While the government has revised Section 43B of the Income Tax Act to encourage buyers for payment to MSMEs within 45 days, here’s what MSME-1 form for buyers and the penalties involved in late clearance of dues:

While the government has revised Section 43B of the Income Tax Act to encourage buyers for payment to MSMEs within 45 days, here’s what MSME-1 form for buyers and the penalties involved in late clearance of dues:

Jun 10, 2024

Mohammed Ramees

Introduced in January 2019 for buyers who fail to pay MSMEs within 45 days. Companies need to file it half-yearly citing the reason for the delay and the amount due

Companies filing the form for delayed payments are called ‘Specified Companies’ under Section 405 of the Companies Act, 2013

The form has to be submitted by Oct 31 for April-Sept period and again by April 30 for Oct-March period

Inability to submit the form invites a penalty of Rs 20,000 by the company. Subsequent failures lead to Rs 1,000 per day and up to Rs 3 lakh

Details required to fill the form: Corporate Identity Number (CIN), PAN, supplier (MSME seller) details including name and PAN, date from which the amount is due, amount details, reason for delay

The online form from Corporate Affairs Ministry website has to be e-signed by the director or manager or secretary or CEO or CFO of the company

If the designation selected is director, DIN to be provided. In case of secretary, membership number to be provided in case of other than Section 8 company

For Section 8 companies and if the designation is selected as company secretary, then membership number or PAN is required

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