Summary: Companies preparing the April–September 2026 MSME Form 1 return must identify suppliers qualifying as micro or small enterprises, determine the legally relevant acceptance date, and test whether payments have remained pending beyond 45 days. The statutory due date under the 2019 MCA Order is 31 October 2026. The 15 July 2024 amendment narrowed the filing trigger to specified companies with overdue pending payments but simultaneously substituted a more detailed form that requests information about payments made within and after 45 days and balances still outstanding. This distinction calls for careful reconciliation rather than an assumption that every company dealing with an MSME must file. The exercise also affects interest exposure under the MSMED Act, FY 2025–26 tax deductions, vendor controls and financial-statement disclosures. This article explains the operative tests, borderline cases and evidence required for defensible reporting.

Why the 31 October 2026 filing matters

For the six-month period from 1 April to 30 September 2026, the Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019 fixes 31 October as the date for furnishing the half-yearly MSME Form 1 return. The order was issued by the Ministry of Corporate Affairs under section 405 of the Companies Act, 2013. It is not a general return for every business: the filing obligation concerns companies that receive goods or services from qualifying micro or small suppliers and meet the delayed-payment trigger. A partnership, sole proprietorship or LLP is not itself required to file this MCA company form merely because it purchases from such suppliers, although separate MSMED Act duties may still apply.

The current review should start with an invoice-level ageing report, not a vendor-master list alone. A company with 200 micro and small suppliers and no relevant overdue payment is in a different position from a company with a single qualifying supplier whose invoice has crossed the statutory threshold. The former should document why the filing trigger is absent; the latter should assess the filing and disclosure obligation even if the amount is commercially small. This is a compliance test, not a materiality threshold determined by management.

Which suppliers qualify as micro or small enterprises?

The current classification effective 1 April 2025 uses a composite investment-and-turnover test. A micro enterprise has investment in plant and machinery or equipment not exceeding ₹2.5 crore AND annual turnover not exceeding ₹10 crore. A small enterprise has investment not exceeding ₹25 crore AND turnover not exceeding ₹100 crore, while not falling within the micro category. Both manufacturing and service enterprises can qualify. A medium enterprise may have investment up to ₹125 crore and turnover up to ₹500 crore, but medium enterprises are outside the specific micro-and-small supplier category relevant to MSME Form 1. The classification must be checked for the relevant period, rather than inferred from a supplier’s trade name.

The official Udyam registration record is a useful primary control because it identifies the enterprise and its current classification. Finance teams should obtain the Udyam number and supporting registration evidence, reconcile the supplier PAN and legal name, and examine whether the supply is within the protected supplier category. Registration and classification timing can matter where a vendor registers or changes category during a contract. Do not automatically treat every seller described as an “MSME” in an invoice footer as a qualifying micro or small supplier; equally, do not exclude a legitimate small service provider merely because its annual purchases are modest.

Why medium enterprises and traders need separate attention

The 2026 form is aimed at micro and small suppliers, not the whole MSME population. A supplier classified as medium is not brought into the return merely because the broader expression “MSME” is used in purchase orders. The statutory definition of “supplier” under the MSMED Act, 2006 and the nature of the vendor’s activity should also be considered. A pure trading entity may have an Udyam registration for administrative benefits, but that alone should not be treated as conclusively establishing all delayed-payment protections. Where classification or activity is disputed, retain a reasoned file note and obtain a professional review before omitting a material vendor.

How the 15-day and 45-day clocks operate

Section 15 of the Micro, Small and Medium Enterprises Development Act, 2006 creates two distinct payment rules. Where the buyer and supplier have agreed a payment date in writing, payment is due by that agreed date, but the agreement cannot extend beyond 45 days from the day of acceptance or deemed acceptance. Where no written payment period exists, payment must be made before the “appointed day”, which is the day immediately after expiry of 15 days from acceptance or deemed acceptance. Therefore, “45 days” is a statutory outer limit, not an automatic 45-day free-credit period for every invoice. A written 20-day term can become overdue well before day 45.

