MSME Form 1: Complete Guide to Filing, Deadlines & FAQs

Running a business means juggling multiple responsibilities customers, finances, operations, and compliance. Among these, one compliance that has gained significant importance in recent years is MSME Form 1. This filing is not just another checkbox to tick off; it directly impacts your company’s legal compliance, tax implications, and relationships with Micro and Small Enterprise (MSE) suppliers.

If your business deals with MSME vendors and payment delays occur, understanding MSME Form 1 is essential. This guide breaks down everything you need to know from meaning and eligibility to filing procedures, penalties, deadlines, and FAQs.

What is MSME Form 1? (Meaning & Purpose)

MSME Form 1 is an official reporting form introduced by the Ministry of Corporate Affairs (MCA) under Section 405 of the Companies Act, 2013. It requires companies to report all outstanding payments owed to Micro and Small Enterprises (MSEs) when the delay exceeds 45 days.

Purpose of MSME Form 1

The form exists to:

1. Promote Transparency

The government uses this data to monitor how companies handle payments to MSMEs and identify patterns of delayed payments.

2. Protect MSME Suppliers

Delayed payments hurt MSME cash flow. MSME Form 1 ensures companies stay accountable by reporting delays.

In Simple Words:

If your company owes money to an MSME supplier, and the payment has been pending for more than 45 days, you must report it in MSME Form 1.

Who Needs to File MSME Form 1?

Every company registered under the Companies Act, 2013 must file MSME Form 1 if:

✔ The company has taken goods or services from an MSME supplier, and

✔ Payment to the supplier is outstanding for more than 45 days, and

✔ There is at least one unpaid invoice as of the reporting period.

In short: If you have delayed payments >45 days, you must file.

Who Does NOT Need to File MSME Form 1?

You don’t need to file MSME Form 1 if:

• Your company has no transactions with MSME-registered suppliers.
• All payments were made within 45 days.
• You deal only with Medium Enterprises or non-MSME businesses.
• You are a sole proprietorship, partnership, or LLP (filing applies only to companies).

MSME Form 1 Filing Due Dates: April & October

MSME Form 1 is a half-yearly compliance. Here are the timelines you must remember:

❗ Important:

There are no extensions, and missing deadlines attracts penalties under Section 405 of the Companies Act.

How to File MSME Form 1: Step-by-Step Process?

Filing MSME Form 1 is done through the MCA V3 portal. Here’s a detailed step-by-step guide:

Step 1: Collect Required Documents

Gather the following:

• List of all MSME suppliers
• Udyam Registration Numbers (URN)
• Invoice numbers, dates, and amounts
• Days of delay calculation
• Reasons for delay
• Company’s Digital Signature Certificate (DSC)

Step 2: Login to the MCA Portal

• Visit the official MCA21 V3 portal
• Login with your corporate user credentials
• Navigate to ‘Company E-Filing’

Step 3: Download MSME Form 1

• Go to ‘Compliance Services’
• Download the latest MSME Form 1 (format updated in mid-2024)

Step 4: Fill in Required Details

You will need to enter:

• Company Identification Number (CIN)
• Company PAN
• Contact details
• Reporting period (April–Sept / Oct–March)
• Vendor details:
  • Supplier name
  • PAN
  • Udyam Registration Number
  • Invoice details
  • Amount outstanding
  • Number of days delayed
  • Reason for delay

Step 5: Attach DSC

• Validate the form
• Sign it using the Director’s or Company Secretary’s DSC

Step 6: Upload the Form

• Upload the completed form on the MCA portal
• Receive the SRN (Service Request Number) for tracking

Step 7: Save Acknowledgment

Download and store:

• Filed form copy
• SRN acknowledgment

Maintain these for audit and compliance reviews.

Documents Required for MSME Form 1 Filing

To ensure smooth filing, keep these ready:

• CIN
• PAN
• Company contact details
• MSME supplier details
• Invoice and payment records
• Udyam Registration Numbers
• DSC of director or authorized signatory

Eligibility Criteria for Filing MSME Form 1

A company must meet two conditions simultaneously:

It must have transactions with MSME-registered suppliers

Payment must be pending beyond 45 days

If either is missing, the form is not mandatory.

