Form MSME-1: The Half-Yearly Return Companies Keep Forgetting
Priya Sharma
· Corporate Legal & Compliance Counsel· 3 min read
MSME-1 is a short form with an awkward feature: it requires a company to disclose its own delayed payments to small suppliers, with reasons, to a public register. Many companies simply do not file it, which is itself a reportable default.
- ✓Required where payment to a micro or small supplier exceeds forty-five days.
- ✓Filed for the half-years ending 30 September and 31 March.
- ✓Due by 31 October and 30 April respectively.
- ✓Applies to companies only, not to firms or proprietorships.
Who must file
Every company that receives goods or services from a micro or small enterprise and whose payment exceeds forty-five days from the date of acceptance or deemed acceptance.
It applies to companies registered under the Companies Act. Partnership firms, LLPs and proprietorships are outside it, though they remain subject to the MSMED Act's payment and interest provisions.
What is reported
The amount of payment due, the date from which it has been outstanding, the supplier's name and PAN, and the reasons for the delay.
The requirement to state reasons is what makes the form uncomfortable. Vague answers are common; the form nonetheless creates a documented admission that dues were outstanding beyond the statutory period.
Timing
For the half-year April to September, the return is due by 31 October. For October to March, by 30 April.
The reporting is of amounts outstanding as at the end of the half-year, so it is a point-in-time snapshot rather than a record of everything that was ever late during the period.
Why it matters beyond the filing
The same information feeds the Section 22 disclosure in the annual financial statements, and overlaps with the Section 43B(h) analysis the tax computation requires.
Running one exercise that produces all three outputs — the MSME-1 return, the Section 22 disclosure and the 43B(h) schedule — is considerably less work than treating them separately, and it requires the vendor master to carry Udyam classification.
Frequently asked questions
### Who must file MSME-1?
Every company with outstanding payments to micro or small suppliers exceeding forty-five days from acceptance. Partnerships, LLPs and proprietorships are outside the requirement, though the underlying MSMED obligations still apply to them.
### When is MSME-1 due?
By 31 October for the half-year ending 30 September, and by 30 April for the half-year ending 31 March. It reports amounts outstanding at the end of the period.
### What if we have no overdue MSME payments?
No return is required if there are no outstanding amounts beyond forty-five days at the reporting date. Keeping the working that demonstrates this is worthwhile, because it also supports the Section 22 disclosure and the 43B(h) position.
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Frequently Asked Questions
Who must file MSME-1?
Every company with outstanding payments to micro or small suppliers exceeding forty-five days from acceptance. Partnerships, LLPs and proprietorships are outside the requirement, though the underlying MSMED obligations still apply to them.
When is MSME-1 due?
By 31 October for the half-year ending 30 September, and by 30 April for the half-year ending 31 March. It reports amounts outstanding at the end of the period.
What if we have no overdue MSME payments?
No return is required if there are no outstanding amounts beyond forty-five days at the reporting date. Keeping the working that demonstrates this is worthwhile, because it also supports the Section 22 disclosure and the 43B(h) position.
Priya Sharma
Corporate Legal & Compliance CounselSpecializing in commercial contract litigation, Section 138 NI Act recovery, commercial property leases, and MSMED Act compliance.