Every company must file the MSME Form I as a half-yearly return by October 31st, effective for the months of April to September, and again by April 30th, effective for the months of October to March each year, referring to outstanding payments to MSMEs. The MSME I Form is used to give information to the Registers of Companies on a half-yearly basis regarding outstanding payments to Micro or Small Enterprises for a period of more than 45 days (ROC).
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What does MSME Form 1 (MCA) stand for?
The MSME I Form is used to give information to the Registrar of Companies on a half-yearly basis regarding outstanding payments to Micro or Small Enterprises for a period of more than 45 days (ROC). The Ministry of Corporate Affairs has taken significant changes to protect the interests of small groups of enterprises or businesses. He emphasized the importance of all Specified Companies, whether public or private, micro or small, according to the rules.
All companies that receive supplies of goods or services from micro or small enterprises and make payments to these micro and small enterprise suppliers for more than 45 days from the date of acceptance (or deemed acceptance) of the relevant good or services are necessary to submit a half-yearly return to the Ministry of Corporate Affairs on a mandatory basis. It should include the following points:
- The amount of the payment that is due, and
- the cause of the delay
The Central Government makes it mandatory for all “Specified Companies” to provide the above-mentioned information about payments to micro and small firm suppliers under section 405 of the Companies Act, 2013, (18 of 2013).
Who Should Submit MSME-1?
When payments to MSME are due for more than 45 days from the date of acceptance of the services or commodities, specified firms must complete Form MSME-1, along with the cause for the delay. Companies that have been specifically identified are those that are based in the United States.
- They have purchased goods or services from a small business.
- Whose payments to MSMEs are late for more than 45 days after acceptance or assumed acceptance of the goods or services.
What is the purpose of MSME-1?
All companies that receive supplies of goods or services from micro and small businesses and make payments to micro and small business suppliers for more than 45 days from the date of acceptance or deemed acceptance of the goods or services as defined in section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006) (hereinafter referred to as “Specified Companies”). They must file a return with the Ministry of Corporate Affairs in initial or half-yearly intervals.
Due Date for MSME Form 1 (Initial Return)
For all qualified businesses, the government has extended the MSME form 1 deadline to May 30, 2020. The agency previously stated that corporations will have 30 days to fill out the form.
Due Date for MSME Form 1 (Half Yearly Return)
In the case of overdue payments to Micro or Small Enterprises, Form MSME I (half-yearly return) must file within 45 days of the end of each half-year, i.e. 30th April 2022 for October 2021 to March 2022 and 31st October 2022 for April 2022 to September 2022.
Step-by-Step Instructions for Filling out MSME
Step 1: Provide company information, including the corporate identity number, global location number, and PAN.
Step 2: Provide basic information about the company, such as its name, address, and email address.
Step 3: Specifics such as the initial payment of unpaid dues to MSE suppliers.
Step 4: Information on how to return unpaid dues to MSE suppliers on a regular basis.
Step 5: Specifics depending on the reason for the payment amount delay.
Step 6: Any additional validation attachments.
Step 7: The corporate director then makes a declaration, which follows by a digital signature.
MSME Form 1 Penalty for Late Filing
Non-furnishing/incomplete information punishment under section 405(4) stipulates a fine of up to Rs.25000 (Co.,), Rs.25000 & Rs.3Lakhs (Max) and 6-month imprisonment or both. As a result, filing MSME form 1 is a requirement for directors.
Conclusion
The Micro, Small, and Medium-sized enterprise (MSME) sector is the backbone of the Indian economy. This industry has played a critical role in the nation’s development. Such as generating a large number of job opportunities for the unemployed and underemployed. It also provided banks with greater options to provide credit to MSME businesses. The government should pay special attention to the importance of MSME. Government should offer more and more MSME benefits by enacting improved rules to provide credit at lower interest rates, for the sector’s long-term viability.