Acceptance generally follows delivery of goods or rendering of services. If the buyer raises a written objection within 15 days concerning acceptance, the statutory definition of the day of acceptance looks to the date on which the supplier removes that objection; absent such a written objection, deemed acceptance ordinarily tracks actual delivery or service rendering. Invoice date, accounting entry date, purchase-order approval and goods-receipt date can differ. The company should preserve delivery notes, service completion confirmations, objections and resolution correspondence to establish the correct starting point rather than mechanically counting from the invoice date.

Two different questions must not be confused

First, has the buyer breached the payment obligation under section 15, which may occur after 15 days or an agreed shorter term? Second, does the company meet the specific more-than-45-day pending-payment condition for MCA Form 1? The answers need not be identical. A payment made 30 days after delivery without any written payment agreement may have consequences under the MSMED Act even though it has not crossed the MCA return’s 45-day trigger. The MSME delayed-payment provisions and the company reporting order should therefore be tested separately.

What changed in the 15 July 2024 MCA amendment?

MCA Notification S.O. 2751(E) dated 15 July 2024 inserted a proviso into paragraph 3 of the 2019 Order. In substance, only specified companies having payments pending to a micro or small enterprise for more than 45 days from acceptance or deemed acceptance are required to furnish MSME Form 1. The 2024 amendment and its substituted form also introduced more detailed transaction reporting. The substituted form asks for amounts paid within 45 days, including through the Trade Receivables Discounting System (TReDS) and other modes, amounts paid after 45 days, amounts outstanding for 45 days or less, amounts outstanding for more than 45 days, and reasons for delayed or unpaid amounts.

There is an important interpretative distinction between the trigger for filing and the information requested after filing becomes applicable. The proviso refers to payments “pending” for more than 45 days; the form note also asks for amounts “liquidated after 45 days”. A company that paid every delayed invoice before the half-year closing date but had overdue items during the period faces a question that should be assessed against the exact proviso, the form instruction kit and available MCA guidance. It is not appropriate to claim that the form’s broader data fields automatically repeal the express filing trigger. Equally, it would be unsafe to ignore delayed payments merely because they have been cleared before the return is prepared. The scope of reporting payments within 45 days has generated differing professional readings; document the adopted position and the facts.

A practical filing-decision matrix

Preparing the vendor-wise data and revised form

The company should prepare a reconciliation from the general ledger, accounts payable sub-ledger, purchase register, supplier confirmations and bank payments. For each qualifying vendor, record its name, PAN, Udyam evidence, invoice and supply date, date of acceptance, written credit terms, amount including the relevant tax component where applicable, date and mode of payment, ageing at each month-end, and the balance at 30 September 2026. The revised MSME Form I format separates paid-within-45-day transactions through TReDS and other modes, payments after 45 days, and outstanding balances in two ageing bands. A TReDS entry should be supported by platform settlement evidence, not simply by the company’s intent to discount a bill.

Use a stable cut-off and reconcile credits, debit notes, advances, disputed invoices and part-payments. If an invoice of ₹1,00,000 has a genuine, supported credit note of ₹20,000, the payable balance differs from the original invoice face value. If ₹40,000 has been paid, age the unpaid balance separately while retaining the original acceptance date and allocation evidence. Do not net balances of unrelated suppliers or different legal entities merely to reduce reported arrears. For a company with multiple GST registrations under one corporate identity, consolidate the legal company’s payable population appropriately before filing the company-level return.

Financial reporting, interest and income-tax consequences

The MSMED Act imposes consequences independent of MCA filing. Under section 16, a buyer that misses the applicable section 15 payment deadline can become liable to compound interest with monthly rests at three times the RBI-notified bank rate. That rate is linked to the bank rate prevailing for the relevant period; it is not a fixed 18% or 24% statutory rate. Section 22 requires specified disclosures in annual accounts of buyers whose accounts are audited under applicable law, including unpaid principal, interest paid, interest due and amounts carried forward. Section 23 disallows deduction of the interest payable under the MSMED Act for income-tax purposes. The MSME dues disclosure framework should be reconciled with the trial balance and audit workpapers.

