{"id":923,"date":"2019-11-04T07:29:38","date_gmt":"2019-11-04T07:29:38","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=923"},"modified":"2021-03-19T12:16:13","modified_gmt":"2021-03-19T06:46:13","slug":"what-are-the-msme-compliances","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/","title":{"rendered":"All You Need to know about MSME Compliances"},"content":{"rendered":"\n<p class=\"has-drop-cap\">MSME\n(Micro Small and Medium Enterprise) is the pillar for the economic growth in\nmany developed and developing countries across the world. These micro small and\nmedium enterprises help in the accelerating the growth of our economy in the\nsame as small things contribute towards the formation of the heap. Micro Small\nand Medium Enterprises is considered as the engine of betterment for all the\ndeveloped and developing countries.<\/p>\n\n\n\n<p>\u00a0The\u00a0MSME sector in India contributes 45 % of the total Industrial employment, 50% of the Total Exports and 95% of the industrial units in our country. The government of our country has taken many initiatives and offered benefits to help the owners of these MSMEs to run and operate these enterprises efficiently. These tracks help in maintaining the record in a systematic manner which in future will accelerate the <strong>GDP growth<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/List_of_countries_by_real_GDP_growth_rate\"><strong>[1]<\/strong><\/a><\/sup> of our country. Here in this article, we will see in detail the MSME Compliances.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#The_basic_difference_between_Small_and_Micro_Enterprises\" >The basic difference between Small and Micro Enterprises<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#What_are_Specified_companies\" >What are Specified companies?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#Compliances_for_MSME\" >Compliances for MSME<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#What_is_the_Return_Periodicity_of_MSME_Form_1\" >What is the Return Periodicity of MSME Form 1?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#Issues_MSMEs_must_tackle_to_ensure_compliances\" >Issues\nMSMEs must tackle to ensure compliances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#What_are_the_responsibilities_of_the_Specified_Companies_after_the_MSME_Registration\" >What are the responsibilities of the Specified Companies\nafter the MSME Registration?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#What_is_the_Due_Date_of_MSME_Form_1\" >What is the Due Date of MSME Form 1?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#What_is_the_Penalty_for_not_complying_with_these_standards\" >What is the Penalty for not complying with these\nstandards?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-msme-compliances\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_basic_difference_between_Small_and_Micro_Enterprises\"><\/span>The basic difference between Small and Micro Enterprises<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Small\nEnterprises are those enterprises in which the manufacturing units have made a\nminimum investment of INR 50&nbsp; lakhs or below. Whereas for another category\nthat is Service Enterprises, service enterprises have to invest less than INR\n20,00,000 in these kinds of enterprises<\/p>\n\n\n\n<p>Micro&nbsp;Enterprises\nare those enterprises in which the manufacturing units have made a minimum\ninvestment of INR 2.5lakhs or below. Whereas for another category that is\nService Enterprises, service enterprises have to invest less than INR 10,\n00,000 in these kinds of enterprises.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_Specified_companies\"><\/span>What are Specified companies?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Specified\nCompanies are those companies who get supply from micro small and medium\nenterprises. In addition to this, Companies whose payments to Micro and small\nenterprise suppliers transcend 45 days from the date of acceptance or the date\nof deemed acceptance of the goods or services as per the provisions of Section\n9 of the MSMED (Micro, Small and Medium Enterprises Development) Act, 2006.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Compliances_for_MSME\"><\/span>Compliances for MSME<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>MSME Form 1 is a mandatory compliances for the specified companies which are defined in Section 9 of the MSMED (Micro, Small and Medium Enterprises Development) Act. These specified companies file the MSME Form 1 on a. half-yearly basis to the MCA (Ministry of Corporate Affairs).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Return_Periodicity_of_MSME_Form_1\"><\/span>What is the Return Periodicity of MSME Form 1?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Every\nspecified company has to submit the yearly return on a half-yearly basis to the\nRegistrar concerning the outstanding payments to the Micro, small and medium\nenterprises which contain the following information:<\/p>\n\n\n\n<ul><li>The amount of payment due;<\/li><li>The reasons for the delay.