Provision of the Act

The requirement was introduced under Order dated January 22, 2019 in purview of Section 405 of the Companies Act, 2013. The Central Government made it imperative for all ‘Specified Companies’ to provide detailed information with respect to outstanding payment to micro, and small enterprises (MSME).

The MSME Act, 2006 encompasses those enterprises which are into manufacturing and production of goods and service enterprises, which are engaged in rendering of services. Micro and small enterprises include the entities such as Proprietors, HUF, Partnership firms, Hindu Undivided Firm (HUF), Co-operative society, Company, Undertaking, Association of Persons.

Applicability

The Specified Company is one, which has received goods or services from the registered micro or small vendors, and makes the default in the payment which is either outstanding or exceeds more than forty-five days from date of acceptance of goods or services. These ‘Specified Companies’ has to made disclosure through MSME Form 1.

The ’Specified Companies’ includes Companies such as Private, Public, Micro or Small Companies, which are required to furnish the below details while filing the half-yearly return:

• The outstanding amount
• Reasons for delay and default in the payment

The form has to be digitally signed by the Director having a valid Director Identification Number (DIN) or Manager/ CEO/CFO having valid PAN Details, or Company Secretary with membership number and details as requisite.

Fees and Penalty

No filing fees is applicable on the MSME Form 1 (Half-yearly return) with the Registrar of Companies (ROC) on MCA Portal. The e-form is processed in Straight Through Process (STP) mode and on submission the challan is generated with Service Request Number (SRN) which can used for future record purpose.

However, under the Section 405 (4) of Companies Act, 2013, penalty is imposed for incomplete furnishing of information which amounts to INR 25,000 (Companies) and minimum INR 25,000 maximum INR 3 lakhs and imprisonment for six months for the Directors or both. Thus, filing the MSME Form 1 is mandatory.

Due Dates for filing MSME Return (MSME Form 1)

MSME Form 1 (Half-yearly Return)

The MSME Form 1 for half yearly return is to be filed with the Registrar of Companies (ROC) within forty -five days (45) from end of each half year relating to outstanding payment to Micro and small enterprise vendors. Below is a tabular form:

Well, if you are looking for any legal help, the professionals at Compliance Calendar LLP can ensure the legal procedures being catered to as laid down under the various Acts applicable by law. Reach out to us at info@ccoffice.in and we shall revert as soon as possible to ease your enquiry and help in making your business compliant.