What MSME Form 1 is
MSME Form 1 is a half-yearly return in which a company tells the Registrar what it owes to micro and small suppliers beyond 45 days, and why.
It comes from an order of the Central Government under section 405(1) of the Companies Act, 2013: the Specified Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2019, notified as S.O. 368(E) on 22 January 2019. The 45-day period itself is not a company-law idea. It is section 15 of the Micro, Small and Medium Enterprises Development Act, 2006.
So two laws meet in one form. The MSMED Act sets the payment deadline, and the Companies Act makes you report the breach of it.
Who has to file it
Every company that buys goods or services from a micro or small enterprise and has not paid within 45 days. The order calls these "specified companies".
| Buyer | Files MSME-1? |
|---|---|
| Private limited company | Yes, where any due to a micro or small supplier crossed 45 days |
| Public limited company | Yes, on the same test |
| One person company | Yes, on the same test. See OPC annual compliance |
| Section 8 company | Yes, on the same test |
| LLP, partnership firm or proprietorship | No. MSME-1 is a Companies Act return |
Two points follow from the table. Size does not matter: a company with two employees and one late vendor bill files, and turnover is irrelevant. And your own MSME status does not matter either. A micro company that pays a micro supplier late still files.
Who does not file MSME-1
An LLP, a partnership firm, a trust or a proprietorship does not file MSME-1, because section 405 applies to companies. That is a reporting exemption only. The 45-day payment deadline under the MSMED Act, the interest that follows it and the income-tax disallowance all apply to those buyers just the same. Converting to an LLP is not a way out of the substance, only out of the form. See conversion of a private company to an LLP.
The two half years and their due dates
Two filings a year, each for a six-month period.
| Half year | Period covered | Due by |
|---|---|---|
| First half | 1 April to 30 September | 31 October |
| Second half | 1 October to 31 March | 30 April |
For the current cycle, the return for 1 April 2026 to 30 September 2026 is due by 31 October 2026. The previous one, for 1 October 2025 to 31 March 2026, was due by 30 April 2026. If that one was not filed, it is late now and the position is worth regularising before the October filing goes in.
The date does not move with your AGM, your audit or your income-tax return. It is fixed to the half year.
What counts as an outstanding due beyond 45 days
Start with section 15 of the MSMED Act, 2006. A buyer must pay a micro or small supplier by the agreed date, and the agreed period cannot be longer than 45 days from the day the buyer accepts or is deemed to accept the goods or services. Where there is no written agreement, the period is 15 days.
So the clock starts at acceptance or deemed acceptance, not at the invoice date, and not at the end of a credit period your purchase order tried to stretch to 90 days. A 90-day credit term does not survive section 15.
| Situation | Position |
|---|---|
| Written agreement says 45 days, invoice unpaid on day 60 | Reportable |
| Written agreement says 90 days, invoice unpaid on day 60 | Reportable. The agreed period cannot exceed 45 days |
| No written agreement, invoice unpaid on day 30 | Reportable. The period is 15 days |
| Amount disputed on quality, unpaid on day 70 | Reportable, with the dispute stated as the reason for delay |
| Supplier is a medium enterprise, unpaid on day 90 | Not reportable in MSME-1 |
| Supplier is not registered on Udyam | See below |
Micro and small only, not medium
MSME-1 covers micro and small enterprises. Medium enterprises are outside it, and so is the section 15 deadline. This is the single most common error we see in a first-time filing: a purchase ledger filtered on "MSME vendors" sweeps in medium suppliers and overstates the return.
The classification limits are on Udyam registration, where they belong. In short, an enterprise is micro or small only if both its investment and its turnover are inside the limit for that class.
How to tell whether your supplier is micro or small
You cannot tell from the invoice alone, so build the evidence into your vendor file.
- Ask every vendor for its Udyam Registration Number and a copy of the Udyam certificate at onboarding, and again when the certificate is updated.
- The certificate states the class: micro, small or medium. That is what you report against.
- Verify the number on the official Udyam portal rather than relying on a line in an email footer.
- Re-check annually. A supplier that was small last year can become medium after an update, which takes it out of your return.
Where a supplier has no Udyam registration, get that in writing. It is also worth telling the vendor: registration is free on the government portal, and it is what gives the supplier the 45-day protection in the first place.
Is a nil MSME-1 return required?
No. If nothing was outstanding to a micro or small supplier beyond 45 days in the half year, there is nothing to file. There is no nil MSME-1.
That is not a reason to skip the work. The finding that there is nothing to report is itself a conclusion someone should be able to show later. We record it in writing with the ageing that supports it, so the file answers the question if a Registrar or an auditor asks in two years.
What the form asks for
The form was revised in 2024 and now asks for the whole payment picture, not only the closing balance. Expect to report, for the half year:
- The company's CIN and PAN
- Supplier name and PAN
- Amount outstanding and the date from which it is due
- Amounts paid during the half year within 45 days and beyond 45 days
- The reason for the delay, in your own words, for each late amount
The reason field is where most filings get uncomfortable, and it is the reason to prepare the return rather than fill it in on 31 October. "Cash flow" is an answer. So is a genuine quality dispute or a contractual hold. What matters is that the reason you file matches what your own records say, because this return sits alongside the supplier's rights under the MSMED Act and, if a dispute reaches the Facilitation Council, your reason is already on record.
The tax side: section 43B(h) for FY 2025-26
The same late payment has a tax consequence, and it is usually the larger of the two.
