ll about MSME Form 1 : Initial Return and Half yearly Return

This article is regarding to ‘Micro and Small Enterprise Suppliers’ notified as MCA notification on
date 22nd January 2019 “Specified Companies (Furnishing of Information about payment to micro
and small enterprise suppliers) Order, 2019”

All about MSME Form 1 : Initial Return and Half

yearly Return

Act Reference

eForm MSME FORM 1 is required to be filed pursuant to Order dated 22 January, 2019 issued
under Section 405 of the Companies Act, 2013 and which are reproduced for your reference:

Applicability

1. Specified Companies (Furnishing of information about payment to micro and small enterprise
suppliers) Order, 2019

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:

a. the amount of payment due and

b. the reasons of the delay;

2. Every specified company shall file in MSME Form 1 details of all outstanding dues to Micro or
small enterprises suppliers existing on the date of notification of this order within thirty days from
the date of publication of this notification.

3. Every specified company shall file a return as per MSME Form 1 annexed to this Order, by 31st
October for the period from April to September and by 30th April for the period from October to
March.

Analysis’

1.Specified companies means

(i) All companies, who get supplies of goods or services from micro and small enterprises and

(ii) whose payments to micro and small enterprise suppliers exceed 45 days from the date of
acceptance or the date of deemed acceptance of the goods or services, shall submit a return eform
MSME FORM 1 to the MCA in the interval mentioned below

a. Initial return or

b. Regular half yearly return

2. Micro, Small and Medium (MSME) Enterprises means

In accordance with Micro, Small and Medium Enterprises Development Act, 2006, the manufacture
and service enterprise is defined in terms of investment in plant & machinery and services
respectively as micro, small and medium enterprise as explained below:

Micro Small Medium

Particulars Micro Small Medium
Manufacturing More than Rs. 25 lacs More than Rs. 5 crores
Up to Rs. 25 lacs
Enterprises but up to Rs. 5 crores but upto Rs. 10 crores
More than Rs. 10 lacs More than Rs. 2 crores
Service Enterprises Up to Rs. 10 lacs
but up to Rs. 2 crores but up to Rs. 5 crores
Note: only Micro and Small Enterprise Suppliers are considered. Medium Enterprise suppliers are
not considered as per the notification. Trading enterprises are not covered under MSME Act

3. “date of acceptance” 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.

4. “date of deemed acceptance” 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.

5. Due date for filing eform MSME FORM 1

a. Initial Return: Every specified company shall file in e-form MSME Form 1 details of all
outstanding dues to Micro and Small enterprise suppliers existing on the date of notification of this
order within 30 days from the date of publication (22.01.2019) of this notification.

As per MCA General Circular No.01/2019 dated 21.02.2019 the due date extended for filing of
initial return. i.e. from the date of deployment of eform on MCA portal. The eform MSME FORM 1
available from 01.05.2019 and due date for filing initial return is 30 days from 01.05.2019. i.e.
30th May of 2019

b. Half yearly return: Every specified company shall file a half yearly return in e-from MSME Form
1 as:

Filing Period Due date of Filing

From April to September 31 October
st

From October to March 30 April

th

Note: Since eform MSME FORM 1 available from 01.05.2019, the due date for Half yearly return –
October 2018 to March 2019, may be consider as 30th May of 2019

6.Details to be furnished in eform MSME FORM 1

a. Initial Return:

(i) PAN of the Company

(ii) Email Id of the Company

(iii) Total outstanding amount due as on date of notification of order (22.01.2019)

(iv) Particulars of the name of suppliers and amount of payments due (number of entries to be
specified subject to maximum 99 rows)

-For each supplier the following details to be furnished

(A) FY from

(B) FY to

(C) Name of the Supplier

(D) PAN of the Supplier

(E) Amount due

(F) Specify the date from which amount due

(v) Reasons for Delay in amount of payments due (para)

(vi) Optional attachment if any

b. Regular half yearly return :

(i) Period (Apr to Sep or Oct to March)

(ii) PAN of the Company

(iii) Email Id of the Company

(iv) Total outstanding amount due for the respective period

(v) Particulars of the name of suppliers and amount of payments due (number of entries to be
specified subject to maximum 99 rows)

-For each supplier the following details to be furnished

(G) FY from

(H) FY to

(I) Name of the Supplier

(J) PAN of the Supplier

(K) Amount due

(L) Specify the date from which amount due

(vi) Reasons for Delay in amount of payments due (para)

(vii) Optional attachment if any

The eform MSME FORM 1 to be digitally signed by the following authorised persons of the company

(i) Director or

(ii) Manager or

(iii) Company Secretary or

(iv) CEO or

(v) CFO

For director, DIN details to be given. For Manager, Company Secretary, CEO or CFO PAN details to
be given.
7. Penal Prosecutions

Section 405(4) of the Companies Act, 2013 is reproduced below

If any company fails to comply with an order made under sub-section (1) or subsection (3), or
knowingly furnishes any information or statistics which is incorrect or incomplete in any material
respect,

Particulars Penalty
On defaulting company Extended Up to Rs. 25,000/-
Minimum Fine Rs. 25,000/- which may
extended to Rs. 3,00,000/-
Or
Every Officer who is in default
Imprisonment which may extended to 6
Months or Both

Disclaimer:

All Readers are advised to refer relevant provision of law before applying or accepting any of the
point mentioned above or not. Author accepts no responsibility whatsoever and will not be liable
for any losses, claims or damages which may arise because of the contents of this write up.

The author is Chartered Accountant in Practice and reached at rajasekar@ggaca.in