FAQ ON Mandatory Furnishing of information about payment to micro and small enterprise suppliers

FAQ ON SPECIFIED COMPANIES (FURNISHING OF INFORMATION ABOUT PAYMENT TO MICRO AND SMALL ENTERPRISE SUPPLIERS) ORDER, 2019

1.    APPLICABILITY OF THIS ORDER or SPECIFIED COMPANIES?

 All companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereafter referred to as “Specified Companies”), shall submit a half yearly return.

2.        Which form Company has to file the Return?

            Every specified company shall file in MSME Form I

3.     WHEN THIS NOTIFICATION COME IN TO FORCE?

           It is effective from January 22, 2019

4.     . How many Types of Returns in this form?  

There are two types of Returns:

(a)                 One time

(b)                Half yearly returns

5.      When the Returns is to be filed?

§  Initial Return is to be filed within 30 days from January 22, 2019 (Order notification date)

§  Half yearly Return is to be filed:

April to September:         File latest by 31^st October every year

October to September:  File latest by 30^th April every year

6.      Details Required for filing the Return in the form MSME FORM I?

For Initial Return:

(a)Total outstanding amount due as on date of notification of this order (January 22, 2019)

(b).Particulars of the name of suppliers and amount of payments due

·         Financial Years/Particulars

§  Name of Suppliers

§  PAN of Suppliers

§  Amount Due

§  Specify the date from which amount is due

(c ) Reasons for Delay in amount of payments due

For Regular Return on Half Yearly Basis:

(a)Total outstanding amount due from April to September or October to March as the case may          be

(b).Particulars of the name of suppliers and amount of payments due

·   Financial Years/Particulars

§  Name of Suppliers

§  PAN of Suppliers

§  Amount Due

§  Specify the date from which amount is due

(c )Reasons for Delay in amount of payments due

7.     DEFINITIONS OF MICRO, SMALL & MEDIUM ENTERPRISES?

 In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

1.                Manufacturing Enterprises-he enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.

2.                Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment..

The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified,vide S.O. 1642(E) dtd.29-09-2006 are as under

Manufacturing Sector
Enterprises	Investment in plant & machinery
Micro Enterprises	Does not exceed twenty five lakh rupees
Small Enterprises	More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises	More than five crore rupees but does not exceed ten  crore rupees
Service Sector
Enterprises	Investment in equipments
Micro Enterprises	Does not exceed ten lakh rupees:
Small Enterprises	More than  ten lakh rupees but does not exceed two crore rupees
Medium Enterprises	More than two crore rupees but does not exceed five core rupees

8 Definition of the Day of Acceptance?

Explanation (i) to Section 2(b) of the Act provides that day of acceptance means:

(a) The day of the actual delivery of goods or the rendering of services; or

(b) Where any objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier.

9 Definition of the Day of Deemed Acceptance?

Explanation (ii) to Section 2(b) of the Act provides that day of acceptance means the day of the actual delivery of goods or the rendering of services, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services.

From the above it is clear that we need to look at each and every aspect of the notification before finalizing reporting data.

 Disclaimer: This write-up is the property of DIVYANSHU SAHNI & ASSOCIATES and is based on the understanding and interpretation of the author. This information is for educational purpose only and the same is not intended to be a professional advice. DIVYANSHU SAHNI & ASSOCIATES does not intend to advertise its services through this write-up. DIVYANSHU SAHNI & ASSOCIATES is not responsible for any error or omission in this write-up or for any action taken based on its contents.

Regards

CS DIVYANSHU SAHNI

DIVYANSHU SAHNI & ASSOCIATES

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