The Ministry of Micro, Small and Medium Enterprises vide notification dated 2nd November 2018, had directed all Companies, who get supplies of goods or services from Micro and Small Enterprises and whose payments to such suppliers exceed 45 (Forty-Five) days from the date of acceptance or the date of deemed acceptance of goods or services as per the provisions of the Act*, to submit a Half yearly return to the Ministry of Corporate Affairs stating the following:
The amount of payments due
The reasons for the delay
Date of acceptance here 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.
Date of deemed acceptance here 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.
Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:1. Manufacturing Enterprises-he enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.2. Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment..The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified,vide S.O. 1642(E) dtd.29-09-2006 ff5dfd7728900a8a1ef656da72067645.pdf are as under
Investment in plant & machinery
Does not exceed twenty five lakh rupees
More than twenty five lakh rupees but does not exceed five crore rupees
More than five crore rupees but does not exceed ten crore rupees
Investment in equipments
Does not exceed ten lakh rupees:
More than ten lakh rupees but does not exceed two crore rupees
More than two crore rupees but does not exceed five crore rupees
Now, the Ministry of Corporate Affairs vide its notification dated 22nd January 2019 has issued “Specified Companies (Furnishing of information about payment to Micro and Small enterprise suppliers) Order, 2019” [“Order”] to provide for reporting requirements under the aforesaid notification.
This Alert provides an overview of the provisions of the Order which impacts the provisions under the Act and has binding effect on compliances with Ministry of Corporate Affairs for all the Companies.
As per the latest notification issued by the MCA it has mandated to file disclosures in Form MSME I for every type of the Company [Weather Public or Private Company]which satisfies following two conditions:
Company which has received Goods and/or Services from Micro or Small Enterprise
Payment due/not paid to such Micro and Small Enterprise for 46 days from date of acceptance
Micro and Small Enterprise above means any class or classes of enterprises (including proprietorship, Hindu undivided family, partnership firm, company, undertaking, association of persons or co-operative society) shall be:
1. Micro Enterprise whose:
a) investment in plant and machinery does not exceed 25 lakh rupees if such enterprises engaged in the manufacture or production of goods; or
b) investment in equipment does not exceed 10 lakh rupees if such enterprises engaged in providing or rendering of services;
2. Small Enterprise whose:
a) investment in plant and machinery is between 25 lakh rupees to 5 crore rupees; or
b) Investment in equipment is between ten lakh rupees to 2 crore rupees.
Manner of filing MSME Form I:
Every company shall require filing MSME Form I as half-yearly return by 30th October for the period from April to September and by 30th April for the period from October to March, along with following details:
a)the amount of payment due; and
b)the reasons of the delay;
Means every public or a private company which receive goods and services from above mentioned small and micro-enterprise and whose payment due or not paid to such micro and small enterprise for 46 days from date of acceptance shall be required to file MSME Form as a return half-yearly every year.
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