Legal Provision:
According to Orders 2 and 3 dated 22nd January 2019 of Companies (Furnishing of information about the payment to micro and small enterprise suppliers) Order 2019 issued under the power conferred under Section 405 of the Companies Act, 2013 (“Act”) read with Section 15 of the MSME Development Act, 2006, the provisions for filing the form MSME-1 was notified.
MSME Development Act, 2006 (“MSMED Act”)
According to Section 15 of the MSMED Act, any supplier who renders services or supplies any goods to the buyer, then the buyer has to make the payment on or before the agreed date between them and if there is no agreed date between the parties then the buyer must make payment before the appointed date which shall not be later than 15 days from the date of acceptance of the goods or services.
The period of credit granted by the seller shall not exceed 45 days from the date of acceptance or deemed acceptance of the goods or services in any way including the agreement between the buyer and the supplier.
Who shall file Form MSME-1?
All companies must file Form MSME-1 (Form) which has either defaulted in making payment or has made delayed payment to their micro and small vendors.
Purpose of the Form
The form is filed with the Registrar of Companies to intimate about the default the company has made in making payments to its small vendors.
Note: In case of delay in making payment means, payment is made after 45 days.
Timeline for filing the Form
There are two half-yearly returns that need to be filed by the companies’ i.e.-
- For April to September, the due date for filing the form is 31st October.
- For the period October to March, the due date for filing the form is 30th April.
Exemption
Medium Enterprises are not required to file the form.
Penalty for Non-Filing of the Form
Non-Compliance with the provisions of the acts and orders shall lead to punishment and penalty specified under Section 405(4) of the Act.
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