written by khatabook | November 18, 2022

MSME Form 1 Due Date, Procedure, Late Filing Penalty, Exemption

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Table of Content


Micro, Small, and Medium Enterprises (MSMEs) are the backbone of any economy and play a pivotal role in its growth and development. In India, MSMEs contribute around 45% to the country's overall exports. The MSME sector has been one of the worst hits by the Covid-19 pandemic. To help MSMEs manage this difficult period, the government has announced several relief measures. One of these is the requirement for MSMEs to file half-yearly returns. The filing of half-yearly returns is a new requirement for MSMEs and is a part of the government's initiative to help them recover from the pandemic.  

The return has been made mandatory for all MSMEs registered under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006. The return has to be filed for the periods ending on September 30, 2021, and March 31, 2022. The return has to be filed electronically through the ministry’s website. The return must contain details such as the name and address of the MSME, the type of business, the turnover for the period, the number of employees, and the details of any security. The filing of half-yearly returns is a positive step by the government to help MSMEs get back on their feet, as it will help the government keep track of the progress of MSMEs and provide them with the necessary support. 

Did you know?

MSME account for nearly 8% of the country's GDP, around 45% of the total manufacturing output, and approximately 40% of the country's exports.

What is MSME Form 1?  

The MSME Form 1 is a document that is required to be submitted by businesses in India that wish to register under the Micro, Small, and Medium Enterprises (MSME) Act. The form requires businesses to provide information on their business activities, their products and services, and their financials. The MSME Form 1 is used by the Ministry of Micro, Small, and Medium Enterprises (MSME) to assess whether businesses meet the criteria for registration under the MSME Act. Businesses that are registered under the MSME Act are entitled to certain benefits, such as access to government schemes and subsidies, and preferential treatment in government procurement. 

MSME Definition 

The Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006 defines micro, small and medium enterprises (MSMEs) in India as enterprises engaged in the manufacture or production of goods of any industry specified in the first schedule of the industries (Development and Regulation) Act, 1951 or enterprises engaged in providing or rendering of services and are defined in terms of investment in plant and machinery.  

  • Micro enterprises are defined as enterprises where investment in plant and machinery does not exceed ₹25 lakh.
  • Small enterprises are defined as enterprises where investment in plant and machinery is more than ₹25 lakhs but does not exceed ₹5 crores.
  • Medium enterprises are defined as enterprises where investment in plant and machinery is more than ₹5 crore but does not exceed ₹10 crores.

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Procedure for Filing MSME Half-Yearly Return 

1) The MSMEs can file their half-yearly return by visiting the official website of the Ministry of Micro, Small, and Medium Enterprises. 

2) On the homepage of the website, they need to click on the ‘MSME Databank’ option given on the menu bar.  

3) After that, they need to click on the ‘MSME Registration’ option given on the next page.  

4) Now, they will be redirected to the login page of the portal.  

5) On the login page, the MSMEs need to enter their user ID and password to log in.  

6) After logging in, they need to click on the ‘MSME Registration Certificate’ option given on the dashboard.  

7) On the next page, they need to select the ‘Half Yearly Return’ option from the drop-down menu.  

8) Now, they need to fill in all the required information such as the MSME registration number, registered name of the enterprise, registered address of the enterprise, financial year, and half-year.  

9) After that, they need to click on the ‘Submit’ button.  

10) On the next page, they will be able to see the half-yearly return form.  

11) The MSMEs need to fill in all the required information in the form such as the name of the business, registration number, business address, principal activity, registered mobile number, registered email ID, type of enterprise, turnover, employment, etc.  

12) After that, they need to click on the ‘Submit’ button.  

13) On the next page, they need to click on the ‘Proceed to Payment’ button.  

14) Now, they will be redirected to the payment gateway page.  

15) On the payment gateway page, they need to make the payment of the filing fee.  

16) After making the payment, they need to click on the ‘Proceed to Return Filing’ button.  

17) On the next page, they need to click on the ‘Confirm’ button.  

18) After that, they need to click on the ‘Download Return’ button.  

19) The MSMEs will be able to download the half-yearly return form in PDF format. 

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MSME Form 1 Due Date

The government has issued a notice to the Micro, Small and Medium Enterprises (MSMEs) to file their Half Yearly Returns as required under the MSMED Act, 2006. The due date for filing the MSME Half Yearly Return is 30th June 2022. All the MSMEs registered under the MSMED Act are required to file their Half Yearly Return by this date. 

Exemption to MSME Return Filing

This rule only applies to those Specified Companies that pay MSMEs suppliers more than 45 days after the date the goods or services were accepted or deemed accepted by section 9 of the MSME Development Act of 2006. 

If the payment due to the supplier is delayed by more than 45 days yet the supplier and/or the creditors declare that they do not fall within the definition of a micro or small enterprise. 

Late Filing Penalty for MSME Half-Yearly Return 

A punishment of up to ₹25,000 (Co.), ₹25,000/- (Min) & ₹3 lakhs (Max) and a 6-month sentence for directors, or both, are specified in Section 405(4), which includes the penalty for failing to provide, providing incomplete or erroneous information. Consequently, directors must provide the MSME returns within the time-frame of mandated dates.

Also Read: Business Ideas Under ₹50,000 - Which Businesses Can You Start Under ₹50,000

Conclusion 

The MSME sector is highly diversified, with a large number of enterprises operating in a wide range of industries. The sector is also relatively fragmented, with a large number of small and medium enterprises. The MSME sector is an important contributor to the Indian economy and the government is committed to supporting the sector. The launch of the Half Yearly Return will help the sector to access finance and improve productivity.  

The MSME Half Yearly Return is a very important document for businesses in India. It helps the government track the progress of businesses and ensure that they are complying with all the necessary regulations. The return must be filed every six months, and businesses must keep track of their income and expenditure during this period. 

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FAQs

Q: Who needs to file MSME Half Yearly Return?

Ans:

All entities registered under the MSMED Act, 2006 need to file this return on a half-yearly basis.

Q: What are the consequences of not filing an MSME Half Yearly Return?

Ans:

The consequences of not filing the MSME Half Yearly Return are: - 

  • Late filing fees of ₹500 per day 
  • Disqualification of the MSME from availing certain benefits 
  • Cancellation of the registration of the MSME

Q: What are Micro, Small & Medium Enterprises?

Ans:

Micro, small and medium enterprises (MSMEs) are defined by the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006. Micro enterprises are defined as enterprises where investment in plant and machinery does not exceed ₹25 lakhs. Small enterprises are defined as enterprises where investment in plant and machinery is between ₹25 lakh and ₹5 crores. Medium enterprises are defined as enterprises where investment in plant and machinery is between ₹5 crore and ₹10 crore.

Q: What are the documents required for filing MSME half-yearly return?

Ans:

The documents required for filing MSME half-yearly returns are: 

a) Balance sheet

 b) Profit and loss account 

c) Audit report (if applicable) 

d) Return on investment 

e) Statement of change in equity

 f) Statement of cash flows 

g) Notes to financial statements

Q: Which types of businesses are required to file MSME half-yearly returns?

Ans:

Businesses that are registered under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006 are required to file MSME half-yearly returns.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.