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MSME Form 1: Know The Procedure to File, Due Dates and Penalties

calendar18 Dec, 2019
timeReading Time: 4 Minutes
MSME Form 1

MSME Form 1 is a form that needs to to be filed by “Specified Companies” who take any supplies from the Micro, Small or Medium Enterprises in the form of either goods or Supplies. It is filed two times in a year that implies that it is a half-yearly return. Furthermore, it is necessary to file this form and failing to do so may call up legal actions against such firms. Let’s learn about this e-form in detail through this blog.

What is MSME Form 1?

The MSME Form 1 is used to furnish a return to the Registrar of Companies regarding the outstanding payments to the micro or medium enterprises. In other words, companies who take any service or goods from the micro or medium enterprises have to file half yearly return in MSME Form I regarding the payments not paid to such industries.

Purpose of MSME Form 1

The purpose of MSME Form 1 is to help the Micro and Small Medium Enterprises and Small Scale Industries. The form was introduced because many companies used to take goods and services but did not pay for or paid the amount after much delay because of which these industries had to suffer losses. On the other hand, the introduction of the MSME Form 1 compelled such companies to report the amount due for payment and the reason for the delay of the payment after 40 days of the receipt of any goods or services.

Who are eligible to file the MSME Form 1?

  • All the companies  receiving goods or services from the MSMEs (Micro Small and Medium Enterprises)
  • All the MSMEs (Micro Small and Medium Enterprises), supplying goods and services to companies should  file the return with the ROC (Registrar of Companies)

Companies that take any supplies from Micro and Small Industries and those payment is pending after 40 days from the date of the receipt of acceptance of such goods or services have to file a half-yearly return along with the details as prescribed. Such companies taking supplies in the form of goods or services is termed as Specified Companies. Additionally, the detail that needs to be furnished in the MSME Form 1 are as follows;

  • The amount of payment which is due
  • The reasons for the delay in payment

Details to be furnished in the MSME Form 1

The information that needs to be provided in the MSME Form 1;

Regarding Initial Return:

  • PAN of the Company
  • E-mail Id of the Company
  • The total outstanding amount unpaid as on date of notification of order
  • Details 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

  • Financial Year from
  • Financial Year to
  • Name of the Supplier
  • PAN of the Supplier
  • Amount due
  • Specify the date from which amount due
  • Reasons for delay in the amount of payments due
  • Optional attachment if any

In the case of Regular half yearly return:

  • Period for which it is being filed for
  • PAN of the Company
  • E-mail Id of the Company
  • Total outstanding amount due for the particular period
  • Details of the name of suppliers and amount of payments due (number of entries to be specified subject to maximum 99 rows)
  • Reasons for delay in the number of payments due (para)
  • Optional attachment if any

For each supplier the following details to be furnished

  • FY from
  • FY to
  • Name of the Supplier
  • PAN of the Supplier
  • Amount due
  • Specify the date from which amount due

The e-form MSME FORM 1 has to be digitally signed by the following authorized persons of the company

  • Director or
  • Manager or
  • Company Secretary or
  • CEO or
  • CFO

The director has to provide his DIN, in case of Manager, Company Secretary, CEO or CFO their PAN details have to be given.

Read our article:MSME Registration – Know the Entire Procedure

The due date for filing MSME Form 1

The initial return has to be submitted by every Specified Company in MSME Form 1 regarding the outstanding payment to the micro or medium enterprises within 30 days from the date of publication of the notification

The due date for filing the half-yearly return in Form 1 is given below;

Sr. No. Filing period Date for filing
1. April to September 31st October
2. October to March 30th April

Procedure for filing MSME Form 1

The step by step procedure for filing MSME Form 1 is as follows;

Step 1: Download e-form

Once you have downloaded the form, select whether you are filing the initial or half-yearly return.

Step 2: Fill CIN

  • After completing the previous step, enter the CIN of your company and click on the prefill button. Also enter the Global Location Number and PAN Card Number of the Company.

Step 3: Enter Basic Details

In this step, the applicant is required to enter his basic details as has been given below:

  • Name of the Company
  • Address of the Registered Office and
  • Email ID and other contact details of the Company.

Step 4: Details for Initial Return

The applicant is required to enter the details regarding the amount that is due to the MSMEs, such as given below:

  • The total Outstanding Amount as on the Notification Date,
  • Details of the Financial Year,
  • The name of suppliers,
  • Supplier’s PAN Card details,
  • Outstanding Amount,
  • The particular date from which the amount is outstanding;

Step 5: Details for Half-yearly Return

Half yearly return is also known as a “Regular Return”. In additional, the requisite details for this part are as follows:

Amount Outstanding From April to September and October to March

  • Financial Year Details (“From” & “To”),
  • Name of Suppliers,
  • Suppliers PAN Card details,
  • The Outstanding amount,
  • Particular Date from which the Amount is Outstanding.

Step 6: Edit any incorrect information

Once you click on the prefill button, all the details regarding your company will be filled automatically. However, you can edit the e-mail id of your company if it is changed

Step 5: Enter the amount of due payment

Then you need to enter the amount which is due to be paid to the micro or medium enterprises and then finally submit.

Late Filing Penalty for MSME Form 1

Companies who fail to comply withSection 405 (1) and (3) of the Companies Act, 2013[1] are liable for a penalty as mentioned under Section 405 (4) of this Act as follows;

Sr. No. Particulars Penalty
1. On defaulting company Up to Rs. 25, 000
2. On offer in default Minimum fine of Rs 25, 000 which can be extended up to Rs. 3, 00, 000 Or, Imprisonment extending up to six months Or Both

Final words

You should remember these key features of MSME Form 1;

  • It applies only to only micro or medium enterprises
  • It is not compulsory to file a Nil return
  • Reimbursement of expenses is not covered under MSME
  • Companies need to take confirmation from the supplier whether they fall under the category of MSME or not
  • The form should be signed by the management/ officials of the company only.

Read our article:What are The Government Schemes Launched by MSME?

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