The Ministry of Corporate Affairs (MCA), through Notification No. S.O. 1376(E) dated 25th March 2025, has made it mandatory for companies procuring goods or services from Micro and Small Enterprises (MSEs) to submit a half-yearly return in Form MSME-1 if payments exceed 45 days from the date of acceptance or deemed acceptance.
This directive aims to enforce financial discipline, enhance liquidity for MSEs, and strengthen the overall business ecosystem by addressing delayed payments.
Applicability: Who Must File Form MSME-1?
All companies purchasing from MSEs (excluding medium enterprises) must comply.
Filing is compulsory if payment delays exceed 45 days from the date of acceptance or deemed acceptance.
Ensuring accurate payment tracking is crucial to avoid non-compliance penalties.
Essential Information Required for MSME-1 Filing
Supplier Name & PAN (Mandatory for all MSEs reported)
Number of transactions with each MSE supplier
Mode of payment (Through TReDS or Other mode)
Amount Paid & Outstanding Details:
Paid within 45 days
Paid after 45 days
Outstanding for 45 days or less
Outstanding for more than 45 days
Reason for delayed payments (if applicable)
Mandatory Filing Deadlines
| Due Date | Period Covered |
|---|---|
| 30th April | October - March |
| 31st October | April - September |
Late filing or non-compliance may attract penalties, making it critical for businesses to file on time.
Business Implications of MSME-1 Compliance
Regulatory Penalties: Failure to comply may result in financial and legal consequences.
Stronger Supplier Relationships: Timely payments enhance trust and long-term business partnerships.
Enhanced Financial Planning: Structured payment tracking fosters better cash flow management.
Operational Adjustments: Companies must set up robust monitoring systems for MSE payments.
Step-by-Step Compliance Plan
To avoid last-minute delays, companies should complete the following steps before the due date:
MSME-1 Compliance Checklist
✔ Identify all transactions with MSE suppliers
✔ Verify payments exceeding 45 days from acceptance date
✔ Gather Supplier Details (Name & PAN)
✔ Categorize payments as per MCA reporting guidelines
✔ Record payment delays and reasons (if applicable)
✔ Complete the attached MSME Excel Sheet with accurate data
✔ Submit the Excel Sheet by 15th April for timely filing
✔ Review all details for accuracy to prevent errors
Companies must proactively manage their obligations, ensuring compliance with MCA regulations to mitigate risks and uphold responsible corporate governance.