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issues_MSMEs_must_tackle_to_ensure_compliances\"><\/span>Issues\nMSMEs must tackle to ensure compliances<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li><strong>Organizational structure:\u00a0<\/strong>It is important to have a good and organised structure for business to make it successful. Many businesses lack either well planned structure, skill, knowledge, administrative apprehension and other additional compliance burden and do not get their businesses registered. Therefore, registration is required for the business so that the opportunities for the business opens up from the state and the central enterprises, they get the benefits from subsidies, higher tax rebates, easy access of investment or working capital. <\/li><li><strong>Delayed payments:\u00a0<\/strong>the problem of delayed realisation of bills is faced by every organization. This becomes the reason of excess financial constraints which is one of the major reasons for their consecutive failure. Nonetheless, such companies must be aware that according to the MSME Act 2006, it is the liability of the buyers to clear their invoices within the time period of 45 days so as to avoid heavy penalties. <\/li><li><strong>Tax liability:\u00a0<\/strong>with the introduction of GST, it has enhanced the ease of doing business for start-ups in India by bringing all state and central level levies and taxes under one cover but with that it has also increased the high pressure compliance on MSMEs. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_responsibilities_of_the_Specified_Companies_after_the_MSME_Registration\"><\/span>What are the responsibilities of the Specified Companies\nafter the MSME Registration?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The task does not end after you had the\u00a0<a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSME Registration<\/strong><\/a>; there are certain compliances which needs to be followed by the Specified Companies.<\/p>\n\n\n\n<ul><li>The specified Companies need to check whether their suppliers are registered under the MSME Act or not.<\/li><li>If they are registered under the MSME Act, the Specified Companies need to check if there is any due payment from their end for a period which has exceeded 45 days from the date of acceptance of the services or goods by such company. Also, the company has to either close or file a return of the particulars of the due payments stating the reason for the delay in the MSME Form1.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">The specifications of the Liability include:<\/h3>\n\n\n\n<ul><li>The total amount of the Liability (Due Payment) on January 22nd, 2019.<\/li><li>Supplier Enterprise<\/li><li>PAN Card of the Supplier enterprise<\/li><li>The date from which the Liability started.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Due_Date_of_MSME_Form_1\"><\/span>What is the Due Date of MSME Form 1?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>All the\nspecified companies are required to file the yearly return on a half-yearly\nbasis. These companies need to file in the MSME Form 1 stating the outstanding\ndues to the Micro Small and medium enterprises suppliers within 30 days from\nthe date of the publication of the notification specifying the order to perform\nthe same.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Extension of the Due Date<\/h3>\n\n\n\n<p>The\nMinistry Of Corporate Affairs on February 21st 2019 state that the date of\nfiling the MSME Form 1 will be calculated from the time the form is deployed on\nthe MCA 21 Portal.<\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  Period of\n  Return:\n  <\/td><td>\n  Date of\n  Filing\n  <\/td><\/tr><tr><td>\n  April to\n  September\n  <\/td><td>\n  31<sup>st<\/sup>&nbsp;October\n  <\/td><\/tr><tr><td>\n  October to\n  March\n  <\/td><td>\n  30<sup>th<\/sup>&nbsp;April\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Penalty_for_not_complying_with_these_standards\"><\/span>What is the Penalty for not complying with these\nstandards?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare the penalties for not complying with these standards:<\/p>\n\n\n\n<ul><li>There will be a fine of INR 25000 with the Defaulter Company.<\/li><li>The concerned officer of the company will be liable for imprisonment up to six months, or there will be a fine from INR 25000 to INR 3, 00,000.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Ministry of Corporate affairs has altered the MSME compliances as per its requirements. Also, they have made it mandatory for micro small and medium enterprises to file returns stating their due payments to the Micro and small enterprises along with the reasons for the delay in MSME Form 1. The specified Companies under the MSME need to file the return on a half-yearly basis.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/msme-registration-essentials-and-upcoming-benefits-for-business\/\">MSME Registration: Essentials and Upcoming Benefits for Business\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>MSME (Micro Small and Medium Enterprise) is the pillar for the economic growth in many developed and developing countries across the world. These micro small and medium enterprises help in the accelerating the growth of our economy in the same as small things contribute towards the formation of the heap. Micro Small and Medium Enterprises [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":27768,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[120],"tags":[162],"acf":{"service_id":"321"},"authorName":"Shalini Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2019\/09\/MEE.jpeg","authorDescription":"Shalini is a B.tech graduate but her keen interest in writing impelled her to continue as a content writer. Further, She has a rich experience in Companies Act and Ammendment related topics.","postViews":24588,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/923"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=923"}],"version-history":[{"count":15,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/923\/revisions"}],"predecessor-version":[{"id":27767,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/923\/revisions\/27767"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/27768"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}