FAQ’s on MCA Form MSME-1

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FAQ’s on MCA Form MSME-1

MCA introduced Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order 2019 on 22nd January 2019 and thereby notified filing of Form MSME-1.

Below are some of the FAQ’s on Form MSME-1 and Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order 2019.

FAQ’s on MCA Form MSME-1

What was the reason of Introduction of Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order 2019 dated 22nd January 2019?

Ans : The Central Government vide notification number S.O.5622 (E), dated the 2nd November, 2018 has directed that all companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006) (hereafter referred to as “Specified Companies”), shall submit a half yearly return to the Ministry of Corporate Affairs stating the following:

(a) the amount of payment due; and

(b) the reasons of the delay;

Therefore to Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order 2019 and Form MSME 1 was introduced by MCA so that specified companies
can submit a half yearly return to the MCA stating the (a) the amount of payment due; and (b) the reasons of the delay;

What do you mean by a Specified Company?

Specified Company means Every Company “Public or Private” who Received Goods or Services ‘from’ Micro or Small Enterprises ‘of which’ Payment Due or Not Paid till 45 days

Specified Company

What are the steps to be taken by the Specified Enterprise?

1.) Identify the suppliers Registered under MSME Act : First, they have to find out from their suppliers whether they are Registered under MSME Act then ask for submission of their Registration Certificate.

2.) If there are any such suppliers who are Registered under MSME Act and if the payments to them are due for more than 45 days from the date of acceptance of the goods and services, then we have to pay them their all dues immediately, otherwise the Specified Company shall be liable to file MSME Form I.

What is Due date of Filing Form MSME-1 ? 

As per General Circular No. 01/ 2019 dated 21.02.2019 the period of thirty days for filing initial return in MSME Form 1 shall be reckoned from the date the said e-form is deployed on MCA 21 portal.

Due date of subsequent returns is mentioned below:

For Half year period ‘April to September’31st October
For half year period ‘October to March’30th April
FAQ's on MCA Form MSME-1
FAQ’s on MCA Form MSME-1

Which type of information required to submit with ROC?

Information required to be submitted with ROC in Form MSME-1 includes :

1.) Total outstanding amount due

[For One time return, which has to be submitted upto 22nd February, Total outstanding amount due upto 22nd January have to be reported.]

2.) Name of Supplier

3.) PAN of Supplier

4.) Reasons for delay in payment

What are Micro, Small & Medium Enterprises?

In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are depicted below:
Manufacturing SectorService Sector
EnterprisesInvestment in plant & machineryEnterprisesInvestment in equipment
Micro EnterprisesDoes not exceed Rs. 25 LakhMicro EnterprisesDoes not exceed Rs. 10 Lakh
Small EnterprisesMore than Rs. 25 Lakh but does not exceed Rs. 5 CroreSmall EnterprisesMore than Rs. 10 Lakh but does not exceed Rs. 2 Crore
Medium EnterprisesMore than Rs. 5 Crore but does not exceed Rs. 10 CroreMedium EnterprisesMore than Rs. 2 Crore but does not exceed Rs. 5 Crore

What is the Penalty for Non-Filing of Form MSME-1 ?

Non-compliance will lead to punishment and penalty under the provision of the Companies Act. As per Penalty Provision of Section 405 (4) of the Companies Act, 2013 Fine will be as follows :

On Company – upto Rs. 25,000

On Directors, CFO and CS

Imprisonment – up to 6 Months or

Fine – not less than Rs. 25,000 upto Rs. 3,00,000 per person

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. In no event shall I shall be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.

Author Bio
Name : Pratibha Goyal
Qualification : Chartered Accountant
Company Name : Studycafe.in
Designation : Chartered Accountant
State: Delhi
City : Delhi
Bio : The Author is a qualified Chartered Accountant. For any queries comment below. All your Queries will be addressed.You can also ask your queries on https://studycafe.in/forums

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    Recently, Central Govt has changed the manner of recognition of MSME entities from investment basis to turnover basis. Whether, still MSME would be recognised on Investment basis ?

    • 4

      Hello Sir

      It is in talks that government will change the criteria of MSME.

      But the official notification is still pending.

      Indeed the criteria will change once notification comes into place.

  3. 5
  4. 6

    A private limited company has purchased electric fittings from a retailer(who is neither a manufacturer nor a service provider), the payment due to him exceeds 45 days. supplier has taken registration in aadhar udyog. Whether such company will require to file MSME-1 because as per MSMED act, 2006 only manufacturer/producer and service providers are covered. will the scenario be changed if supplier has not obtained registration under aadhar udyog.

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    If a manufacturing company has branches and investment in each branch is less than 10 lks , can the company take an MSME registration for each branch or it has to take for the company?

  10. 13

    Can you please clarify on the Meaning of Due Date?
    Due Date is Counted from where? I mean to say that in case the supplier is giving the credit period of 90 Days Generally for the payment from the date of issue of invoices/receipt of goods.

    In that case according to me that the payment is outstanding beyond 45 days, as it is not due for payment. so whether the same is transaction o/s is to report in MSME-1?

    Further, in case there is no transaction during a particular 6 months lets say April-Sept. there are no transactions or say no amount is outstanding to MSME. Whether the company has to file the said return?

    Please clarify on the above issues.


  11. 14

    Dear Sir/Mam,

    In MEME FORM-1 We will take those suppliers out-stanading, who fall in MICRO & SMALL ONLY .

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    what if a company secretary just joined a company on 17th April, 2019 and company does not file the form upto 25th April, 2019, still that CS will be in the criteria of non-compliance or not?

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