MSME Form – Semantic Taxgen Pvt Ltd


MSME Form Under MCA

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About MSME Form

The Ministry of Corporate Affairs (MCA), on the 22nd of January 2019, notified a requirement companies that have 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). MSME-1 must be filed within 30 days of the issue of the notification, which to be precise was the 21st of February, 2019 (this date has now been extended as has been specified in this article). This due date was then extended and now the present due date is within 30 days of the form being made available by the MCA. In this article, we look at Form MSME 1 in detail.

Micro and small enterprises refer to any class or classes of enterprises, whether proprietorship, Hindu Undivided Family (HUF), Association of Persons (AOP), co-operative society, partnership firm, company or undertaking or any other name assigned to it. If such entities are in pursuit of the manufacture or production of goods, it must satisfy the following conditions:

    1. Micro enterprises – manufacturing enterprises, to be classified as micro, must have made an investment of Rs. 25 lakhs or lower. On the other hand, entities of the service sector must have invested a sum of Rs. 10 lakhs or lower in equipment to receive this classification.
    2. Small enterprises –manufacturing enterprises would be classified as small for this purpose if its investment in Plant and Machinery exceeds Rs. 25 lakhs but is limited to Rs. 5 crores. On the other hand, enterprises in the service sector would be classified as small if their investment in equipment exceeds Rs. 10 lakhs but is limited to Rs. 2 crores.

To start with, specified companies 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 22nd of January, 2019. It may be noted that this is a one-time return, which is to be submitted by the 21st of February, 2019 (now delayed).
  • Name of the supplier.
  • PAN of the supplier.
  • Date on which the liability starts.
  • Firstly identify your MSME registered suppliers and ask for their registration certificate.
  • If there are any such suppliers who are Registered under MSME Act and if the payments to them are due for more than 45 days from the date of acceptance of the goods and services, then details of such suppliers shall be furnished in Form MSME-1.
  • Name of supplier
  • PAN of supplier
  • Amount due against the supplies of goods or services
  • Date from which the amount is due
  • Reason of delay in payment of the amount due

If any company fails to file MSME-1 within 30 days or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect, the company shall be punishable with fine which may extend to twenty-five thousand rupees and every officer of the company who is in default, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees, or with both.

Any company defaulting under these provisions would be forced to remit a fine of up to Rs. 25,000; whereas the defaults of a Director, CFO or CS would qualify for an imprisonment term of up to six months or a fine ranging between Rs. 25,000 to Rs. 3,00,000.

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