The Ministry of Micro, Small and Medium Enterprises, broadly known as MSME, or Small Scale Industries(SSI) is the premier Government body that deals with the formulations and management of rules, guidelines, and laws pertaining to small scale industries in India. The MSME came to effect on October 02, 2006. It aims to incentivize, facilitate, and boost the competitiveness of MSMEs working pan India.
The term “MSME” denotes all the companies that are registered under the MSMED Act 2006. Further, the term “Companies” includes Sole Proprietorship, HUF (Hindu Undivided Family), Partnership Firm, Co-operative Society, and Limited Company, etc.
Earlier, the MSME sector was bifurcated in 2 parts, i.e., Manufacturing Sector and Service Sector. However, after the announcement of amendment in the MSMED Act 2006 made by our Finance Minister on 13.05.2020, the distinction between both the sectors has been eliminated.
Further, in the same meeting, it was declared that there will be a revision in the Investment Limits, and a new concept known as Turnover Criteria will be introduced.
[Details of the new limits would be listed here]
The term “Form MSME-1” denotes a Half-yearly Return under which a registered MSME needs to make certain disclosures regarding its vendor to the ROC (Registrar of Companies). Further, all the companies which are receiving goods and services from MSMEs need to file this form with the MCA (Ministry of Corporate Affairs) as well.
In the year 2019, the MCA decided to make some amendments in Schedule III of the Companies Act 2013. These amendments were introduced on 22.01.2019, by way of the Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order 2019.
All the Companies specified in the guidelines issued by the MCA (Ministry of Corporate Affairs) need to file Form MSME-1. Further, the term “specified” includes the companies satisfying the conditions as follows:
All the companies who are receiving goods or services from the MSMEs (Micro Small and Medium Enterprises)
All the MSMEs (Micro Small and Medium Enterprises), which are supplying goods and services to the companies need to file this return with the ROC (Registrar of Companies).
Companies that take any supplies from Micro and Small Industries and those payment is pending for more than 45 days, starting from the date of deemed acceptance or acceptance. Such companies taking supplies in the form of goods or services is termed as Specified Companies. Additionally, the detail that needs to be furnished in the MSME Form 1 are as follows:
The term “Date of Acceptance” denotes two meanings that are as follows:
The term “Date of Deemed Acceptance” denotes the day of actual delivery or rendering of goods or services, where no objection has been raised by the buyer concerning the acceptance of goods and services within 15 days, starting from the date of delivery or rendering of goods or services.
The main reason for the implementation of MSME Form 1 was to assist the MSMEs, which have been remained unpaid by the large ventures. Earlier, there were many companies that used to acquire goods and services from the MSME sector but tend to delay in making payment, which in result, made MSMEs suffer massive losses.
Moreover, by way of this form, the companies now need to disclose the amount due from their side, together with the reason for the delay.
The initial return has to be submitted by every Specified Company in MSME Form 1 regarding the outstanding payment to the micro or medium enterprises within 30 days from the date of publication of the notification.
[Details of the due dates would be listed here]
There are two types of MSME-1 Return which are:
This return is required to be filed by companies within 30 days of publication of order by MCA in form MSME-1 disclosing outstanding amount towards MSME enterprise.
Every specified company is required to file this return on a half-yearly basis on or before the prescribed due date disclosing outstanding amount towards MSME enterprise during that period.
The companies exempted from filing the Form MSME-1 are as follows:
The step by step procedure for filing MSME Form 1 is as follows:
Once you have downloaded the form, select whether you are filing the initial or half-yearly return.
After completing the previous step, enter the CIN of your company and click on the prefill button. Also enter the Global Location Number and PAN Card Number of the Company.
In this step, the applicant is required to enter their basic details as has been given below:
The applicant is required to enter the details regarding the amount that is due to the MSMEs, such as given below:
Half yearly return is also known as a “Regular Return”. In additional, the requisite details for this part are as follows:
Once you click on the prefill button, all the details regarding your company will be filled automatically. However, you can edit the e-mail id of your company if it is changed.
Then you need to enter the amount which is due to be paid to the micro or medium enterprises and then finally submit.
In case a company fails to file Form MSME-1 within 30 days or intentionally furnishes any information which is incomplete or incorrect in any material aspect, then the said company will be held liable to a fine up to Rs 25000.
Moreover, every officer of such defaulter company will either be liable to imprisonment for a term up to 6 months or with a fine of a minimum Rs 25000 and a maximum Rs 300000, or both.
Ans. Micro or Small Enterprises only covered by this filing. It means any payment pending over 45 days to Micro or Small Enterprises.
Ans. MSME-1 Form has been introduced for companies, who received supplies of goods or services from micro and small enterprises and whose payments for such supplies are outstanding for more than 45 days by the MCA.
Form MSME 1 introduction by MCA will help specified companies submit a half-yearly return to the MCA disclosing details like the amount of payment due, the reasons for the delay, etc.
Ans. Companies must furnish the following details to their concerning ROC via Form MSME-1:
Ans. A specified Company under MSME Form-1 refers to a Public or Private company that:
Ans.
Ans. Based on the MCA general circular dated 21.02.2019, the initial return filing of MSME Form 1 must be done within 30 days, starting from the date of said e-form deployment on the MCA 21 portal.
Ans. List of documents needed adjacent to form MGT 7:
MSME Form I is filed on a half-yearly basis, the due date for which is given below:
Ans. [Penalty details would be listed here]
Ans: “The date 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 the 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.
Ans: “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.
Ans. It is to be filed only in respect of those micro and small enterprise suppliers to whom payments exceed forty-five days from the date of acceptance or the date of deemed acceptance of the goods or services.
Ans. Director/Manager/Secretary/CEO/CFO.