What Is Form MSME-1? Half-Yearly Return Filing, Due Date & Fee

Imagine a company buys raw materials from a small business but does not pay the supplier on time. The government wants to know about such delayed payments so that small businesses are not left waiting for their money. Form MSME-1 helps the government collect this information.

Need help with Form MSME-1 filing and MCA compliance? Connect with Startup Movers for assistance with documentation, half-yearly return filing and company compliance requirements.

What Is Form MSME-1?

Form MSME-1 is a half-yearly compliance form that certain companies in India must file with the Registrar of Companies (ROC) through the Ministry of Corporate Affairs (MCA) portal. It is used to report details of payments that remain unpaid to Micro and Small Enterprise suppliers for more than the permitted period under applicable rules.

Form MSME-1 helps the government track delayed payments to eligible small businesses and ensures that companies report such delays as required by law. Introduced under the Ministry of Corporate Affairs' 2019 order, the form is governed by the applicable provisions of the Companies Act, 2013, and related rules.

Who Is Required to File Form MSME-1?

A company covered by the MSME-1 filing requirements must report qualifying delayed payments to Micro and Small Enterprise suppliers.

In general, the filing requirement applies when:

• The company has purchased goods or services from a Micro or Small Enterprise supplier covered by the applicable rules.
• The payment to the supplier has exceeded the permitted period of 45 days from acceptance or deemed acceptance of the goods or services.
• The company falls within the scope of the applicable reporting order.

Important: Form MSME-1 is not the same as MSME Registration. MSME or Udyam Registration identifies an eligible business as a Micro, Small or Medium Enterprise, whereas MSME-1 is a compliance return filed by companies covered by the reporting requirements.

Medium Enterprise suppliers are not included in this specific MSME-1 reporting requirement, which concerns Micro and Small Enterprises.

Why Is Form MSME-1 Important?

The purpose of Form MSME-1 is to help the government track delayed payments to Micro and Small Enterprise suppliers. Through half-yearly MSME-1 return filing, eligible companies report qualifying payment delays and meet their compliance requirements. Filing this return helps companies:

• Meet its applicable MCA compliance requirements.
• Report qualifying delayed payments correctly.
• Maintain clear records of supplier payments.
• Reduce the risk of penalties for non-compliance.
• Show that it takes its legal responsibilities seriously.

What Are the Key Details Required in Form MSME-1?

Form MSME-1 asks for information about the company and its delayed payments to eligible Micro and Small Enterprise suppliers. The details generally include:

• Company details: The company's name, Corporate Identification Number (CIN) and other required identification details.
• Supplier details: Information identifying the Micro or Small Enterprise supplier, as required by the form.
• Outstanding amount: The amount that remains unpaid to the supplier.
• Payment details: Information about payments made after the permitted period and qualifying amounts still outstanding.
• Delay in payment: Details showing how long the payment has been delayed.
• Reason for delay: The reason the company has not paid the supplier within the required time.

The exact fields may depend on the current version of the MCA form. Companies should use the live form available on the MCA portal while preparing their return.

What Documents Are Required for Form MSME-1?

Companies should keep the following information and records ready before filing Form MSME-1:

• Company details: CIN, PAN, registered office address and email ID.
• Supplier details: Names and required identification details of Micro and Small Enterprise suppliers.
• Purchase invoices: Bills showing the goods or services purchased.
• Payment records: Bank statements, payment receipts and details of unpaid amounts.
• Outstanding payment details: The amount due and the date from which it became payable.
• Reason for delay: A clear explanation of why the payment has not been made on time.
• Digital Signature Certificate (DSC): A valid DSC of the authorised person required to sign the form.

The exact supporting documents depend on the transaction and the current MCA form requirements. Keep the relevant records ready, even if every document does not need to be uploaded.

What Is the Time Period and Due Date for Filing MSME-1?

Form MSME-1 must be filed twice a year by companies covered by the filing requirements. These are the two reporting periods:

Important: The 2024 amendment clarified that the reporting requirement applies to specified companies with payments pending to Micro or Small Enterprise suppliers for more than 45 days from the date of acceptance or deemed acceptance of goods or services.

What Is the Fee for Filing MSME-1?

The government filing fee for Form MSME-1 is ₹0. There is no prescribed MCA filing fee for submitting this form.

Although filing is free, companies may spend money on professional assistance or obtaining a DSC if required.

How to File Half-Yearly MSME Return (Form MSME-1)?

Companies required to file Form MSME-1 can submit their half-yearly return through the Ministry of Corporate Affairs (MCA) portal. Follow these steps:

• Step 1: Visit the official MCA portal.
• Step 2: Log in using your MCA account credentials.
• Step 3: Find and download the latest Form MSME-1, if required.
• Step 4: Enter the company details, supplier information, outstanding amounts and reasons for payment delays.
• Step 5: Attach the required documents, if applicable.
• Step 6: Digitally sign the form using the authorised signatory’s valid DSC.
• Step 7: Submit the form through the MCA portal.
• Step 8: Save the acknowledgement or filing reference for future use.

What Happens If You Do Not File Form MSME-1?

Failing to file Form MSME-1 when it is required can result in penalties under Section 405(4) of the Companies Act, 2013.

The law provides for the following penalty for non-compliance:

The penalty provision also applies when the company provides information that is materially incorrect or incomplete. The applicable consequences should be checked against the law and facts of the particular case. 

Conclusion

Form MSME-1 is a half-yearly return that helps the government track delayed payments to Micro and Small Enterprise suppliers. Companies covered by the applicable rules must report qualifying payments pending for more than 45 days. The form requires company details, supplier information, outstanding amounts and reasons for payment delays. The filing due dates are 31 October and 30 April, and there is no government filing fee. Companies should keep their records ready, file through the MCA portal and avoid missing deadlines, as non-compliance can lead to penalties.

Need help with Form MSME-1 filing and MCA compliance? Connect with Startup Movers for assistance with documentation, half-yearly return filing and company compliance requirements.