Solved! Major Queries Related to Form MSME-1 Under MCA

Ministry of Corporate Affairs has come up with a change in Schedule III of the Companies Act 2013 read with section 368(E) dated January 22, 2019, of Companies Order 2019 required for presenting the information related to payment for supplies to micro and small enterprises hereby notified to file Form MSME-1 under MCA.

About Form MSME-1

The form is to be filed by the public/private firm who is dealing with the vendors registered under Micro, Small and Medium Enterprises (MSME) development act 2006. It contains the details of the transaction between the seller (MSME) and the purchaser (the company). Here we will go through all the general and frequently asked questions on form MSME 1 under MCA and understand the basic issues under the MSME (Micro, Small, and Medium Enterprises).

FAQs Related to Form MSME-1 Under MCA

Q.1 Can MSME form be filed along with CFSS Scheme?

• Form MSME-1 does not come under the forms that are available for CFSS purposes. CFSS grants a company immunity from penalties, interests or fines

Q.2 What is the aim behind filing MSME-1?

• The aim behind filing the form is that the company gives a declaration to the registrar regarding the status of its outstanding dues with MSMEs

Q.3 What are the provisions related to Form MSME-1?

• Provisions of order 2 and 3 dated 22 Jan 2019 and issued under section 405 of the Companies Act 2013 is applicable

Q.4 Is there a necessity to file NIL returns if there are no outstanding dues?

• No, the company needs not to file any NIL returns if there are no outstanding dues to be paid to MSMEs

Q.5 What are the deadlines for Filing Form MSME-1?

• For the First half – April to September 31 October
• For Second half – October to March 30 April

Due Dates for filing form MSME 1

Q.6 Who needs to file Form MSME-1?

• The public and private companies who acquire goods or services from the MSMEs and if their outstanding payment goes beyond 45 days starting from the date of receiving the goods or services, as mentioned under the provisions of section 9 of the MSMED Act 2006

Q.7 What kind of return is Form MSME-1?

• MSME-1 is a half-yearly return that needs to be filed twice a year. Once for the period of April to September and another for the period in-between October to March

Q.8 What information is needed in Form MSME-1?

• The details of all the outstanding payments that are needed to be done to MSMEs for the supply of goods and services. If such payments are outstanding for more than 45 days starting from the date of receiving the goods and/or services. In relevance to section 9 of the Micro, Small and Medium Enterprises Development Act (MSMED) 2006

Q.9 What are the consequences if the agreement terms are 28 days and payment is done after the agreement period?

• Any payment done after the agreement period is termed as ‘delayed payment’ and needs to be reported if the delay continues

Q.10 The agreement between the supplier and purchaser is of 60 days and at the time of filing the returns, the amount is outstanding for more than 45 days and less than 50 days. Is reporting still required?

• Under the aforesaid circumstances, the reporting needs to be done as mentioned under the rules of the MSME Act 2006 if the outstanding liability exceeds 45 days

Q.11 What if there is no agreement between the supplier and the purchaser?

• In case there is no agreement between the supplier (MSME) and the purchaser (the company) then the 45 days criteria will be applicable or the due date of payment for supply will be considered as 45 days.

Q.12 What if a supplier is not registered as MSME under the MSME Development Act 2006 at the time of filing form MSME-1?

• The company needs to report about such suppliers

Q.13 How many entries can be included in one single form?

• One form can include up to 99 entries

Q.14 On 31.03.2020, the is no outstanding liability of supply payment on the company but the company has made delayed payments to the MSME vendors. Does the company still need to file Form MSME-1?

• The companies need to file the form and give the details only of the payments that are outstanding at the due date for filing the form i.e. 31/03/2020. The details of payments made before filing the form need no entry in the form

Q.15 What if the company’s entries of supply are more than 99?

• In case the entries are more than 99 then the company is required to file multiple forms at a single time

Q.16 Who is required to file the form if the company is under the IBC process?

• It is the duty of the Resolution Professional to file the form on the company’s behalf (advised).

Q.17 If there any exemption applicable to filing Form MSME-1?

• Medium enterprises are exempt from filing the form MSME-1

Q.18 What is the penalty for the delayed filing of Form MSME-1?

• No, there is no penalty mentioned for the delayed filing of form MSME-1

Q.19 Is there any nominal fee applicable for filing MSME Form?

• No fee is asked at the time of filing the MSME-1 form

Q.20 What is the processing mode of this E-Form?

• The form will be processed in STP mode

Q.21 Is there any penalty for non-filing of Form MSME-1?

• If the liable company does not file the form, then it will lead the company to punishment or levy of penalty as mentioned under the provisions of Section 405 of Companies Act 2013