The Ministry of Corporate Affairs (MCA),by notification dated 22nd of January 2019, notified the companies that have outstanding amounts to MSME enterprises to file the details of all current outstanding dues to the concerned Micro and Small Enterprises in Form MSME 1. The filing of such returns consists of two parts, namely initial returns (MSME-1) and half-yearly return (MSME-2).

Specified Enterprises

Specified Companies are required to file mandatorily Form MSME. Specified companies in this context, denotes all companies procuring goods or services from micro and small enterprises. More particularly, t is meant for those companies whose payment to the MSME hasn’t been made for more than forty-five days from the date of receiving of the goods or services. As per the notification, these companies are required to furnish a half-yearly return to MCA stating the details of the outstanding amount and the reasons for delay in payment to MSME enterprises.

Responsibilities of the Specified Companies

To start with, suppliers are required to be registered under the MSME Act. If they have been, and if payments to them are due for more than 45 days from the date of acceptance of the goods or services, the company would have to close the pending dues. Else they will required to file returns of the particulars of the liability, along with the reason for its delay in MSME Form 1. The particulars of liability should include:

• The total outstanding amount due on the 22^nd of January, 2019. It may be noted that this is a one-time return, which is to be submitted by the 30 June 2019.
• Name of the supplier.
• PAN of the supplier.
• Date on which the liability starts.

Micro and Small Classification

Micro and small enterprises include any class or classes of enterprises, whether proprietorship, Hindu Undivided Family (HUF), Association of Persons (AOP), co-operative society, partnership firm, company or undertaking or any other name assigned to it. If such entities are engaged in the manufacture or production of goods, it must satisfy the following conditions:

1. Micro enterprises – Manufacturing enterprises, with maximum investment of Rs. 25 lakhs and service sector entity with investments of Rs. 10 lakhs or lower are covered as micro enterprises.
2. Smal enterprises – Manufacturing enterprises, with investment between Rs. 25 lakhs to 5 crores and service sector entity with investments between. 10 lakhs to 2 crores are covered as small enterprises

Due Date Extension

The due date for filing Form MSME 1 has been extended, vide an MCA circular dated 21/2/2019. The previously determined period of thirty days would now be reckoned from the date the form is deployed on the MCA 21 portal.

Normally, the due date for filing Form MSME are:

Penalty for Non-Compliance

Any company defaulting under these provisions would be required to pay a fine of up to Rs. 25,000; whereas the defaults of a Director, CFO or CS would liable for an imprisonment term of up to six months or a fine ranging between Rs. 25,000 to Rs. 3,00,000.