Complete analysis of MCA Form MSME 1

[Sandeep Rawat]

Complete Analysis of MCA Form MSME 1

TYPE OF ENTITIES COVER UNDER MICRO AND SMALL ENTITIES

Every person including (Company, Partnership Firm, Association of Persons, Hindu Undivided Family, Co-Operative Society, Proprietorship etc.)

DEFINITION OF MSME:-

As per notification dated 22.01.2019 “Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order within thirty days from the date of publication of this notification.”

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:

Enterprises engaged in the manufacturing or production, processing or preservation of goods as specified, where investment in plant and machinery is as follows:

Enterprises engaged in the manufacturing or production, processing or preservation of goods as specified, where investment in plant and machinery is as follows:
MICRO	SMALL	MEDIUM
Does not exceed ₹ 25 lacs	More than ₹ 25 Lacs but doesn’t exceed ₹ 5 Crore	More than ₹ 5 Crore but doesn’t exceed ₹ 10 Crore

NOTE: Form MSME-1 is not applicable in case of Medium Enterprises.

SPECIFIED COMPANY AS PER NOTIFICATION MEANS

• Every Company “Public or Private” who Received Goods or Services 'from' Micro or Small Enterprises
• Whose Payment Due Or Not Paid Till 45 Days from the date of acceptance or the date of deemed acceptance of the goods or services

DEFINITION OF THE DAY OF ACCEPTANCE:

Explanation (i) to Section 2(b) of the Act provides that day of acceptance means:

• The day of the actual delivery of goods or the rendering of services; or
• Where any objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier

DEFINITION OF THE DAY OF DEEMED ACCEPTANCE:

Explanation (ii) to Section 2(b) of the Act provides that day of acceptance means the day of the actual delivery of goods or the rendering of services, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services.

As per these rules, Every specified companies are required to file MSME Form I with Roc in below mentioned different situations.

Two Type of Returns required filing by “Specified Companies” like:

• One Time Return
• Half Yearly Return

Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order within thirty days from the date of publication of this notification (“i.e., 22nd January, 2019”).

Every specified company shall file a return as per MSME Form I annexed to this Order, by 31st October for the period from April to September and by 30th April for the period from October to March.

LIMIT ON AMOUNT OF TRANSACTION WITH MSME

As per MSME Act, 2006; Limit of amount doesn’t matter to check whether payment made in 45 days or not

WHO ARE NOT REQUIRED TO FILE THE MSME FORM I.

• Companies who have no outstanding dues to Micro or small enterprises
• Companies who have outstanding dues to Micro or small enterprises less than 45 days

DUE DATES FOR FILLING “MSMSE FORM 1”

Every Company within 30 days from the date of the notification i.e 22nd February, 2019 (22nd January, 2019 + 30 days) is required to file this form as Initial Return.

Every company within 30 days from the last day of half year shall file regular half yearly return. Due date of subsequent returns is mentioned below:

• For Half year period ‘April to September’ – 31st October
• For half year period ‘October to March’ – 30th April

DETAILS AND DOCUMENTS TO BE ENCLOSED WITH THE FORM

INITIAL RETURN	REGULAR HALF YEARLY RETURN
Total outstanding amount,	Total outstanding due for the period and particulars of suppliers (PAN of Suppliers) therein for the periods
Details of suppliers and payments due (PAN of Suppliers)	Particulars of suppliers (PAN of Suppliers) therein for the periods
Reasons for delay in payment	Reasons for delay in payment

NOTE: Non-compliance of such provisions will lead to punishment and penalty under the provision of the Act.

CONSEQUENCES FOR NON FILING OF THE MSME FORM?

As per section 16 of MSME Act, if buyer make delay in payment more than 45 days in such case buyer is liable to pay compound interest with monthly restes to the supplier on that amount from the appointed day, at three times of the bank rate notified by RBI

PENALTY & FINE

Penalty Provision as per Section 405 (4) of the Companies Act, 2013, if the said details are not submitted to MCA on or before 20/02/2019 or the information submitted is incorrect or incomplete.

Fine

Company

– upto ₹ 25,000

Directors, CFO and CS

Imprisonment – up to 6 Months or 

Fine – not less than ₹ 25,000 upto ₹ 3,00,000 per person

For further clarification and professional assistance, feel free to contact at [email protected]

(Mr. Sandeep Rawat has vast experience & knowledge in dealing with Direct and Indirect Taxation.  He can be reached at  [email protected])

Linkedin:   https://www.linkedin.com/in/sandeep-rawat-6b12a8107/