Every company that has received goods or services from a Micro or Small Enterprise supplier and has payments outstanding beyond 45 days must file Form MSME-1 with the MCA. This is a half-yearly return under Section 405 of the Companies Act, 2013. It runs on its own fixed calendar, independent of the AGM, the statutory audit, or any other annual compliance.

The next deadline is 31 October 2026 for the period April to September 2026.

Who Must File

  • Any company, regardless of size or turnover, where payment to even a single Micro or Small Enterprise supplier has remained outstanding beyond 45 days from the date of acceptance during the half-year.
  • Where there are no outstanding dues beyond 45 days, no filing is required.
  • Medium Enterprise suppliers are excluded entirely. Form MSME-1 covers only Micro and Small Enterprise suppliers. Udyam Registration certificates should be verified to confirm the correct classification before filing.

What Must Be Disclosed

  • Name and PAN of each affected MSME supplier.
  • Amount outstanding and the date from which it has been due.
  • Reason for delay in each case.

Where Companies Commonly Go Wrong

  • Including Medium Enterprise vendors in the disclosure.
  • Reporting only payments made after 45 days rather than amounts still outstanding at the end of the half-year.
  • Missing the connection to Section 43B(h). The same 45-day clock that triggers Form MSME-1 disclosure determines whether a deduction is available under the Income-tax Act. A payment outstanding beyond 45 days may appear in both the MSME-1 return and Form 3CD simultaneously.

The Penalty

  • Company: a minimum fine of Rs 25,000, plus Rs 1,000 per day of continuing default, subject to a maximum of Rs 3 lakh under Section 405(4).
  • Directors, CFO, and Company Secretary in default: imprisonment up to six months, or a fine between Rs 25,000 and Rs 3 lakh, or both.

What This Means in Practice

Form MSME-1 is missed for the same structural reason as DPT-3. It is not tied to any other annual exercise. Companies whose vendor master data does not distinguish between Micro, Small, and Medium Enterprise suppliers cannot file this return accurately. That distinction should be embedded in procurement and accounts payable processes, not reconstructed at filing time.