For FY 2025–26 relevant to AY 2026–27, section 43B(h) of the Income-tax Act, 1961 requires an otherwise deductible sum payable to a micro or small enterprise beyond the section 15 limit to be allowed only in the year of actual payment. Unlike most section 43B items, the general return-filing-date relaxation does not apply to clause (h). The Ministry of Finance has explained the corresponding rule in section 37(2)(g) of the Income Tax Act, 2025 for the new-law period. The Finance Ministry clarification on the 45-day MSME payment rule is relevant when comparing FY 2025–26 tax-audit adjustments with transactions arising after 1 April 2026. The MCA half-yearly return and the income-tax deduction test should be reconciled but should not be treated as identical tests.

Penalty exposure and controls before 31 October

Section 405(4) of the Companies Act, 2013 provides a monetary penalty for a company and officers in default for failing to furnish required information or furnishing materially incorrect or incomplete information. The provision includes a base penalty of ₹20,000 and a further ₹1,000 per day for a continuing default, subject to the statutory maximum of ₹3 lakh; application to each person and any relief for eligible small companies must be examined on the actual facts. A reported ROC adjudication concerning MSME Form 1 non-compliance illustrates why a nil statutory filing fee does not mean there is no regulatory risk. The better control is a documented vendor-status and overdue-payment review, approved by finance and secretarial teams before submission.

A workable October process is to freeze the supplier population on 10 October, complete Udyam and acceptance-date checks by 16 October, reconcile payment modes and part-settlements by 22 October, have finance review the form trigger and tax impact by 26 October, and submit with a valid digital signature well before 31 October. These are suggested internal checkpoints, not statutory dates. Retain the uploaded data, approval note, acknowledgement/SRN and working papers for future ROC enquiries and audit review.

Frequently Asked Questions

1. Is 31 October 2026 the MSME Form 1 due date?

Yes. Paragraph 3 of the 2019 MCA Order specifies 31 October for the April–September half-year. The period covered here is 1 April to 30 September 2026.

2. Does every private company with an MSME vendor file the form?

No. The relevant suppliers are micro and small enterprises, and the 2024 amendment links filing to the prescribed pending-payment condition. A company should verify the trigger, not file merely because it has any MSME vendor.

3. Is the 45-day period always the lawful credit period?

No. Without a written agreement the MSMED Act generally requires payment before the appointed day after 15 days. A written agreed period can be shorter than 45 days and cannot exceed 45 days.

4. Does a late-paid invoice need to be tracked if nothing remains unpaid?

Yes, it must be tracked. The revised form has a field for payments made after 45 days, although the proviso governing the filing trigger refers to pending payments. Review both texts and record the position adopted for the particular period.

5. Are medium enterprises included in the return?

No. The Order identifies micro and small enterprise suppliers. Medium classification alone does not meet that supplier category.

6. Is MSME Form 1 the same as section 43B(h) reporting?

No. MSME Form 1 is a company-law half-yearly disclosure. Section 43B(h) addresses timing of income-tax deduction for specified delayed micro/small enterprise payments in the relevant FY/AY.

7. Can the company ignore the form because the overdue amount is immaterial?

No general rupee-value exemption appears in the filing trigger. The company must assess the statutory supplier and overdue conditions, even for a comparatively small balance.

Key Takeaways

The half-yearly return for April–September 2026 is due on 31 October 2026 where the statutory filing trigger applies. Verify supplier status using current micro/small classification, distinguish the section 15 payment deadline from the 45-day MCA filing trigger, and reconcile the 2024 form fields with the proviso. Preserve an audit trail for overdue amounts, settled-after-45-day items, interest, income-tax adjustments and the final filing decision.

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Disclaimer: This article is for general educational and editorial information as at 10 October 2026 and is not company-secretarial, legal, tax, accounting or audit advice. Applicability depends on the legal status and classification of each supplier, contract terms, acceptance or deemed-acceptance facts, the precise period of overdue payment, the operative MCA form and subsequent official clarification. The treatment of invoices paid after 45 days but no longer pending requires particular attention to the 2024 proviso and substituted form, and readers should not treat the discussion as a binding resolution of interpretative questions. Companies should verify the current MCA portal instructions, Companies Act, MSMED Act, Income-tax provisions, applicable notifications and professional advice before filing or claiming deductions. Illustrations are simplified and do not calculate actual statutory interest or penalties. TaxGuru, its owners, management, editors, authors, employees and associated persons accept no responsibility or liability for any loss, tax demand, penalty, interest, compliance failure, dispute, decision or action arising from reliance on this article.