MSME Form 1 is the half-yearly return that a company files with the Ministry of Corporate Affairs (MCA) when it owes money to micro or small enterprise suppliers for more than 45 days after acceptance of goods or services. It is filed under section 405 of the Companies Act, 2013 and a Government order issued under it. This page explains who must file, the 31 October and 30 April due dates, what the revised form asks for, the penalty position and the practical checks that stop a filing from being wrong.
What is MSME Form 1?
Micro and small enterprises depend on timely payment for working capital, and delayed payment by larger buyers has been a long-standing complaint. To create transparency, the Government required certain companies to disclose their outstanding payments to micro and small suppliers directly to the MCA. That disclosure is MSME Form 1, filed through the MCA portal.
The obligation sits in section 405 of the Companies Act, 2013, which lets the Central Government require companies to furnish information about dues to small enterprises. The Government used this power in its Order of 2019, and an amending Order came into force on 15 July 2024. A company that is a 'specified company' under this Order has to file; the amendment narrowed the position so that only companies with payments pending beyond 45 days to micro or small suppliers need to file for the period.
A specified company is one that gets goods or services from micro or small enterprises and whose payment to them exceeds 45 days from the date of acceptance or deemed acceptance. If every micro and small supplier was paid within 45 days in the half-year, our reading is that there is nothing to report for that period. Medium enterprises are outside the scope, because the Order covers micro and small suppliers only.
The form is separate from the company's own books and from the Udyam record kept by the supplier. It is a statutory disclosure, and its figures should agree with the creditors ledger, the notes to accounts on dues to micro and small enterprises and the figures used for income tax.
Who needs to file MSME Form 1?
The filing is triggered by the facts of the half-year, not by the size or type of the company. You are likely to need it if:
- Your company bought goods or services from a micro or small enterprise supplier during the half-year
- Any amount to such a supplier remained unpaid for more than 45 days from acceptance or deemed acceptance
- You are a private or public company, including a subsidiary or a start-up company, buying from small vendors
- The delay related to a supplier that is registered as a micro or small enterprise on the Udyam portal
- You are unsure whether a supplier qualifies and have not collected its Udyam registration details
Benefits of MSME Form 1 Return
Statutory compliance
Filing within the due date keeps the company clear of section 405 default, which carries a penalty on the company and on each officer in default.
A cleaner payables process
Preparing the return forces a review of vendor ageing. Many companies discover Udyam-registered vendors they had not tagged in the accounting software.
Better supplier relations
Documented ageing and recorded reasons for delay help procurement teams settle disputes before they become formal claims.
Alignment with tax and accounts
The same ageing data supports the disclosure of dues to micro and small enterprises in the financial statements and the tax position on delayed payments.
Applicability and conditions
Before you start, settle these points so that the return reflects the supplier-wise position:
- Identify all suppliers that are micro or small enterprises, using their Udyam registration certificate and the classification as on the date of supply
- Fix the date of acceptance or deemed acceptance of each invoice, because the 45 days run from that date
- Confirm whether the supplier agreed a shorter credit period in writing, since the MSMED Act ties the limit to the agreed period but never beyond 45 days
- Collect PAN of each supplier, which the revised form asks for
- Check that the filing director's DSC is valid and that the company's MCA login is working on the V3 portal
Documents required
Supplier and payment data
- Supplier-wise ledger with invoice dates, acceptance dates and payment dates for the half-year
- List of micro and small enterprise suppliers with name, PAN and Udyam registration number
- Details of payments made through TReDS or other modes, with number and amount
- Ageing report showing amounts outstanding up to 45 days and beyond 45 days
Explanatory and reconciliation papers
- Reasons for delay, such as disputed quality, documentation gaps or cash-flow constraints, recorded per supplier
- Reconciliation of the ageing with the creditors balance in the books
- Copies of any written agreement on credit period with the supplier
Company and signing documents
- Digital Signature Certificate of the authorised director
- MCA V3 portal login of the company
- Previous half-year return and challan, for consistency of figures
Step-by-step MSME Form 1 filing process
The work is mostly in preparing the data. The portal step is straightforward once the supplier-wise table is final.
