To safeguard the interests of Micro and Small Enterprises (MSEs), the Ministry of Corporate Affairs (MCA) mandates that every company registered in India — including One Person Companies (OPCs), Private Limited Companies, Section 8 companies, and others — must file Form MSME-1 if it has outstanding payments to MSE suppliers exceeding 45 days. This requirement aligns with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 and Section 405 of the Companies Act, 2013, promoting prompt payment cycles and financial transparency in corporate dealings.
What is Form MSME-1?
Form MSME-1 is a half-yearly return filed by companies to disclose details of any outstanding dues to Micro or Small Enterprise suppliers that remain unpaid for more than 45 days after acceptance or deemed acceptance of goods or services. This filing is crucial to ensure timely payments to MSME vendors and prevent delays that adversely impact their cash flow and operations.
Recent Updates in MSME-1 Filing (March 2025)
In March 2025, MCA introduced a revised MSME-1 Form on the MCA V3 portal, enhancing the reporting requirements for companies. According to the Ministry of MSME notification dated 25 March 2025, the updated form now requires companies to provide detailed disclosures, including:
- Payments made within 45 days
- Payments made after 45 days
- Outstanding dues categorized by duration (less than 45 days and more than 45 days)
- Reasons for any delayed payments beyond the 45-day window
This change, effective immediately, aims to increase corporate accountability and ensure that MSMEs receive timely payments, thus strengthening the MSME sector’s financial health.
Who Must File Form MSME-1?
Form MSME-1 filing is mandatory for:
- All companies registered under the Companies Act, 2013 (and earlier Companies Acts)
- Companies that have purchased goods or services from Micro or Small Enterprises
- Companies with outstanding payments to MSME suppliers exceeding 45 days from the date of acceptance or deemed acceptance
Note: Medium Enterprises are excluded from this compliance requirement.
MSME-1 Filing Timeline
| Period Covered | Due Date for Filing MSME-1 |
|---|---|
| April to September | On or before 31st October each year |
| October to March | On or before 30th April each year |
Key Disclosures Required in MSME-1
- Name and PAN of MSME suppliers
- Amount due and corresponding payment dates
- Outstanding amount as of the filing date (categorized by less than or more than 45 days)
- Explanation for any payments delayed beyond the 45-day threshold
Penalties for Non-Compliance
Failure to file Form MSME-1 or furnishing incorrect/incomplete information attracts strict penalties under Section 405(4) of the Companies Act, 2013:
- Company Penalty: Fine up to Rs. 25,000
- Officers in Default: Imprisonment up to 6 months and/or fine ranging from Rs. 25,000 to Rs. 3,00,000
Timely and accurate filing is critical to avoid legal consequences.
How Can CertificationsBay Assist You?
CertificationsBay offers end-to-end assistance for MSME-1 filings, including:
- Identifying eligible MSME creditors within your company
- Verifying and calculating the 45-day payment timelines
- Preparing precise and compliant MSME-1 disclosures
- Filing the form accurately on the MCA V3 portal within stipulated deadlines
- Advising on best practices to maintain compliance and avoid penalties
Why MSME-1 Compliance Matters
The MSME-1 return is not merely a regulatory obligation but a vital compliance mechanism that fosters a responsible business environment and supports the growth of MSMEs, which form the backbone of India’s economy. The latest revisions in the MSME-1 form enhance transparency and ensure that companies uphold their financial commitments promptly.
With the revised filing requirements effective from 2025 onwards, it is imperative for all companies to closely monitor outstanding dues to MSME suppliers and submit accurate half-yearly returns in accordance with the Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019, as amended on 15 July 2024.
FAQs on MSME-1 Filing
Q1. What is the purpose of Form MSME-1?
Form MSME-1 facilitates the disclosure of outstanding payments to Micro and Small Enterprise suppliers that are overdue beyond 45 days, promoting timely payments and financial transparency.
Q2. Which companies are required to file MSME-1?
All companies registered under the Companies Act, 2013 that have outstanding payments to MSMEs exceeding 45 days must file MSME-1. Medium enterprises are excluded.
Q3. How often must Form MSME-1 be filed?
The form must be filed twice annually — by 31st October for April–September period and by 30th April for October–March period.
Q4. What are the penalties for non-filing or incorrect filing?
Companies may face fines up to Rs. 25,000, while officers responsible may face imprisonment up to 6 months and/or fines up to Rs. 3,00,000.
Q5. How can CertificationsBay help with MSME-1 compliance?
We assist in identifying MSME dues, preparing disclosures, and ensuring timely and accurate filing to avoid penalties and ensure regulatory adherence.
