MSME Form 1 (MSME-1)
Half-yearly, for payments overdue past 45 days.
Every company that buys from a registered micro or small enterprise and has not paid within 45 days must report the outstanding amount and the reason for delay, twice a year — by 30 April for October to March, and by 31 October for April to September.
It works together with section 43B(h) of the Income Tax Act, which since 2024 disallows a deduction for any payment to a micro or small enterprise not made within the statutory time. The two together make late payment to an MSME supplier expensive rather than merely rude.
The practical difficulty is knowing which suppliers are registered, which requires collecting Udyam numbers as part of vendor onboarding rather than at year end.
What is included
- Vendor base screened for Udyam registration
- Ageing analysis against the 45-day rule
- MSME-1 prepared and filed
- Section 43B(h) disallowance exposure quantified
What we need from you
- Vendor master with Udyam registration numbers
- Accounts payable ageing for the half-year
- Purchase agreements showing credit terms
- Details of amounts and reasons for delay
Questions
What is section 43B(h)?
It disallows the deduction for any sum payable to a micro or small enterprise beyond the time allowed under the MSMED Act — 45 days where there is a written agreement, 15 days otherwise — until it is actually paid. The expense moves into the following year, increasing this year's taxable profit.
Also in Compliance & payroll
Talk to us
Get started with MSME Form 1 (MSME-1)
Tell us a little about the business and a chartered accountant will call you back. You will get a firm quote before any work begins.
- A qualified accountant on the call, not a call centre
- A firm quote before any work begins
- Your details are never sold or shared