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Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order

Form MSME-1 Bi-Annual Return: Statutory Reporting of Overdue Payments Beyond 45 Days to Micro & Small Vendors

Published: January 07, 20255 min readEffective: Half-Yearly Mandatory ComplianceDue: April 30 (for Oct-Mar) / October 31 (for Apr-Sep)

View Official Gazette / Govt Source Consult Senior Partner

Executive Regulatory Summary

Specified companies that procure goods or services from micro and small enterprises and have outstanding payments exceeding 45 days must file half-yearly Form MSME-1 with the ROC. Guidelines on reporting vendor UDYAM numbers, reasons for delay, compound interest computation under Section 16 of MSMED Act, and penalty provisions.

Key Statutory Takeaways

Bi-annual statutory filing: April to September due by October 31; October to March due by April 30.
Applies to all companies having dues outstanding beyond 45 days (or 15 days in absence of written agreement).
Mandatory disclosure of exact amount unpaid, vendor UDYAM registration number, and justification for delayed settlement.
Cross-matched by MCA and Income Tax authorities for disallowance under Section 43B(h).

Actionable Compliance Checklist for Businesses

Step-by-step advisory measures prescribed by ASGR and CO for immediate adherence:

1Reconcile trade payables aging schedule at the close of every half-year.

2Identify all registered Micro and Small enterprises using the MSME UDYAM portal verification tool.

3Compute statutory compound interest at three times the RBI bank rate for all invoices paid past 45 days.

4File Form MSME-1 electronically on the MCA V3 portal before the statutory bi-annual due dates.

1. Synchronization Between MCA MSME-1 and Direct Tax 43B(h)

Form MSME-1 is no longer an isolated secretarial form. The Income Tax Department now cross-references MSME-1 figures directly against Tax Audit Reports (Form 3CD Clause 22) and Section 43B(h) disallowances.

Target Entities Governed by this Notification:

Corporate Finance & Accounts Payable HeadsCompany Secretaries & Compliance ManagersStatutory AuditorsMSME Vendors Seeking Payment Remedies

Advisory Published By

CA Ghanshyam Sharma

Partner - Direct Tax & Audit • B. Com, FCA, Concurrent Bank Auditor

ASGR and CO, Chartered Accountants (Peer Review Certified: #018Xxx)

Statutory Disclaimer: This publication is compiled by ASGR and CO solely for general informational and educational purposes to assist corporate clients and peers in understanding statutory notifications. It does not constitute legal, tax, or formal secretarial advice. Before acting upon any provisions, specific professional counsel should be sought.

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