Introduction

To ensure timely payments to Micro and Small Enterprises (MSEs), the Government of India mandates companies to regularly disclose delays in vendor payments through Form MSME-1.

Under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, any company that owes dues to registered MSME vendors for more than 45 days must report the details to the Registrar of Companies (ROC).

In this guide, Bisways Consulting Group explains the purpose, filing process, due dates, and penalties related to Form MSME-1 compliance.

What Is Form CSR-1?

Form MSME-1 is a half-yearly return introduced by the Ministry of Corporate Affairs (MCA) requiring companies to furnish details of:

• Outstanding payments to MSME suppliers beyond 45 days, and

• The reasons for such delays.

The objective is to promote financial discipline and ensure that micro and small businesses are paid promptly.

Who Needs to File Form MSME-1?

Filing is mandatory for all companies — Private Limited, Public Limited, and OPC — that:

• Have outstanding dues to MSME-registered suppliers exceeding 45 days from the date of acceptance of goods or services.

• Have purchased goods or services from suppliers registered under the MSME Act, 2006.

⚠ Note: Even if the company has no pending dues, it is recommended to maintain internal records to demonstrate compliance in case of audit or inspection.

Information to Be Reported in MSME-1

• Total outstanding amount due to MSME suppliers.

• Number of suppliers involved.

• Total value of supplies made by such vendors.

• Payment delay reasons (if any).

• Details of responsible directors and authorised signatories.

🧮 Required Attachment: A declaration signed by the company director confirming the accuracy of outstanding balances.

Step-by-Step MSME-1 Filing Process

• Login the MCA Portal with company credentials.

• Download Form MSME-1 from the e-forms section.

• Enter CIN, company name, and contact details.

• Provide details of delayed payments and the corresponding vendor data.

• Attach declaration and supporting documentation.

• Digitally sign using Director’s DSC and CA/CS certification.

• Pay the ROC filing fees (as per company capital).

• Submit and download the SRN acknowledgement for records.

Penalties for Non-Compliance

If a company fails to file Form MSME-1 on time:

• Penalty under Section 405(4) of Companies Act, 2013.

• ₹25,000 on the company, plus ₹25,000–₹3,00,000 on each officer in default.

• Interest under Section 16 of the MSMED Act

• Penalty under Section 405(4) of Companies Act, 2013:

• 3 times the RBI bank rate for delayed payment to MSME suppliers.




⚠ Delayed reporting can also impact company credit ratings and vendor relationships.

Conclusion

Form MSME-1 is an important compliance measure to safeguard small suppliers and promote timely business payments.

By filing accurately and within due dates, companies uphold transparency and avoid penalties while supporting the MSME ecosystem.

Bisways Consulting Group assists businesses with MSME-1 data reconciliation, ROC filings, and end-to-end compliance management.