For FY 2025-26 (AY 2026-27), under section 43B(h) of the Income-tax Act, 1961, a sum payable to a micro or small enterprise is deductible only in the year it is actually paid where it is not paid within the time in section 15 of the MSMED Act. From Tax Year 2026-27, the Income-tax Act, 2025 carries the same actual-payment rule.
Two things follow. A creditor ageing prepared for MSME-1 in April is most of the working your auditor and your tax computation need for the year, so do it once. And the disallowance applies to every buyer, company or not, while MSME-1 applies only to companies. See tax audit and company income tax return for where the number lands.
Separately, a supplier who is paid late can claim compound interest at three times the Reserve Bank of India bank rate under section 16 of the MSMED Act, and can take the dispute to the Micro and Small Enterprises Facilitation Council. That is the position from the other side of the invoice: see recovery notice.
Government fee for MSME Form 1
The MCA normal fee is the standard Table of Fees amount, set by the company's authorised share capital, not its paid-up capital.
| Authorised share capital | Normal fee |
|---|---|
| Less than ₹1,00,000 | ₹200 |
| ₹1,00,000 to less than ₹5,00,000 | ₹300 |
| ₹5,00,000 to less than ₹25,00,000 | ₹400 |
| ₹25,00,000 to less than ₹1,00,00,000 | ₹500 |
| ₹1,00,00,000 and above | ₹600 |
A company not having share capital pays ₹200 per document. Filed late, MSME-1 carries the general additional fee: 2 times the normal fee beyond 15 days, 4 times beyond 30 days, 6 times beyond 60 days, 10 times beyond 90 days and 12 times beyond 180 days.
What not filing costs
Under section 405(4) of the Companies Act, 2013, the company and every officer in default is liable to a penalty of ₹20,000, and where the failure continues, a further penalty of ₹1,000 for each day after the first, subject to a maximum of ₹3,00,000. The same provision covers information that is incorrect or incomplete in a material respect.
If you have read elsewhere that MSME-1 carries imprisonment of up to six months and a fine of ₹25,000 to ₹3,00,000, that was the position before the Companies (Amendment) Act, 2020 substituted section 405(4) with effect from 21 December 2020. It is a monetary penalty now, on the company and on the officers, and several guides still print the old wording.
Keep the two amounts separate in your head. The additional fee is what the MCA charges to accept a late form. The section 405(4) penalty is adjudicated, and it is a different thing.
Where MSME-1 sits in your compliance year
MSME-1 is one of the filings that ignore the AGM cycle.
| Filing | Due |
|---|---|
| MSME-1 | Half-yearly, by 31 October and 30 April |
| DPT-3 | 30 June, for the position as on 31 March. See DPT-3 filing |
| DIR-3 KYC | Once every three financial years by 30 June. The next cycle is 30 June 2028. See director KYC |
| AOC-4, MGT-7 or MGT-7A, ADT-1 | Tied to the AGM. See annual ROC filing |
The full set sits on MCA compliance and alongside your tax dates in our compliance calendar. Companies on our ROC compliance retainer have both MSME-1 filings inside the annual cycle.
Our fee for MSME-1 filing
Fee on quote after a free review. The filing itself is small. The work is the payables review behind it: which suppliers are micro or small, what crossed 45 days, and what the reason for each delay is.
| Item | Amount |
|---|---|
| Professional fee: MSME-1 filing, per half year | Fee on quote after a free review |
| Government fee: MSME-1 normal fee, by authorised capital | ₹200 to ₹600. ₹200 for a company without share capital |
| Additional fee, if filed late | 2 times to 12 times the normal fee, by delay band |
| Penalty under section 405(4), if imposed | ₹20,000 on the company and on every officer in default, plus ₹1,000 a day, capped at ₹3,00,000 |
| Udyam registration for a supplier or group company, if needed | ₹499. See Udyam registration |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 27 September 2026.
How we file MSME-1
- Ageing. We take the creditors ageing for the half year and pull every supplier balance older than 45 days.
- Classify. We match each of those suppliers to its Udyam certificate and keep only the micro and small ones. Medium suppliers come out.
- Test the clock. For each amount we fix the start date: acceptance or deemed acceptance, and 15 days where there is no written agreement.
- Reasons. We agree the reason for delay with you, supplier by supplier, and keep it consistent with your records.
- Prepare and review. You see the completed form and the fee working, including any additional fee, before signing.
- File. The form goes in on the MCA portal with the authorised signatory's DSC. You get the SRN, the challan and the filed form for your file.
Where nothing crosses 45 days, step 6 does not happen and you get the documented conclusion instead.
What we need from you
- CIN and the company's MCA login, shared securely
- Creditors ageing as on 30 September or 31 March, supplier-wise
- Udyam certificates for the suppliers in that list, with their class shown
- Purchase agreements or accepted purchase orders where credit terms are written
- Dates of acceptance of goods or services where they differ from the invoice date
- Payment details for amounts settled during the half year, with dates
- Your explanation for each delayed amount
- The last MSME-1 filed, with its SRN, if any
Five mistakes we see
- Treating it as an MSME's form. MSME-1 is filed by the buyer. Your own MSME status is irrelevant to it.
- Including medium suppliers. Only micro and small enterprises count. A "MSME vendor" filter in the accounting software is not a classification.
- Counting from the invoice date. The 45 days run from acceptance or deemed acceptance, and it is 15 days with no written agreement.
- Filing a nil return to be safe. There is no nil MSME-1. Record the conclusion instead.
- Quoting the old penalty. Section 405(4) is a ₹20,000 penalty with ₹1,000 a day, capped at ₹3,00,000, since 21 December 2020.