Article explains Definition of MSME As per MSME Development (MSMED) Act, 2006, Applicability of MSME Form 1 to Companies registered under Companies Law, Compliance related Half Yearly Submission of MSME Form 1 and Penalty under section 405(4) of the Companies Act 2013 for delay in filing of MSME Form 1.
As per MCA Notification S.O. 368(E) dated 22.01.2019
| S.No. | Basis | Particulars | ||
| 1. | Definition of MSME
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As per MSME Development (MSMED) Act, 2006 definition is classified in following two parts: | ||
| Enterprise | Manufacturing Sector (Investment in Plant & Machinery) | Service Sector (Investment in Equipments) | ||
| Micro | Doesn’t Exceed Rs.25 Lacs | Doesn’t Exceed Rs.10 Lacs | ||
| Small | More than Rs. 25 Lacs but does not exceed Rs. 5 Cr | More than Rs. 10 Lacs but does not exceed Rs. 2 Cr | ||
| Medium | More than Rs. 5 Cr but does not exceed Rs. 10 Cr | More than Rs. 2 Cr but does not exceed Rs. 5 Cr | ||
| 2. | Applicability of MSME Form 1 | All companies,
– who get supplies of goods or services from micro and small enterprises and – 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. |
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| 3. | Compliance/ Submission of form | Last date for Half Yearly Form submission:
By 30th April- for period from October to March. By 31st October – for period from April to September. |
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| 4. | Details Required | Following are the requirements of Form 1 as stated in MCA notification:
1. the amount of payment due 2. reasons of the delay in case exceeds 45 days 3. Name and PAN of Suppliers 4. Specific date from which amount is due |
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| 5. | Penalty u/s 405(4) of the Companies Act 2013 | 1. The Buyer is liable to pay compound interest with monthly rests to the supplier from the appointed day at 3 times of the bank rate notifies by RBI.
As the Central Government has issued order of MSME Form 1 Under Section 405 of the Companies Act 2013 (Power of Central Government to direct companies to furnish information or statistics), therefore, in case of non-compliance with order following penalty as prescribed under Sub-section 4 of Section 405 of the Companies Act 2013 will become applicable. 2. 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, 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. |
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[Author – CS Charu Aggarwal, Charu A & Associates, Practising Company Secretary in Chandigarh and Delhi and provides varied array of services including Start-ups, Secretarial, Legal, Intellectual property, taxation, Audit, GST, Book keeping and other ancillary advisory service and can be reached at email id:- caggarwalpcs@gmail.com or +91 9877907702]
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