Ministry of Corporate Affairs (MCA) has introduced Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019 on 22nd January, 2019 which requires 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, shall submit a half yearly return to the Ministry of Corporate Affairs in e-Form MSME-1.

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

1. WHICH ARE THE SPECIFIED COMPANIES?

Every company which gets 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.

2. WHAT IS THE DATE OF ACCEPTANCE OR DEEMED ACCEPTANCE OF GOODS OR SERVICE?

“The day of acceptance” means-

(a) The day of the actual delivery of goods or the rendering of services;

(b) where any objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier;

The day of deemed acceptance” means, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services;

3. WHO IS A SUPPLIER? 

Section 2(n) of the MSME Act states Supplier means, a micro or small enterprise, which has filed a memorandum with the authority referred to in Section 8 (1) of the act and includes,-

  • National Small Industries Corporation, being a Company;
  • Small Industries Development Corporation of a State or a Union territory, being a Company; and
  • Any company co-operative society, trust or a body engaged in selling goods produced by micro or small enterprises or rendering services provided by such enterprises.

4. WHAT IS AN ENTERPRISE?

‘Manufacturing Enterprises’– the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951 or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use.

Link of First Schedule to the IDRA, 1951 – https://bit.ly/2ZMQWmo

‘Service Enterprises’– the enterprises engaged in providing or rendering of services of any kind.

5. WHAT ARE THE CRITERIA TO DETERMINR MICRO AND SMALL ENTERPRISE?

Manufacturing Sector Investment In Plant And Machinery Service Sector Investment In Equipment
Micro Enterprise Less than 25 Lakh Less than 10 Lakh
Small Enterprise 25 Lakh to 5 Crore 10 Lakh to 2 Crore

6. WHETHER THE DETAILS OF SUPPLIERS NOT REGISTERED UNDER MSME ACT IS REQUIRED TO BE GIVEN?

No, the details of suppliers not registered under MSME act is not required to be given.

7. IS THERE ANY MINIMUM AMOUNT OF MONEY OUTSTANDING TO BE PAID IS EXEMPTED FROM REPORTING?

No, even Rs. 50/- outstanding to be paid is required to be reported.

8. IF THE COMPANY HAS NO SUPPLIER WHOSE PAYMENT IS OUTSTANDING FOR MORE THAN 45 DAYS, THEN NIL RETURN IS REQUIRED TO BE FIED?

In that case, no return is required to be filed.

9. WHAT STEPS ARE REEQUIRED TO BE TAKEN BY THE SPECIFIED COMPANIES?

Firstly, as there is no way to find online, Specified Companies should ask their suppliers whether they are registered under MSME Act and ask for their Registration Certificate.

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.

10. WHICH ARE THE INFORMATION REQUIRED TO SUBMITTED IN MSME-I?

  • Total outstanding amount due
  • Name, PAN and amount due to every Supplier
  • Date from which amount is due
  • Reasons for delay in payment

11. WHAT ARE THE DUE DATES TO FILE THE FORM MSME-1?

For initial one-time return – 30th May, 2019. The details as on 22nd January, 2019 is required to be given.

For Half yearly return

Return Period Due Date
April to September 31st October
October to March 30th April.

12. IS THERE ANY REQUIREMENT OF PROFESSIONAL CERTIFICATION?

No professional certification is required in this form. Only one digital signature of Director/ KMP of the Company is required.

13. WHAT IS THE PENALTY FOR NON-FILING OF FORM MSME-1 ?

Non-compliance will lead to punishment and penalty under the provision of Section 405 (4) of the Companies Act, 2013 which states-

if any company fails to comply with an order or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect, the company shall be punishable with fine which may extend to twenty-five thousand rupees and every officer of the company who is in default, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees, or with both.

Disclaimer: The entire contents of this article have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.

Users of this information are expected to refer to the relevant existing provisions of applicable Laws. 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.

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16 Comments

  1. Gaurav Bhatt says:

    if a buyer purchased goods from SME on 1st April and paid on 2nd June. does he need to show this transaction in MSME 1 for the month of Oct.

  2. CA R C Bansal says:

    Do we also need to file half yearly return for half year ended 31st march’2019 ? If so what is the due date ? It cannot be 30th April because the Form MSME was deployed only on 1st May’19. At the most it can be 30th May for both Initial return as well as half yearly return period ended on 31.03.19 .

  3. Cs Pratik Makwana says:

    I agree with the answer of Chintan, because in the rule clearly mentioned that only specified companies are required to file Form MSME – 1.

  4. parmes chandak says:

    Is there any clarification by MCA that form MSME-1 is required to be submitted for giving information about Registered MSEs only. Because in the Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019 the word “Registered” is nowhere mentioned.

    1. Chandan Dowerah says:

      Further to the same query, is registration of micro or small enterprise mandatory? If registration not mandatory, whether any clarification given by Government for MCA Form MSME-1

    1. cs.chintan says:

      The rule read as only specified companies are required to file Form MSME – 1. If a company does not have any creditor outstanding for more than 45 days, it is not a specified company. Hence rule is not applicable.
      Views are personal interpretation.

      1. GUNJITA MOHTA says:

        IF DURING OCT TO MARCH THE PAYMENT WAS BEYOND 45 DAYS BUT ON 30 MARCH WE MADE THE PAYMENT WILL THE COMPANY BE LIABLE TO FILE MSME FORM ?

  5. Dhaval says:

    u have specified Nil return not to file form

    Is there any Rules or Notification as to not file a return if there is no Outstanding dues ??

    1. cs.chintan says:

      The rule read as only specified companies are required to file Form MSME – 1. If a company does not have any creditor outstanding for more than 45 days, it is not a specified company. Hence rule is not applicable

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