MCA vide Notification S.O. 2751(E) dated July 15, 2024, informed that the Central Government has issued Specified Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2024 and amended the Specified Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2019 ( “Original Order”)

A proviso is inserted after Para 3 in the Original Order stating that only those specified companies which are having payments pending to any Micro or Small Enterprises for more than 45 days from the date of Acceptance or the date of Deemed Acceptance of the goods or services under section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 shall furnish the information in MSME Form-1.

Also, a new format of Form MSME-1 is substituted which requires many more details than the earlier version of Form MSME-1.

Presently, the Companies are required to file MSME Form I mentioning the details of payments outstanding to Micro or Small Enterprises beyond 45 days from the date of acceptance or date of deemed acceptance of goods or services, within 30 days from the end of each half year. Further, only the amounts that are outstanding as of the last date of each half year, which are outstanding for more than 45 days from the date of acceptance or date of deemed acceptance of goods or services were being reported due to the requirements of the form.

Now, with this amendment, there are additional reporting requirements to be made by the companies which are as follows and to be given with the reason for the delay:

1. Details of Micro or Small Enterprises to whom payment has been made within 45 days during the relevant half year (through TreDS or Other Mode of Payments).
2. Details of Micro or Small Enterprises to whom payment has been made after 45 days during the relevant half year.
3. Details of Micro or Small Enterprises whose payment is outstanding for 45 days or less as on the last date of the relevant half year.
4. Details of Micro or Small Enterprises whose payment is outstanding for more than 45 days as of the last date of the relevant half year.

From the newly inserted proviso, it appears that only those Companies having payments pending to any micro or small enterprises for more than 45 days from the date of acceptance or the date of deemed acceptance of the goods or services are required to file the MSME Form I. However, as per the data requested in the Form MSME-1, it seems that all the Companies whether having payments pending or not to any micro or small enterprises for more than 45 days from the date of acceptance or the date of deemed acceptance of the goods or services, are required to file the said form.

The rationale behind the introduction of the above additional requirements in the form is to aid the enforcement of the announcement made in budget 2024 regarding the payments that are made to Micro or Small Enterprises beyond 45 days from the date of acceptance or the date of deemed acceptance of the goods or services shall not be allowed as a deductible expense for income tax.

The link for the aforesaid Notification is as follows:
https://www.mca.gov.in/bin/dms/getdocument?mds=5d6WlpyCZCPzZo0CHi%252B7oA%253D%253D&type=open