MSME Form 1 (MCA): Applicability and Notification for Specified Companies By CS Shiriti Kumari


SPECIFIED COMPANIES ARE REQUIRED TO FILE MSME FORM I IN RESPECT OF WHOSE OUTSTANDING PAYMENTS TO MSMES SUPPLIERS EXCEED 45 DAYS
 
  • Order Named: Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019

  • Date of Notification: Pursuant to Order dated January 22, 2019, issued under Section 405 of the Companies Act, 2013

  • Effective Date: From the Date of Publication in the Official Gazette

MSME FORM I: A Form for furnishing half yearly return with the Registrar of Companies (ROC) in respect of outstanding payments to Micro or Small Enterprises.

In view to Protect the interest of the small group of companies or business, Ministry of Corporate Affairs came up with the  major changes or infusing the compliances by all Specified Companies Weather Public or Private Company or Whether Micro or Small Companies has directed that 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:

  1. the amount of payment due; and
  2. the reasons for the delay;
In exercise of power under section 405 of the Companies Act, 2013, (18 of 2013) the Central Government, considers it necessary to require “Specified Companies” to furnish above-cited information under said section of the Act and makes the following Order called Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019
 
Important Definitions:
 
I. Specified companies mean all companies, who get supplies of goods or services from MSMEs and whose payments to MSMEs suppliers exceed 45 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 MSME Development Act, 2006.
 
II. Micro and Small Enterprise above means any class or classes of enterprises (including proprietorship, Hindu undivided family, partnership firm, company, undertaking, an association of persons or co-operative society) shall be:
 

Manufacturing Sector

Enterprises

Investment in plant & machinery

Micro Enterprises

Does not exceed twenty-five lakh rupees

Small Enterprises

More than twenty-five lakh rupees but does not exceed five crore rupees

Service Sector

Enterprises

Investment in equipment

Micro Enterprises

Does not exceed ten lakh rupees:

Small Enterprises

More than ten lakh rupees but does not exceed two crore rupees

 
Note:
 
Criteria are taken as per Micro, Small and Medium Enterprises Development Act, 2006 and to change the criteria of classification and to withdraw the MSMED (Amendment) Bill, 2015 – pending in LokSabha.
 
The Micro Small and Medium Enterprises have been defined under the MSME Act, 2006. According to the Act, MSME has been broadly classified in two categories:

1. Enterprises engaged in the manufacturing and production of goods pertaining to any industry;


2. Enterprises engaged in providing or rendering services.
(a) Manufacturing Enterprises- The 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 and are defined in terms of investment in Plant & Machinery.

(b) Service Enterprises:  The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.

The Micro Small & Medium Enterprises (MSMEs) are defined in India under the MSMED Act 2006 on the basis of capital investment made in plant and machinery, excluding investments in land and building.

Applicability on Companies:

According to the notification issued by the MCA it has mandated to file disclosures in Form MSME I for every type of the Company:
  • Whether Public or Private Company;
  • Micro or Small Companies;
  • Which satisfies the following two conditions:
Condition 1
Company which has received Goods and/or Services from Micro or Small Enterprise
 
Condition 2
Payment due/not paid to such Micro and Small Enterprise for 46 days from the date of acceptance 
 
Manner of filing MSME Form I:

Initially One-time Return, every company shall require filing 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. 

Last date for filing Initial Return (One time return) in form MSME 1: 21/02/2019

Thereafter, every company shall require filing MSME Form I as half yearly return by October 31 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 for the delay;
 
Means every Specified Company either public or 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 the date of acceptance shall be required to file MSME Form as a return half yearly every year.
 
Due Date for Filing:

  • Initially (One time) : Every company need to file MSME Form I before February 21, 2018 mentioning details of all outstanding dues to Micro or Small enterprises suppliers existing on the date of notification of this order within thirty days;[30 days of publication of these rules i.e. 20th February, 2019 (22nd January, 2019 + 29 days)]
  • Thereafter(Half yearly return): every company shall require filing MSME Form I as half yearly return by 31st October for the period from April to September and by 30th April for the period from October to March every year, in respect of outstanding payments to MSMEs.
Details need to furnish for Initial Return in form MSME 1: 21/02/2019
 
  1. Total outstanding amount due as on date of notification of this order i.e22/01/2019;
  2. Pan Number of the Company
  3. Particulars of the name of suppliers and amount of payments due in the following manner:

Financial Year/Particulars

Name
of Suppliers

PAN of suppliers

Amount Due

Date from which amount is due

 

 

 

 

 


  1. Reasons for Delay in the amount of payments due;
  2. A digital signature of any director of the company whose Form DIR-3 KYC has been filed with MCA.
Above notification is available at the following link:

Exemption to this Rule:

  • Form MSME-1 is not applicable in the case of Medium Enterprises;
  • This Rule applicable only for those Specified Companies whose payment to MSMEs suppliers exceed 45 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 MSME Development Act, 2006;
  • If payment Exceed 45 days but supplier/Creditors given a declaration that they do not fall under Micro or small Enterprises.

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Write a Comment

  • What type of receipt of  goods and services we are talking about?
    I mean if its a Car purchased fom Micro and Small Enterprise which is to be used in Furtherance of business?
    we have purchased a Accounting and Antivirus Software which we are using in our company also be informed?

    11-02-2019 / 09:00:17 AM
    Reply
  • Yes if taken for the business use and payment is due for more than 45 days against that Services rendered by Small

    11-02-2019 / 11:40:09 AM
    Reply
  • Compulsory Nil return required to file with ROC in case of no such case exist of payment due more than 45 Days.

    12-02-2019 / 10:39:31 AM
    Reply
  • Dear Ma'am
    Can we require to give details of those invoices also in such form to ROC :-

    A) Out of total invoice amount inculding GST, Only GST amount not paid due to supplier of goods/ services not file return of GST as per previous trend regularly. this hold amount more than 45 days old

    B) In case of Contract labour suppliers in a factory, PF, ESI Amount hold out of total invoice amount due to contractor not paying regularly

    In both case basic amount paid to supplier of service as well goods.

    Please advice me.

    12-02-2019 / 10:41:22 AM
    Reply
    • According to my understanding, GST amount must be included in total Receipt of Goods/Services (if registered under GST), In both cases yes if there is such reason of not paying (except basic amount paid to supplier of service) then you may disclose in Return with all details that will be a safer side.

      Others Views are Solicited!

       

      12-02-2019 / 06:42:59 PM
      Reply
  • I want to know how the 2 situations mentioned below will dealt with in respect of reporting of outstanding balances as on 22/01/2019 to MSME in Form MSME-1 to be filed with ROC:

    1. If we have not paid an MSME party since it has not filed the GST Returns of the bills of which we have taken input credit of GST amount.

    2. If the outstanding balance is on account of Retention or Performance 

    12-02-2019 / 04:32:58 PM
    Reply
    • Kindly Refer above cited comments hope it will help you to understand !

      12-02-2019 / 06:46:27 PM
      Reply