This article is regarding to ‘Micro and Small Enterprise Suppliers’ notified as MCA notification on date 22nd January 2019 “Specified Companies (Furnishing of Information about payment to micro and small enterprise suppliers) Order, 2019”

Act Reference

e-Form MSME FORM I is required to be filed pursuant to Order dated 22 January, 2019 issued under Section 405 of the Companies Act, 2013 and which are reproduced for your reference:

Applicability

1. Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019, 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”), 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;

2. Every specified company 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 within thirty days from the date of publication of this notification.

3. Every specified company shall file a return as per MSME Form I annexed to this Order, by 31st October for the period from April to September and by 30th April for the period from October to March.

Analysis’

1.Specified companies means

(i) All companies, who get supplies of goods or services from micro and small enterprises and

(ii) whose payments to micro and small enterprise suppliers exceed 45 days from the date of acceptance or the date of deemed acceptance of the goods or services, shall submit a return eform MSME FORM I to the MCA in the interval mentioned below

a. Initial return or

b. Regular half yearly return

2. Micro, Small and Medium (MSME) Enterprises means

In accordance with Micro, Small and Medium Enterprises Development Act, 2006, the manufacture and service enterprise is defined in terms of investment in plant & machinery and services respectively as micro, small and medium enterprise as explained below:

Micro Small Medium
Manufacturing Enterprises Up to Rs. 25 lacs More than Rs. 25 lacs but up to Rs. 5 crores More than Rs. 5 crores but upto Rs. 10 crores
Service Enterprises Up to Rs. 10 lacs More than Rs. 10 lacs but up to Rs. 2 crores More than Rs. 2 crores but up to Rs. 5 crores

Note: only Micro and Small Enterprise Suppliers are considered. Medium Enterprise suppliers are not considered as per the notification. Trading enterprises are not covered under MSME Act

3.“date of acceptance” means

In accordance with MSME Act, 2006, “the day of acceptance” means-

  • the day of the actual delivery of goods or the rendering of services; or
  • 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.

4.“date of deemed acceptance” means

In accordance with MSME Act, 2006, “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.

5. Due date for filing eform MSME  FORM  I

a. Initial Return: Every specified company shall file in e-form MSME Form 1 details of all outstanding duesto Micro and Small enterprise suppliers existing on the date of notification of this order within 30 days from the date of publication (22.01.2019) of this notification.

As per MCA General Circular No.01/2019 dated 21.02.2019 the due date extended for filing of initial return. i.e. from the  date of deployment of e-form on MCA portal. The e-form MSME FORM I available from 01.05.2019 and due date for filing initial return is 30 days from 01.05.2019. i.e. 30th May of 2019

b. Half yearly return: Every specified company shall file a half yearly return in e-from MSME Form I as:  

Filing Period Due date of Filing
From April to September 31st October
From October to March 30th April

Note: Since e-form MSME FORM I available from 01.05.2019, the due date for Half yearly return – October 2018 to March 2019, may be consider as 30th May of 2019

6.Details to be furnished in e-form MSME FORM I

a. Initial Return:

(i) PAN of the Company

(ii) Email Id of the Company

(iii) Total outstanding amount due as on date of notification of order (22.01.2019)

(iv) Particulars of the name of suppliers and amount of payments due (number of entries to be specified subject to maximum 99 rows)

-For each supplier the following details to be furnished

(A) FY from

(B) FY to

(C) Name of the Supplier

(D) PAN of the Supplier

(E) Amount due

(F) Specify the date from which amount due

(v) Reasons for Delay in amount of payments due (para)

(vi) Optional attachment if any

b. Regular half yearly return :

(i) Period (Apr to Sep or Oct to March)

(ii) PAN of the Company

(iii) Email Id of the Company

(iv) Total outstanding amount due for the respective period

(v) Particulars of the name of suppliers and amount of payments due (number of entries to be specified subject to maximum 99 rows)

-For each supplier the following details to be furnished

(G) FY from

(H) FY to

(I) Name of the Supplier

(J) PAN of the Supplier

(K) Amount due

(L) Specify the date from which amount due

(vi) Reasons for Delay in amount of payments due (para)

(vii) Optional attachment if any

The e-form MSME FORM I to be digitally signed by the following authorised persons of the company

(i) Director or

(ii) Manager or

(iii) Company Secretary or

(iv) CEO or

(v) CFO

For director, DIN details to be given. For Manager, Company Secretary, CEO or CFO PAN details to be given.

7. Penal Prosecutions

Section 405(4) of the Companies Act, 2013 is reproduced below

If any company fails to comply with an order made under sub-section (1) or subsection (3), or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect,

Particulars Penalty
On defaulting company Extended Up to  Rs. 25,000/-
Every Officer who is in default Minimum Fine Rs. 25,000/- which may extended to Rs. 3,00,000/-

Or

Imprisonment which may extended to 6 Months or Both

Disclaimer: All Readers are advised to refer relevant provision of law before applying or accepting any of the point mentioned above or not. Author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the contents of this write up.

(The author is Chartered Accountant in Practice and reached at rajasekar@ggaca.in , Cell No. +91 99942 89478)

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9 Comments

  1. Gaurav Bhatt says:

    if buyer purchased goods from MSME on 1st April and paid on 2nd June. Does Buyer need to show this in MSME-1 for the month OCT.

    please advise.

  2. KUSUM KHURANA says:

    I have a question in initial return whether

    All dues to msme vendors will be given irrespective of fact whether exceeding 45 days or not
    or
    Dues exceeding only 45 days
    can you please clarify

  3. Avinash says:

    Hi. If a MSME registered service provider / consultant raises a invoice for 6 months in advance, will it be considered to be pending Payments to MSME. The service in question will be provide from April 19 to Sep 19 and bill is raised for 6 months in April19 itself. The completion of service as per the bill is on 30th Sep 19. There is no due date mentioned on the invoice, Please suggest and clarify.

    1. KUSUM KHURANA says:

      My view is to clear the due date from the service vendor itself & it must be in written form and calculate 45 days accordingly ( due date may be 01.04.2019 or 30.09.2019 or any other date mutually decided by both parties)

  4. Deepika Arora says:

    Hi,
    We have received registration certificates (Udyog Adhar Memorandum i.e. UAM) from our vendors. These UAM belongs to year 2015 and 2016. If these vendors have increased there investments but have not updated there UAM, please advise: 1. Whether reporting of those vendors is required in MSME Form I? 2. Can we ask for CA certificate and there latest balance sheet to know there investment value? 3. If through latest balance sheet we find that there is a increase in the investment value but they have not updated there UAM, whether there reporting is required in the MSME Form I? Thanks is advance for your help.

    1. KUSUM KHURANA says:

      You may take along with MSME Certificate , a declaration on the letterhead of the party duly signed & stamped that The party is MSME ( micro or small scale as the case may be ) on the date of giving declaration.

  5. Chandrashekhar B. PRabhumirashi says:

    I have one query about the applicability.

    One of clients a Private Limited Company which has not purchased anything from MSME Sectors during the Financial Year 2017-18 & 2018-19, even then whether this company is required to file this form to MCA?

    Can you please clarify?

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