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cs-kanika-goelMCA Form MSME-1- Specified Companies (Furnishing of Information about payment to Micro & Small Enterprises Supplies) Order, 2019

In my current article, I will enlighten my friends about urgent secretarial compliance of filing MCA Form MSME-1.

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” as per section 405 of The Companies Act, 2013), 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;

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

Thus, in a nutshell

Every Company which has received goods or services from Micro & Small Enterprise

AND

Payment is due/ not paid to such enterprise for 46 days from date of acceptance

shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order (i.e. 22nd January 2019) within thirty days from the date of publication of this notification – Means the Due date for First Return is 21st Feb, 2019.

Due Date for filing Form MSME-1

> One time return or transitional return is required to be filed within 30 days of publication of this order i.e. 21stFebruary, 2019.

> 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

Procedure

1) Firstly identify your MSME registered suppliers and ask for 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 details of such suppliers shall be furnished in Form MSME-1

3) Information required in respect of such supplier to be submitted with ROC in Form MSME-1

> Total outstanding amount due on 22nd January 2019 [For One time return, which has to be submitted by 21stFebruary 2019]

> Name of Supplier

> PAN of Supplier

> Date from which such amount is due

4. Reasons for delay in payment

Definitions as per Micro, Small & Medium Enterprises Development (MSMED) Act, 2006

Meaning of Micro & Small Enterprise

In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro & Small Enterprises are depicted below:

Manufacturing Sector Service Sector
Enterprises Investment in plant & machinery Enterprises Investment in equipment
Micro Enterprises Does not exceed Rs. 25 Lakh Micro Enterprises Does not exceed Rs. 10 Lakh
Small Enterprises More than Rs. 25 Lakh but does not exceed Rs. 5 Crore Small Enterprises More than Rs. 10 Lakh but does not exceed Rs. 2 Crore

It covers companies, Partnership firm, Association of Person, Hindu Undivided family, Co-operative Society, Proprietorship Firm, other entities etc.

Definition of the Day of Acceptance:

Explanation (i) to Section 2(b) of the Act provides that day of acceptance means:

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

(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

Definition of the Day of Deemed Acceptance:

Explanation (ii) to Section 2(b) of the Act provides that day of acceptance means the day of the actual delivery of goods or the rendering of services, 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.

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. 25000 upto Rs. 300000 per person

Exemption to this Rule:

1. Form MSME-1 is not applicable in the case of Medium Enterprises;

Particulars

 

 Manufacturing Sector  (Investment in plant & machinery) Service Sector  (Investment in equipment)
Medium Enterprises More than Rs. 5 Crore but does not exceed Rs. 10 Crore More than Rs. 2 Crore but does not exceed Rs. 5 Crore

2. This Rule applicable only for those Specified Companies whose payment to Micro & Small Enterprises exceed 45 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 MSME Development Act, 2006;

3. If payment Exceed 45 days but supplier/Creditors given a declaration that they do not fall under Micro or small Enterprises.

Note: all efforts have been made to provide you comprehensive knowledge about the form and its application. In case, you need any professional assistance; drop us an email or give a call.

We, at prudent adviso services, provide companies filing services at reasonable fee. Feel free to contact Monika Goel @ 9999596103 (kindly whatsapp in case of network issue) or mail me at prudentadviso@gmail.com 

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15 Comments

  1. ASHU JAIN says:

    If any company has outstanding due to MSME on the date 22nd jan 2019 but not more than 45 DAYS is the requirement of filing Inital return under MSME Form no1 exist or not?
    Also, Please let us know about the optional attachment of MSME form 1

  2. Ashish says:

    As a company if I made Payment to MSME after 45 Day and before due date of Filling MSME 1, Can whether it will be applicable to fill MSME 1.

  3. K.L.S.Prasanna says:

    Dear sir/ mam
    i have a doubt regarding msme form 1, if in any time during the period between 1st april 2019 to sep 2019, if any amount is outstanding to msme for more than 45 days suppliers but the same is repaid before sep 2019 then do we need to file the form 1

  4. Manjula says:

    Hi
    I have doubt regarding MSME Form I, whether it will be applicable for companies who does not have amount due to supplier.
    When the form will be released by MCA .

    1. LINCOLN FRANCIS FERNANDEZ says:

      Mam..We are service oriented company.. turnover of Rs.1.75crore ..we dont have any suppliers register with MSME.. i want ot know that .. is we need to file MSME 1.. please advice

  5. GANESH NIKAM says:

    Hello,

    This Form MSME 1 is still not released. (not appearing on MCA portal. Due date for same is 22nd February. Kindly update form on Portal.

  6. Padmanabhan Venkata Subramanian says:

    Hi,
    MCA may make the form available on its portal any day now and then may extend the due date of filing the initial return beyond 22.02.2019. If this does not happen, the Form MSME-1 may be filled in manually and e-filed with the RoC as an attachment to Form GNL-2 to avoid any penal action arising due to delayed filing or non-filing..

    1. CS RAJKISHORE RAM says:

      you may face problem just like ADT-1,which is earlier filed through GNL-2 and now create a problem in filing INC-22A
      mca does not up date the auditor details in E form INC-22A

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