UNDERSTANDING FORM MSME-1: EVERYTHING YOU NEED TO KNOW Objectives of Form MSME-1 Form MSME-1 is a half-yearly return introduced by the Ministry of Corporate Affairs (MCA) with the primary objective of addressing delayed payments to vendors registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). The form serves to minimize losses and promote the overall growth of the MSME sector. Applicability of Form MSME-1 This form is applicable to specified companies that receive goods or services from micro or small enterprises. It is mandatory for companies whose payments to micro and small enterprise suppliers exceed forty-five days from the date of acceptance or deemed acceptance. Filing Deadlines Companies need to adhere to specific filing deadlines: For the period April to September, the due date is 31st October. For the period October to March, the due date is 30th April. Key Details to Include Companies filing Form MSME-1 must include essential details such as: Corporate Identification Number (CIN) and PAN of the company. Total outstanding amount for initial returns. Supplier details, including names, PAN, and due payment amount for both initial and half-yearly returns. Specific reasons behind payment delays. If entries exceed 99, multiple forms can be filed. Consequences for Non-Filing Non-filing of Form MSME-1 carries serious consequences: The company may face punishment and penalties under Section 405(4) of the Companies Act, 2013. Penalties may include fines, and officers in default may face imprisonment or fines ranging from Rs. 25,000 to Rs. 3,00,000. Conclusion Form MSME-1 underscores the government’s commitment to supporting the MSME sector. By mandating timely disclosures of outstanding payments, the form aims to protect the interests of MSME businesses and ensure their continued significance in India’s economic landscape.