Understanding the 45-Day Payment Rule (Section 43B(h))

This rule plays a critical role in MSME compliance.

With Written Agreement

Payment must be made within 45 days.

Without Written Agreement

Payment must be made within 15 days.

Tax Impact

Payments delayed beyond the allowed period are not tax deductible until actually paid.

Example:

If you purchase goods worth ₹5 lakh in February and pay:

• Before mid-April (within 45 days) → Deductible in same FY
• In May → Deduction allowed next FY only

This rule ensures timely payments to MSMEs.

Difference Between MSME Form 1 & Udyam Registration

Summary:
MSME file the Udyam.
Companies file the MSME Form 1.

MSME Form 1 Penalties for Late Filing

Non-compliance is taken seriously. As per Section 405(4):

No filing fee is charged, but heavy penalties apply for delays.

Common Mistakes to Avoid When Filing MSME Form 1

• Reporting non-MSME suppliers
• Incorrect invoice details
• Wrong Udyam Registration Numbers
• Ignoring the V3 portal’s updated requirements
• Filing without DSC
• Missing deadlines
• Skipping NIL filing (mandatory in V3)

Avoid these to ensure smooth compliance.

Why Filing MSME Form 1 Matters?

• It’s a legal obligation
• Protects your company from penalties
• Maintains good vendor relationships
• Helps in audit transparency
• Aligns with Section 43B(h) tax requirements
• Builds business credibility

Consequences of Not Filing MSME Form 1

• Heavy penalties up to ₹3 lakh
• Directors held personally liable
• Negative compliance history
• Audit objections
• Risk of losing government contract eligibility

FAQs on MSME Form 1 Filing

Q1. Do we need to file MSME Form 1 if all payments are made within 45 days?

No, filing is required only when payments exceed 45 days as on the reporting date.

Q2. What if payment is delayed beyond 45 days but cleared before March 31?

Under the old V2 rules filing was not necessary.
But in the new V3 portal some companies must still report the transaction. Consult your compliance expert.

Q3. Is DSC mandatory for filing MSME Form 1?

Yes, filing without DSC is invalid.

Q4. What is Udyam Registration Number?

A 12-digit number issued to MSMEs during Udyam registration.
Companies must collect this from vendors.

Q5. Is there any filing fee for MSME Form 1?

No. Filing is free, but penalties apply for late filing.

Q6. Do we need to file NIL return?

On the V3 portal, yes, NIL filing is mandatory.

Q7. Can we file a corrected MSME Form 1?

Yes. You can resubmit with correct details if errors are found.

Q8. Does filing MSME Form 1 impact tax deduction?

Indirectly delayed payments beyond 45 days affect tax deduction under Section 43B(h).

Q9. What are the key differences between V2 and V3 portals?

V3 requires:

• Reporting of both outstanding and paid MSME invoices
• More detailed supplier data
• Better transparency for government tracking

Q10. Who can help with MSME Form 1 filing?

• Company secretary
• Chartered Accountant
• MSME consultants
• Professional filing services like StartupFlora

How StartupFlora Helps with MSME Form 1 Compliance?

At StartupFlora, we simplify compliance by helping companies:

• Identify MSME suppliers
• Track payment timelines
• Prepare error-free returns
• File MSME Form 1 on time
• Avoid penalties
• Maintain proper audit records
• Stay updated with V3 changes

Final Thoughts

MSME Form 1 may seem like a small compliance form, but it carries huge implications. Filing it accurately and on time protects your business from penalties, improves vendor relationships, and ensures legal transparency.

The deadlines 30 April and 31 October should be marked clearly on your compliance calendar.

If you’re unsure or want end-to-end assistance, StartupFlora is here to help.
We make compliance simple, so you can focus on what truly matters growing your business.