Tag micro and small suppliers
Go through the vendor master and mark every vendor that holds a micro or small Udyam registration. Check the registration on the Udyam portal rather than relying on the vendor's word. See MSME / Udyam registration for how classification works.
Extract ageing from acceptance date
Run the payables ageing from the date of acceptance or deemed acceptance, not the invoice date. Mark each invoice paid within 45 days, paid later, outstanding up to 45 days or outstanding beyond 45 days.
Decide whether you are a specified company for the half-year
If at least one micro or small supplier remains unpaid beyond 45 days, prepare the return. If none does, record the working papers on file and note the conclusion.
Record reasons for delay
The revised form asks for reasons. Write them clearly, because the entries become part of the MCA record and can be questioned.
Fill the form on the MCA V3 portal
Log in, open MSME Form 1 and enter supplier name, PAN, payments within 45 days, payments after 45 days, amounts outstanding and reasons.
Attach DSC and submit
Sign with the authorised director's DSC and submit before 31 October for April to September or 30 April for October to March.
Keep the acknowledgement and reconcile
Download the SRN and acknowledgement. File the working papers with the accounts, so the auditor can tie the return to the notes on dues to micro and small enterprises.
Government fees
We could not confirm a fixed filing fee for MSME Form 1 on the MCA V3 portal, so no figure is stated here. The portal shows the applicable fee, if any, before payment.
Professional charges are quoted separately after reviewing your case. Government fees are paid directly to the authority.
Due dates and how long preparation takes
The two due dates are fixed by the Order and fall on 31 October for the half-year ending 30 September and on 30 April for the half-year ending 31 March. For the April to September 2026 half-year the due date is therefore 31 October 2026. Preparation time depends on how clean the vendor master is; companies without Udyam tagging usually need more time.
| Stage | Typical time |
|---|---|
| April to September half-year | Due by 31 October |
| October to March half-year | Due by 30 April |
| Data extraction and ageing | Varies with ledger quality |
| Portal filing | Same day once data and DSC are ready |
Frequency and period covered
MSME Form 1 repeats every half-year. Each return covers one half-year and reports the position for that period, so the October filing and the April filing are independent. A company that has no dues beyond 45 days to micro or small suppliers in a half-year has no filing for that half-year under the 2024 position, but should keep its ageing papers to show why.
Compliance linked to MSME payments
- Disclose dues to micro and small enterprises in the notes to the financial statements, as required in the accounts
- Pay interest due under section 16 of the MSMED Act on delayed payments, or document why it is not payable
- Review the income tax effect of unpaid MSE dues under the deduction rule linked to payment in the time limit
- Keep Udyam certificates of suppliers on file and refresh classification checks yearly
- File ROC annual filing forms with figures consistent with the MSME return
- Maintain a half-yearly calendar so that the 30 April and 31 October dates are not missed
Common mistakes & rejection reasons
Counting 45 days from the invoice date
The limit runs from acceptance or deemed acceptance of goods or services. Using the invoice date overstates or understates delay and creates mismatches.
Missing Udyam-registered suppliers
Vendors register on Udyam after onboarding, and many companies never update the master. Untagged suppliers mean an incomplete return.
Skipping the filing because the company is mid-sized
The test is the supplier's size and the age of the dues, not the buyer's size. Large and small companies are both covered.
Vague reasons for delay
Entries like 'processing' or 'NA' invite scrutiny. Give the actual reason, such as a quality dispute or pending documentation.
Treating this as a one-time filing
It is a recurring half-yearly obligation, and a missed April return is a separate default from a missed October return.
Not reconciling to the accounts
Figures in MSME Form 1 that differ from the notes on dues to micro and small enterprises in the audited accounts raise audit and ROC questions.
Penalties for non-compliance
Section 405(4), as substituted by the Companies (Amendment) Act, 2020, provides a penalty on the company and on every officer in default. The figures below come from a secondary summary of the amended provision and should be checked against the Act. Separately, the MSMED Act provides compound interest on delayed payment to micro and small suppliers.
| Default | Consequence | Provision |
|---|---|---|
| Failure to file the return (company and each officer in default) | ₹20,000 each, plus ₹1,000 per day of continuing failure, up to ₹3 lakh | Section 405(4), Companies Act, 2013 (secondary source; verify) |
| Delayed payment to a micro or small supplier | Compound interest at three times the RBI bank rate on the unpaid amount | Sections 15 and 16, MSMED Act, 2006 |
Practitioner tips
- Add the Udyam number and PAN fields to your vendor master at onboarding. The half-yearly return then becomes a report instead of a research project.
