FAQ’s on MCA Form MSME-1

MCA introduced Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order 2019 on 22^nd 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 22^nd 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

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:

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:

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

As per Section 405(4)

• If any company fails to comply with the requirement of filing Form MSME-1, the company and every officer of the company who is in default shall be liable to a penalty of twenty thousand rupees
• and in case of continuing failure, with a further penalty of one thousand rupees for each day after the first during which such failure continues, subject to a maximum of three lakh rupees.

That means in the case of Non-filing of Form MSME-1:

• The penalty of twenty thousand rupees &
• a further penalty of one thousand rupees for each day

can be levied.

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