Major changes have been made by the Ministry of Corporate Affairs in the context of protecting the interest of the small group of companies or businesses. Ministry of Corporate Affairs (MCA) has laid emphasis on all the problems faced by all Specified Companies Whether Public or Private Company, Micro or Small.
What is MSME Form 1 ?
The MSME Form 1 is to provide information on a half-yearly basis in the context of the outstanding payments to Micro or Small Enterprises for a period exceeding 45 days with the Registrar of Companies (ROC).
Every specified company have to file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification.
Every specified company have to file a return as per MSME-1, by 31st October for the period from April to September and by 30th April for the period from October to March.
Company 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 for the delay;
Key terms used and there meaning
1. Specified Companies
2. Micro & Small Enterprises
3. Day of Acceptance
4. Day of Deemed Acceptance
- Specified Companies
In Specified companies comes all those companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers surpassed forty-five days from the date of undertaking or the date of deemed undertaking of the goods or services (Section 9 of the Micro, Small and Medium Enterprises Development Act,2006).
- Micro & Small Enterprises
In this comes any class or classes of enterprises (including companies, Partnership firm, Association of Person, Hindu Undivided Family, Co-operative Society, and Proprietorship Firm, other entities, etc.)
- Day of Acceptance means:
(a) The day of the actual delivery of goods or services provided
(b) Where any disapproval is made in writing by the buyer regarding the compliance of goods or services within fifteen days from the day of the delivery of goods or the services provided, the day on which such objection is removed by the supplier.
- Day of Deemed Acceptance
Means a day of the actual delivery of goods or the services provided, where no objection is made in writing by the buyer regarding the acceptance of goods or services within fifteen days from the day of the delivery of goods or the services provided.
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Important things Required In MSME-1:
- Name of supplier
- PAN of supplier
- Amount due against the supplies of goods or services
- Date from which the amount is due
- Reason of delay in payment of the amount due
Procedure
- Firstly company have to identify there MSME registered suppliers and ask for their registration certificate.
- After that 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 that particular suppliers have to be mentioned in Form MSME-1.
Consequences for Non-Filing
Companies and each officer will be punishable with imprisonment for a term which may reach six months or with fine of twenty-five thousand rupees but which can reach three lakh rupees, or with both If any company fails to file MSME-1 within 30 days or knowingly manipulate the information or statistics of the company.
The Criterion for filing MSME I form (MCA) by those specified companies whose overdue payment to MSMEs suppliers is exceeding 45 days, is being discussed below:
MSME Form 1 Due Date (Initial Return)
The government has declared the MSME form 1 maturity till 30th May 2020 for all eligible companies. The department earlier said that the maturity for companies to file the shape are going to be 30 days from when it’s uploaded on the official website.
MSME Form 1 maturity (Half Yearly Return)
Form MSME I (half-yearly return) has to be filed within 45 days from the top of every half-year in respect of overdue payments to Micro or Small Enterprise i.e. 30th April 2021 (for October 2020 to March 2021) 31st October 2021 (April 2021 to September 2021).
Micro, Small and Medium Enterprise (MSME) Broadly Classified Into 2 Categories
1) Manufacturing and Production of Goods Enterprises
Manufacturing Enterprises –First schedule of Industries (Development and Regulation) Act, 1951, manufacturing enterprises are defined in terms of investment in Plant & Machinery, Engagement in the manufacture or production of goods for any Particular industry.
2) Rendering Services Enterprises
Service Enterprises are defined in terms of investment in equipment, service enterprises are those enterprises that are engaged in providing or rendering services
In MSMED Act 2006, Micro Small & Medium Enterprises (MSMEs) are categorized and defined on the basis of capital investment done in plant and machinery but excluding the investments made in land and building.
Ministry of Corporate Affairs (MCA) has issued a notification stating that it has been mandated to file disclosures through Form MSME I for every type of the Company – Public or Private Company, Micro or Small Companies; the Company must satisfy the following conditions :-
- Goods and/or Services received from Micro or Small Enterprise.
- Payment overdue, to Micro and Small Enterprise for 46 days from the date of acceptance.Step by Step Procedure to File MCA MSME Form 1
Important details of the form:
Company details such as Corporate identity number, global location number, and the PAN
Particular name of Suppliers and payments due
Reason of Delay in the due and Attachments
MSME Form 1 Declaration
Who should not file the form? (Exemption to this rule)
• Rule is applicable only to Specified Companies whose payment to MSMEs suppliers exceed 45 days from the date of acceptance or deemed acceptance of the goods or services as per the provisions under section 9 of the MSME Development Act, 2006.
• Payment against the supplier exceeds 45 days but the supplier/Creditors have to give initially a declaration that they do not fell under the category of Micro or Small Enterprises.
Notes
- Only registered enterprises and having valid MSME certificate shall be considered and Udyog Aadhar is also considered as MSME registration.
- MSME-1 is not applicable to Medium Enterprises.
- Date of deemed delivery refers to the acceptance of goods and services by the buyer in written with no objection with the product or services received within the 15 days time period.
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