- Run the ageing report twenty days before the due date and chase approvals on the disputed invoices. Paying inside 45 days is cheaper than filing and paying interest.
- Check whether the supplier's Udyam classification was micro or small on the date of supply. A vendor that has since moved to medium status may still have been small when the invoice was raised.
- Treat the MSME return, the MSME note in the audited accounts and the tax working as one exercise. One ageing sheet feeds all three.
- Do not file a nil return as a safe default. First confirm from the ageing that no micro or small supplier was outstanding beyond 45 days, and keep that evidence.
How Lawgical Guru helps
Applicability review
We review your payables ageing and supplier list and tell you whether your company is a specified company for the half-year.
Supplier classification support
We help you tag micro and small suppliers using their Udyam details so that the return covers the right vendors.
Return preparation and filing
We prepare the supplier-wise data and file MSME Form 1 on the MCA V3 portal using the director's DSC.
Linkage with annual compliance
We align the return with your accounting and bookkeeping records and ROC annual filing so that disclosures agree.
Back-period and default advice
If earlier half-years were missed, we sequence the pending filings and explain the penalty exposure.
MSME Form 1 Return: frequently asked questions
What is MSME Form 1?
It is a half-yearly return filed on the MCA portal by specified companies that owe payments to micro or small enterprise suppliers for more than 45 days. It is required under section 405 of the Companies Act, 2013 and the Government's Order made under it, and was revised in July 2024.
What are the due dates for MSME Form 1?
The return is due by 31 October for the April to September half-year and by 30 April for the October to March half-year. For the half-year ending 30 September 2026, the due date is 31 October 2026, unless MCA issues a circular extending it.
Who has to file MSME Form 1?
A company that buys goods or services from micro or small enterprises and has payments pending beyond 45 days from acceptance or deemed acceptance. Under the 2024 amendment, a company with no such pending dues in the half-year does not need to file for that period.
Is MSME Form 1 required if all payments are made within 45 days?
Under the July 2024 amendment, only companies with payments to micro and small suppliers pending for more than 45 days must file. If everything was paid within 45 days, our reading is that no return is due for that half-year. Keep the ageing report as evidence.
What is the penalty for not filing MSME Form 1?
A secondary summary of section 405(4), as amended in 2020, puts the penalty at ₹20,000 on the company and each officer in default, plus ₹1,000 per day of continuing failure up to ₹3 lakh. Please verify the figures on the Act before relying on them.
Does MSME Form 1 cover medium enterprises?
No. The Order covers payments to micro and small enterprise suppliers only. Dues to medium enterprises are not reported in this form, although other contractual and accounting considerations may still apply to them.
What details does the revised MSME Form 1 ask for?
Supplier name and PAN, payments made within 45 days through TReDS or other modes, payments made after 45 days, amounts outstanding up to 45 days and beyond 45 days, and the reason for delay. Prepare these supplier-wise before logging in.
How is the 45-day period counted?
It runs from the date of acceptance or deemed acceptance of the goods or services, not from the invoice date. Where a written agreement sets a shorter credit period, the MSMED Act limit is the agreed period, but it cannot exceed 45 days.
What interest applies on delayed payment to micro and small suppliers?
Under the MSMED Act, the buyer owes compound interest at three times the RBI bank rate on amounts delayed beyond the allowed period. This is separate from the section 405 penalty for not filing MSME Form 1.
Is there a tax impact of paying micro and small suppliers late?
From financial year 2023-24, dues to micro and small enterprises not paid within the time limit are deductible only when actually paid, under section 43B(h) of the Income-tax Act, 1961. The equivalent provision in the Income-tax Act, 2025 should be confirmed with your tax advisor.
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Reviewed by Satyam Gupta, Company Secretary (CS) & Advocate
8+ years of industry experience. This page was last reviewed on 16 October 2026 against the official sources below. Rules and fees change — confirm on the official portal before you apply.