What is MSME-1 form to address delayed payments challenge of MSMEs?

What is MSME-1 form to address delayed payments challenge of MSMEs?

The issue of delayed payments has been among the biggest challenges faced by MSMEs that inhibit businesses’ working capital flow and competitiveness in the market to tap new opportunities and fulfil orders.

The issue of delayed payments has been among the biggest challenges faced by MSMEs that inhibit businesses’ working capital flow and competitiveness in the market to tap new opportunities and fulfil orders.

Since October 2017, 1.68 lakh complaints have been filed by enterprises involving nearly Rs 40,000 crore payment delayed, of which 33,313 cases involving Rs 5,813 crore have been disposed so far.

Since October 2017, 1.68 lakh complaints have been filed by enterprises involving nearly Rs 40,000 crore payment delayed, of which 33,313 cases involving Rs 5,813 crore have been disposed so far.

In order to track dues outstanding by companies and address the late payment issue faced by MSMEs, the government in January 2019 introduced the MSME return form or MSME-1 form.

In order to track dues outstanding by companies and address the late payment issue faced by MSMEs, the government in January 2019 introduced the MSME return form or MSME-1 form.

Companies who fail to pay MSMEs in 45 days from the date of acceptance or deemed acceptance of the goods or services need to file the half-yearly MSME-1 return form citing the reason for the delay and the amount due.

Companies who fail to pay MSMEs in 45 days from the date of acceptance or deemed acceptance of the goods or services need to file the half-yearly MSME-1 return form citing the reason for the delay and the amount due.

The return has to be filed by October 31 for the April to September period and again by April 30 for the period October to March every year.

The return has to be filed by October 31 for the April to September period and again by April 30 for the period October to March every year.

Failure to file the form invites a penalty of Rs 20,000 by the company and every involved in default. Subsequent failures lead to Rs 1,000 per day and up to Rs 3 lakh.

Failure to file the form invites a penalty of Rs 20,000 by the company and every involved in default. Subsequent failures lead to Rs 1,000 per day and up to Rs 3 lakh.

Among the details required to fill the form are CIN, PAN, supplier (MSME seller) details including name and PAN, date from which the amount is due, amount due details, and reason for the delay in payment.

Among the details required to fill the form are CIN, PAN, supplier (MSME seller) details including name and PAN, date from which the amount is due, amount due details, and reason for the delay in payment.

The online form, available on the portal of Corporate Affairs Ministry, has to be digitally signed by the director or manager or secretary or CEO or CFO of the company.

The online form, available on the portal of Corporate Affairs Ministry, has to be digitally signed by the director or manager or secretary or CEO or CFO of the company.

If the designation selected is director, DIN also has to be provided whereas if the designation selected is secretary, then membership number is to be provided in case of other than Section 8 company.

If the designation selected is director, DIN also has to be provided whereas if the designation selected is secretary, then membership number is to be provided in case of other than Section 8 company.

In the case of a Section 8 company and if the designation is selected as company secretary, then either the membership number or PAN is required.

In the case of a Section 8 company and if the designation is selected as company secretary, then either the membership number or PAN is required.

Image source : Pixabay

Image source : Pixabay