The Ministry of Corporate Affairs (MCA), on the 22nd of January 2019, notified a requirement for companies that have dues outstanding to MSME enterprises to file the particulars of all current outstanding dues to the concerned Micro and Small Enterprises in Form MSME 1. The filing of such returns comprises of two parts, namely initial returns (MSME-1) and half-yearly return (MSME-2).
This compliance is applicable to all companies getting goods or services from micro and small enterprises. Specifically, it is meant for those companies whose payments to the latter haven’t been made for more than forty-five days from the date of acceptance of the goods or services. As per the notification, these companies are required to furnish a half-yearly return to the Ministry of Corporate Affairs stating the particulars of the outstanding amount and the reasons for delay in payment to MSME enterprises.
All the companies, to whom this compliance is applicable, are required to identify whether their suppliers are registered under the MSME Act. If they have been, and if payments to them are due for more than 45 days from the date of acceptance of the goods or services, the company would either be required to close the pending dues or file returns of the particulars of the liability, along with the reason for its delay in MSME Form 1. The particulars of liability should include:
- The total outstanding amount due on the date the form is deployed
- Name of the supplier.
- PAN of the supplier.
- Date on which the liability starts.
One time: The due date for filing Form MSME 1 shall be within a period of thirty days from the date the form is deployed on the MCA 21 portal. The Form has not been deployed yet.
Annual: Post the one time filing, the MSME Forms shall be required to be filed twice a year as under:
For the period April – September – Due date 31st October
For the period October – March – Due Date 30th April
Nikita Bhatia is the co-founder of VenturEasy, an online platform for Company registration, book-keeping, accounting, tax consultancy and legal compliances in India. A Chartered Accountant and company secretary by profession, she has wide experience in the fields of audit, accountancy, taxation and corporate governance.