FORM MSME-1 Furnishing Return with ROC

FORM MSME-1 Furnishing Return with ROC

FORM MSME-1 Furnishing Return with ROC: The MSME I Form is created to present information in the framework of the outstanding payments to Micro or Small Enterprises for a period exceeding 45 days with the ROC- Registrar of Companies on a half-yearly basis.

In the context of preserving the interest of the small group of businesses or companies, significant revisions have been made by the Ministry of Corporate Affairs. Whether the company is Public or Private, Micro or Small, the Ministry of Corporate Affairs laid a prior emphasis on following compliance by all Specified Companies.

What is MSME Form 1(MCA)?

The Ministry of Corporate Affairs states it is mandatory to submit a half-yearly return by all those companies who obtain the supply of goods or services or both from Micro or small enterprises and is required to mention the payment done to certain micro and small enterprise suppliers exceed 45 days from the date of reception (or deemed receipt) of the associated good or services.

The following points must be stated in the form:

  • the due amount and
  • the causes or reasons for the delay

As per the provision mentioned in Section 405 of the Companies Act, 2013, (18 of 2013), the Central Government made it essentially obligatory for all the “Specified Companies” to fulfill the above-notified information pertaining to the payment to micro and small enterprise suppliers.

In respect of the payments outstanding to Micro or Small Enterprises, they are required to furnish all the returns with ROC.

As one is aware that the MCA wide order dated 22nd January 2019 commanded all companies who receive supplies of goods or services from enterprises which are micro and small and whose payments to Micro and small enterprise suppliers surpasses forty-five days from the date of deemed acceptance or the date of acceptance of the goods or services in accordance to the guidelines as mentioned in Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006) (related to as “Specified Companies” from now on), shall submit stating the following points a half-yearly return to the Ministry of Corporate Affairs :

  • the due amount and
  • the causes or reasons for the delay

All the outstanding due payments to Micro or small enterprises suppliers of every specified company shall file in MSME Form I details, existing on the date of notification of this order; i.e., 22nd January 2019, within 30 days from the date of deployment on the portal of MCA 21. (i.e., from the 1st May 2019, within 30 days)

As per MSME-1, all specified companies shall file a return for the period from April to September for the period from October to March, by 31st October, and by 30th April.

MSME-1 FORM is needed to file two times in the month of May 2019:

  1. As of 22nd January 2019, the Initial Return for the amount outstanding
  2. As of 31st March 2019, the Half Yearly Return for the amount is due.

Important Definitions

Specified Companies suggest all companies who receive supplies of goods or services from enterprises that are micro and small and whose payments to enterprise suppliers, whether micro and small, exceed forty-five days from the date of deemed acceptance or the date of acceptance of the goods or services in accordance to the provisions made in section 9 of the Enterprises Development Act,2006 for Micro, Small and Medium Enterprises.

Note: MSME-1 form is not applicable to Medium Enterprises.

Micro & Small Enterprises above indicates any class or classes of enterprises (including Partnership firm, Companies, Association of Person, Co-operative Society, Proprietorship Firm, Hindu Undivided Family, other entities, etc.) shall be classified into:

Ceiling on Investment in Machinery and Plant for enterprises engaged in or preservation, production, or processing of goods (in INR):

  1. Micro- Below INR 25 lakhs
  2. Small– More than INR 25 lakh but does not exceed INR 5 crore

Ceiling on Investment in equipment for enterprises engaged in the service sector (in INR):

  1. Micro- Below INR 10 lakhs
  2. Small– More than Rs.10 lakh but does not exceed Rs. 2 crore

Note: Only registered enterprises having valid MSME certificates shall be acknowledged, and as MSME registration, Udyog Aadhar is also recognized.

Day of Acceptance means:

  • The day of the actual rendering of services or delivery of goods; or
  • Within the specified deadline of fifteen days from the day of the delivery of goods or the commencement of services, if any objection is made in writing regarding the acceptance of goods or services, by the buyer the day on which the supplier withdraws such objection.

Day of Deemed Acceptance means a day of the rendering of services or the actual delivery of goods, where no objection is made in writing by the buyer regarding the acceptance of goods or services within the time limit of fifteen days from the day of the rendering of services or the delivery of goods.

Details To Be Furnished in MSME-1

  1. Supplier’s Name
  2. Supplier’s PAN
  3. The due amount against the rendering of services or supplies of goods
  4. Date from which the amount is due
  5. Reason/Causes for the delay in payment of the unpaid amount

Procedure

  • Firstly, every individual must identify their MSME registered suppliers and demand their certificate for registration.
  • If under the MSME Act, there are any such suppliers who are already registered and if for more than a time span of 45 days from the date of acceptance of the goods and services, the payments to them are due, then in Form MSME-1, details of such suppliers shall be furnished.

Consequences for Not-Filing or Non-Filing

If within 30 days any company knowingly furnishes any information or statistics which is incomplete or incorrect in any material respect or fails to file MSME-1, the company with a penalty fee which may even extend to twenty-five thousand rupees shall be punishable, and every company officer who is in default shall be condemned with fine which shall not be less than twenty-five thousand rupees but which may essentially extend to three lakh rupees, or with imprisonment for a term which can even extend to six months or with both.

[DISCLAIMER]: All the information mentioned in this document has been made on the basis of the Rules enacted in accordance with it, as well as requirements of the Companies Act of 2013. It is based on the interpretation through analysis of applicable laws as of date. The material in this document is not legal aid or a recommendation, and it is intended for generalized informational purposes only.

One should seek the advice of the legal counsel of their choice before acting upon any of the information mentioned in this document.

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