Compliance of MSME-1 Form for Disclosure of Outstanding Payments to MSMEs

Compliance of MSME-1 Form for Disclosure of Outstanding Payments to MSMEs . To protect the the interests of Micro and Small Enterprises (MSEs), the Ministry of Corporate Affairs (MCA) mandates every company registered including OPC, Private Limited company, Section 8 company etc at MCA  to file Form MSME-1 if it has outstanding dues to MSEs for more than 45 days, initiative aligns with the provisions of the MSME Development Act, 2006, and Section 405 of the Companies Act, 2013, promoting prompt payments and financial transparency. Regular half yearly return of outstanding dues (more than 45 days) to Micro or Small Enterprises Suppliers and must report all outstanding amount that are due for more than 45 days or were liquidated after 45 days of acceptance of goods/service 
In March 2025, a revised MSME-1 Form was introduced on the MCA V3 portal, requiring companies to provide a more detailed account of their transactions and payment status with MSME suppliers. As per the latest Notification dated March 25, 2025, issued by the Ministry of MSME, companies are now required to submit a half-yearly return in the updated MSME-1 format, disclosing:

Payment made within 45 days

Payments made after 45 days

Amounts currently outstanding (less than or more than 45 days)

Reasons for delay in payment

This revision, as notified in the Official Gazette, is effective immediately and aims to ensure greater accountability and timely payment cycles for MSME suppliers.
Applicability of form MSME-1 
All companies registered under the Companies Act, 2013 or earlier Acts that have:

Purchased goods or services from Micro or Small Enterprises, and

Have outstanding payments exceeding 45 days from the date of acceptance or deemed acceptance.

Note: Medium Enterprises are not covered under this compliance requirement.
Timeline for MSME-1 Filing

Period Covered

Due Date for Filing MSME-1

April to September

By 31st October every year

October to March

By 30th April every year

Disclosures in MSME-1 Form

Name and PAN of MSME suppliers

Amount due and payment dates

Outstanding as on date (segregated by < 45 days and > 45 days)

Reasons for non-payment within the 45-day limit

Penalty for Non-Compliance
If a company fails to file Form MSME-1 or furnishes false/incomplete information, it shall be liable under Section 405(4) of the Companies Act, 2013. The penalties include:

Company: Fine up to Rs.25,000

Officers in default: Imprisonment up to 6 months and/or fine between Rs.25,000 and Rs.3,00,000

How Can  Compliance Calendar LLP Help?
At Compliance Calendar LLP, we assist companies in:

Identifying eligible MSME creditors of the company

Verifying the 45-day cut-off dates

Preparing accurate disclosures

Filing Form MSME-1 on the MCA V3 portal

Avoiding penalties through timely compliance

Therefore, the form MSME-1 filing is more than just a MCA regulatory formality—it is a compliance tool that strengthens the MSME ecosystem and reinforces corporate responsibility. With the revised filing requirements now in place, it is mandatory for all companies to monitor MSME dues and file accurate half-yearly returns Pursuant to Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019 dated 22.01.2019 (The order stands substituted on 15.07.2024) issued under Section 405 of the Companies Act, 2013 without fail for avoiding penalties by non compliance of form MSME-1 Filing

To protect the the interests of Micro and Small Enterprises (MSEs), the Ministry of Corporate Affairs (MCA) mandates every company registered including OPC, Private Limited company, Section 8 company etc at MCA to file Form MSME-1 if it has outstanding dues to MSEs for more than 45 days, initiative aligns with the provisions of the MSME Development Act, 2006, and Section 405 of the Companies Act, 2013, promoting prompt payments and financial transparency. Regular half yearly return of outstanding dues (more than 45 days) to Micro or Small Enterprises Suppliers and must report all outstanding amount that are due for more than 45 days or were liquidated after 45 days of acceptance of goods/service

In March 2025, a revised MSME-1 Form was introduced on the MCA V3 portal, requiring companies to provide a more detailed account of their transactions and payment status with MSME suppliers. As per the latest Notification dated March 25, 2025, issued by the Ministry of MSME, companies are now required to submit a half-yearly return in the updated MSME-1 format, disclosing:

Payment made within 45 days
Payments made after 45 days
Amounts currently outstanding (less than or more than 45 days)
Reasons for delay in payment

This revision, as notified in the Official Gazette, is effective immediately and aims to ensure greater accountability and timely payment cycles for MSME suppliers.

Applicability of form MSME-1

All companies registered under the Companies Act, 2013 or earlier Acts that have:

Purchased goods or services from Micro or Small Enterprises, and
Have outstanding payments exceeding 45 days from the date of acceptance or deemed acceptance.

Note: Medium Enterprises are not covered under this compliance requirement.

Timeline for MSME-1 Filing

Period Covered	Due Date for Filing MSME-1
April to September	By 31st October every year
October to March	By 30th April every year

Disclosures in MSME-1 Form

Name and PAN of MSME suppliers
Amount due and payment dates
Outstanding as on date (segregated by < 45 days and > 45 days)
Reasons for non-payment within the 45-day limit

Penalty for Non-Compliance

If a company fails to file Form MSME-1 or furnishes false/incomplete information, it shall be liable under Section 405(4) of the Companies Act, 2013. The penalties include:

Company: Fine up to Rs.25,000
Officers in default: Imprisonment up to 6 months and/or fine between Rs.25,000 and Rs.3,00,000