MSME Form I – Applicability, Filing, and Practical Impact for Companies

With increasing focus on timely payments to MSMEs, compliance around MSME dues has become an important responsibility for companies. Many professionals still have confusion regarding applicability, filing requirements, and its impact on taxation.

What is MSME Form I?

MSME Form I is a half-yearly return required to be filed by companies under the Companies Act, 2013.

It is used to report outstanding payments to Micro and Small Enterprises where delay exceeds 45 days.

Applicability of MSME Form I

A company is required to file MSME Form I only if:

• It has received goods or services  
• Supplier is a Micro or Small Enterprise (registered on Udyam portal)  
• Payment is outstanding for more than 45 days  

If any one of these conditions is not satisfied, the form is not applicable.

When MSME Form I is NOT required

• No creditors in the company  
• Creditors exist but none are MSME  
• MSME suppliers exist but no dues exceed 45 days  
• Only non-trade liabilities (loan, salary, statutory dues)  

There is no concept of NIL return.

Applicability to Different Companies

MSME provisions apply to:

• Private Limited Companies  
• Small Companies  
• OPC  

Being a small company does not provide exemption.

Coverage of Creditors

Only trade creditors are covered:

• Purchase of goods  
• Services received  

Even CWIP or capitalised items are covered if nature is supply.

Due Dates

• April–September → 31 October  
• October–March → 30 April  

Filing Fees

• No government fee for normal filing  
• Late filing attracts additional fees  

MSME Disclosure in Financial Statements

Companies must disclose:

• Payments within 45 days  
• Payments beyond 45 days  
• Outstanding amounts  

No Direct Tax Disallowance from Form I

Filing MSME Form I does not lead to disallowance.

Disallowance arises under Section 43B(h):

• Expense disallowed if not paid within time  
• Allowed only on actual payment  

Practical Approach

• Obtain MSME declaration  
• Identify Micro & Small suppliers  
• Review creditor ageing  
• Check 45-day overdue  
• File only if applicable  

Key Takeaways

• Event-based compliance  
• No NIL filing  
• Applies to all companies  
• Focus on trade creditors  
• No fee for normal filing  
• Tax impact under income tax separately  

Conclusion

MSME compliance requires proper identification, ageing analysis, and reporting. While Form I is only a reporting requirement, delays in MSME payments can lead to tax implications.

CA Swati Jain  
Managing Partner  
HSJ and Associates