The MSME Return form or MSME-1 form was introduced in January 2019 by the government to track the amount unpaid by companies for more than 45 days for goods bought from MSMEs and address the delayed payment issue. The half-yearly form is required to be filed by buyers by October 31 for the April to September period and again by April 30 for the period October to March every year.
In July this year, the government had revised the form to seek additional details from the buyer for the outstanding payment. The earlier form required buyers, also referred to as specified companies for delaying payments, to share information on the amount due, the date from which it is due and the reason for the delay under the Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019.
The revised form in July, however, sought additional details such as the amount paid within 45 days through the invoice discounting platform TReDS or other payment mode, amount paid after 45 days, amount outstanding for 45 days or less and amount outstanding for over 45 days other than the reason for the delay in payment or outstanding amount and name and PAN of the MSE supplier.
MSME-1 form has to be digitally signed by either the director, managing director, manager, company secretary, CFO, CEO or any other authorized representative of the company. Also, the director identification number of the director or managing director or DIN or PAN of the manager or CEO or CFO or authorized representative is required.
Failing to comply with the submission deadline attracts a penalty of Rs 20,000 by the company and every officer in default. The penalty amount increases to Rs 1,000 per day and up to Rs 3 lakh for subsequent failures.
As of October 11, 2024, 2.09 delayed payment applications involving Rs 46,595 crore were filed by micro and small enterprises, of which only 19,388 applications involving Rs 2,459 crore were mutually settled and 41,909 involving Rs 6,970 crore were disposed, according to the data from the MSME Samadhaan portal.