 45 days. This form is used to report defaults in payments to these vendors. It is required for any company that meets these conditions, irrespective of the company's type. If a company has MSME vendors and the payment due to these vendors has not been settled within 45 days, the company must file an MSME Form-1.

MSME Form 1 Due date

MSME Form-1 is required to be submitted semi-annually to the Registrar of Companies (ROC). The MSME Form 1 last date is as follows:

For the period from April to September: The form must be filed on or before October 31st.
For the period from October to March: The form must be filed on or before March 30th

Due Date	Period for which MSME-1 is filed
30 April	For October-March period
31 October	For April-September period

Key Changes to MSME-1 Filing Requirements

The Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Amendment Order, 2024 introduces significant changes to the compliance requirements for companies dealing with micro and small suppliers. Previously, companies were not required to file an ‘MSME-1 Return’ if there were no outstanding payments to these suppliers at the end of the reporting periods on 31st March and 30th September.

However, under the new amendment, additional details must now be reported in the MSME-1 Return, enhancing transparency and accountability in financial interactions with micro and small enterprises.

MSME Form 1 Nil Return

Earlier Companies were not required to file a 'Nil MSME-1 Return' if no outstanding amounts are owed to MSME suppliers.

Under the new regulatory framework set by the 2024 amendment, the filing of a MSME Form 1 Nil Return is no longer applicable in the same way it was previously. Prior to this amendment, companies were not required to file MSME Form 1 if there were no outstanding dues to MSE suppliers at the end of the reporting periods (31st March and 30th September).

With the 2024 amendment, the requirements have shifted to a more comprehensive reporting structure:

All specified companies must now report any payments to MSE suppliers that remain outstanding for more than 45 days from the date of acceptance or deemed acceptance of goods and services, regardless of whether these amounts are outstanding at the end of the reporting period.

Details required for MSME Form 1 Filing

When filing MSME Form-1, companies must provide specific information to ensure compliance with regulatory requirements regarding payments to MSME vendors. The details required include:

CIN and PAN of the Company: Identification numbers for corporate and tax purposes.
Company Contact Information: Name, email, and physical address of the company.
Total Outstanding Amount: This figure should include the total amount outstanding to the MSME vendor. It encompasses payments that were made after 45 days as well as any amount still due after the 45-day period at the end of the half-year.
Financial Year: The relevant financial year for the reported data.
Supplier Details: Name of the supplier and their PAN.
Due Date of Payment: The date from which the outstanding amount is due to the MSME vendor.
Reason for Payment Delay: Companies must specify the exact reason for the payment delay. Possible reasons might include:

The invoice was not received on time.
Issues with the goods or services received or disputes related to them.
Technical problems at the bank’s end.

As per the Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Amendment Order, 2024, The updated reporting requirements include:

Amount Paid Within 45 Days: Ensuring that timely payments are highlighted.
Amount Paid After 45 Days: Identifying payments that missed the regulatory deadline.
Amount Outstanding for 45 Days or Less: Providing insights into current financial obligations that are within the permissible time frame.
Amount Outstanding for More than 45 Days: Focusing on overdue payments that could impact the financial stability of MSMEs.
Reason for Delay in Payment/Amount Outstanding: Offering explanations for late payments can help in understanding and resolving payment issues.

Documents Required for Form MSME-1

When filing Form MSME-1, the following documents are required:

Digital Signature Certificate (DSC) of Directors: The form must be signed digitally by the company’s directors using their DSC.
List of Creditors: While there are no mandatory attachments, it is advisable to include a list of creditors who are MSMEs, along with their certifications.
Details of Outstanding Payments: Include information on payments due for more than 45 days, along with reasons for the delay.

Penalty for not Filing MSME Form 1

For failing to submit Form 1 of MSME, the company and each officer in default will incur a penalty of Rs. 20,000. If the non-compliance persists, an additional penalty of Rs. 1,000 per day will be imposed for each day the failure continues, with the maximum penalty not exceeding Rs. 3 lakh.

How to file MSME Form-1?

Filing the MSME-1 return involves a systematic process to ensure compliance and accurate reporting to the Ministry of Corporate Affairs (MCA). Here’s a step-by-step guide to help you navigate the filing procedure:

MSME Form 1 Download: Download the MSME-1 form from the MCA portal.
Prefill Details: Enter your company's corporate identification number (CIN). This will allow the form to prefill some of the company details automatically.
Enter Creditor Details: Manually input the details for each MSME creditor. This includes their name, the amount due, and the payment timeline.
Specify Reasons for Delay: If there has been a delay in payment, you must specify the reason for each case directly on the form.
Attach Required Documents: Although the MSME 1 form typically requires no mandatory attachments, ensure any supportive documents that might help in understanding the delays or transactions are attached.
Pre-Scrutiny Check: Before submission, use the 'Check Form' and 'Pre-Scrutiny' features to ensure that all data entered is correct and that the form is compliant with the MCA's requirements.
Sign with DSC: The form must be digitally signed by the directors of the company using their Digital Signature Certificate (DSC).
Pay Fees and Upload: While there is typically no fee associated with MSME-1, confirm any updated requirements on the MCA portal. Once everything is in order, upload the completed form.

IndiaFilings experts can assist you at every step of the MSME-1 filing process, ensuring compliance and accuracy.

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IndiaFilings experts are here to guide you through every step of filing Form MSME 1, ensuring that your submissions are timely, accurate, and fully compliant with the regulations set by the Ministry of Corporate Affairs. Our team offers specialised assistance to simplify the process and address any concerns you might have, making it easier for your business to maintain its commitments to MSME vendors without any hassle.

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