Summary: Form MSME-1 is a half-yearly compliance return prescribed by the Ministry of Corporate Affairs (MCA) under Section 405 of the Companies Act, 2013, for specified companies dealing with Micro and Small Enterprise suppliers. The filing requirement is governed by the Specified Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2019, as amended in 2024. Companies must examine payments outstanding beyond 45 days from the date of acceptance or deemed acceptance of goods or services, along with delayed payments covered by the revised reporting requirements. The return is ordinarily filed for the April–September period by 31 October and for the October–March period by 30 April. Accordingly, the prescribed due date for the April–September 2026 return is 31 October 2026, subject to any applicable MCA extension. The underlying payment obligations arise under Section 15 of the Micro, Small and Medium Enterprises Development Act, 2006. Where a written agreement exists, the agreed payment period cannot exceed 45 days; where no written agreement exists, the statutory timeline applies. Companies should verify suppliers’ enterprise classification, maintain invoice-wise records, identify delayed payments and reconcile outstanding balances before filing. The revised MSME-1 form also requires attention to payments made after the prescribed period. Failure to comply with directions under Section 405, or furnishing materially incorrect or incomplete information, may attract penalties under Section 405(4). Delayed payments may separately attract interest under Section 16 of the MSMED Act. Effective compliance therefore requires both timely payment monitoring and accurate half-yearly reporting.
Introduction
Timely payment to Micro and Small Enterprises is an important compliance requirement for companies in India. To monitor delays in payments to these enterprises, the Ministry of Corporate Affairs (MCA) introduced Form MSME-1 under Section 405 of the Companies Act, 2013.
Form MSME-1 is a half-yearly return through which specified companies report information about payments due to Micro and Small Enterprise suppliers beyond the prescribed period. Companies should understand its applicability, filing deadlines and reporting requirements to avoid non-compliance.
Applicability of Form MSME-1
Form MSME-1 is applicable to specified companies that have 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.
The requirement is governed by the Specified Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2019, issued under Section 405 of the Companies Act, 2013, as amended in 2024.
Companies should verify the MSME status of their suppliers and review outstanding invoices before determining whether the filing requirement applies. Suppliers classified only as Medium Enterprises are not covered by this particular reporting requirement.
What Is the 45-Day Payment Rule?
Section 15 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, requires buyers to make payments to Micro and Small Enterprises within the prescribed period.
Where there is a written agreement, the payment period cannot exceed 45 days from the date of acceptance or deemed acceptance of goods or services. Where there is no written agreement, the statutory payment timeline applies.
For example, if a company receives and accepts goods from a Micro Enterprise but does not make payment within the prescribed period, it should examine whether the outstanding amount is reportable in Form MSME-1.
Companies should maintain proper records of invoices, acceptance dates and payments to identify delays accurately.
Due Dates for Filing Form MSME-1
Form MSME-1 is required to be filed twice during a financial year, wherever applicable.
| Reporting period | Due date |
|---|---|
| April to September | 31st October |
| October to March | 30th April |
Accordingly, the due date for filing Form MSME-1 for the period April to September 2026 is 31st October 2026, subject to any extension notified by the MCA.
Companies should review their vendor balances and complete the necessary reconciliation well before the due date.
Information Required and Filing Process
Form MSME-1 requires company identification details and information relating to reportable payments to Micro and Small Enterprise suppliers. Depending on the applicable fields, this may include the company’s CIN, registered office details, supplier information, outstanding amounts and reasons for delay.
The revised form introduced in July 2024 also addresses amounts paid after the prescribed 45-day period. Companies should therefore refer to the latest MCA form and instructions before filing.
The general filing process involves:
1. Identifying suppliers covered under the applicable requirements.
2. Reviewing outstanding invoices and payment records.
3. Preparing the required supplier-wise information.
4. Completing the applicable form on the MCA portal.
5. Submitting the form with the prescribed authentication and retaining the acknowledgement.
Penalties for Non-Compliance
Section 405(4) of the Companies Act, 2013 provides for penalties for failure to comply with a direction issued under Section 405 or for furnishing materially incorrect or incomplete information.
The provision specifies a penalty of ₹ 20,000/- for the company and every officer in default. For a continuing failure, an additional penalty of ₹ 1,000/- per day may apply, subject to a maximum of ₹ 3 lakh.
Separately, delayed payments may attract interest under Section 16 of the MSMED Act, 2006, where applicable. Companies should therefore treat payment timelines and MSME reporting as important parts of their regular compliance process.
Conclusion
Form MSME-1 is an important compliance requirement for companies having reportable delayed payments to Micro and Small Enterprise suppliers. Timely filing depends on accurate supplier records, proper monitoring of payment timelines and regular reconciliation of outstanding balances.
Companies should review their vendor payments periodically and follow the latest MCA requirements to avoid filing defaults and related consequences.
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Disclaimer: The content of this article is intended to provide a general guide to the subject matter, Specialist advice should be sought about your specific circumstances.
