Outstanding Payments to MSEs: MCA Notifies Updated MSME Form I

On July 15, 2024, the Ministry of Corporate Affairs (MCA) notified the updated MSME Form I to be submitted by specified companies to the Registrar detailing outstanding payments to micro and small enterprises (MSEs).[1]

In 2018, the Ministry of Micro, Small and Medium Enterprises issued a notification requiring companies that received supplies of goods or services from MSEs and whose payments to MSE suppliers exceeded 45 days from the date of acceptance or the date of deemed acceptance to submit a half-yearly return to the MCA stating the amount due, along with reasons for the delay. This direction was made under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act).

Thereafter, in accordance with provisions of the Companies Act, 2013, the MCA came out with an Order on January 22, 2019, known as the Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019. Order 2 requires specified companies to furnish a return in MSME Form I with details of outstanding dues to MSE suppliers existing on the date of the notification, within 30 days. Order 3 mandates regular half-yearly returns in MSME Form I.

The updated MSME Form I now includes additional fields, such as the Foreign Company Registration Number (FCRN), the amount paid within and after 45 days, and the amount outstanding for fewer than or more than 45 days. It requires reporting of all outstanding amounts due for more than 45 days or liquidated after 45 days of acceptance of goods or services.

Further, the Amendment Order adds a proviso to Order 3 stating that only specified companies with pending payments to any MSE for more than 45 days from the date of acceptance or the date of deemed acceptance of the goods or services under Section 9 of the MSMED Act must furnish the information in MSME Form I.

[1] Changes have also been made to Form Nos. MGT-6 and BEN-2 through amendments to the Companies (Management and Administration) Rules, 2014, and the Companies (Significant Beneficial Owners) Rules, 2018. All these forms are available on the V3 portal.