Mandatory Submission details of all outstanding dues to MSME suppliers by Specified Companies

With a spate of corporate irregularities coming to the fore, the Centre has decided to make disclosure norms more stringent. Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers)

Recently MCA has passed ‘Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019′.

As per the order, Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order within thirty days from the date of publication of this notification. The Same been later extended to thirty days from the date of deployment of Form on MCA website vide General Circular No. 01/2019 dated 21.02.2019.

All companies — other than Government companies —Every specified company shall file a return as per MSME Form I annexed to this Order, by 31st October for the period from April to September and by 30th April for the period from October to March.

The reporting requirement is expected to continue in the coming years as well. Already, there is a strict reporting regime for companies Furnishing of information about payment to micro and small enterprise suppliers. Critics, however, see the latest MCA move as a part of ‘surveillance capitalism’, a phenomenon that is widespread in the Western world and which is gaining currency in other parts of the globe.

How can a company determine that the firm to whom payment is due is an MSME or not

Since the criteria of Small and Medium concern is based on turnover, hence, no corporate can determine the status of another firm is a small, medium or large concern, hence, the only way out to determine is to get a written declaration via post or via mail from the creditors about their status and should submit the declaration accordingly with Ministry.

Type of entities covered under Micro and Small entities;

  • Company,
  • Partnership Firm,
  • Association of Persons,
  • Hindu Undivided Family,
  • Co-Operative Society,
  • Proprietorship etc.

Moreover following is the reference chart from where one can determine whether a firm/Company come under the MSME sector or not:

Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten  crore rupees
Service Sector
Enterprises Investment in equipment
Micro Enterprises Does not exceed ten lakh rupees:
Small Enterprises  More than  ten lakh rupees but does not exceed two crore rupees
Medium Enterprises  More than two crore rupees but does not exceed five crore rupees

Recently MCA has been asked to file a one-time return covering all such outstanding receipts of money or loans from April 1, 2014, to January 22, 2019

Purpose of the MSME FORM 1 – Outstanding Due 

As per the above notification, every specified company (whose payment is due or not paid within 46 days) dealing with MSME shall mandatorily file a return with MCA in e-form MSME-1.

One Time Return 

Due date to file within 30 days of publication of these rules i.e. 20th February 2019 from the notification date (i.e. 22nd January 2019 + 29 days)

Extension for the last date of filing an initial return in MSME Form 1

Information required for with e-form

  • Particulars of Supplier
  • Financial years
  • Name & Pan No
  • Amount due & date from which the amount due etc
  • Reasons for the delay

* Total outstanding amount due as on 22.01.2019

Half Yearly Return & Due Date

  1. For half year period ‘October to March’ – 30th April
  2. For Half year period ‘April to September’ – 31st October

Why there are hue and cry in the month of January then:

Since the notification has been issued by the Ministry regarding submission of information regarding their dues pending for more than 45 days to MSME sectors/ Firms within 30 days of issue of such notification by the Ministry. And, since the notification has been issued on 22.01.2019, hence, all companies need to file the information within 30 days of notification i.e. till 21.02.2018. Therefore, the companies need to have a thorough check on all such payments and to determine which are the pending payment for more than 45 days

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Summary
Mandatory Submission details of all outstanding dues to MSME suppliers by Specified Companies
Article Name
Mandatory Submission details of all outstanding dues to MSME suppliers by Specified Companies
Description
As per the order, Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order within thirty days from the date of publication of this notification.