MSME-1 half-yearly return: who must file and what to report by 31 October

If your company buys from micro or small suppliers and has kept any of them waiting more than 45 days for payment, you may have to file Form MSME-1 with the Registrar of Companies. For payments pending during April to September 2026, the statutory default due date is 31 October 2026. This guide explains who files, what goes into the return, and how to prepare without a last-week scramble.

What is Form MSME-1?

MSME-1 is a half-yearly return under Section 405 of the Companies Act, 2013, read with the specified-companies order issued by the Ministry of Corporate Affairs in 2019. It brings out the details of outstanding dues to micro and small enterprises (MSEs) that have remained unpaid for more than 45 days from the date of acceptance of goods or services.

The idea is simple: the law wants delayed payments to small suppliers to be visible. The return is filed on the MCA portal as an e-form.

Who needs to file the MSME-1 return?

The requirement applies to companies that obtain supplies of goods or services from micro or small enterprises and whose payment to any such supplier has been outstanding for more than 45 days. Points to keep in mind:

• It is a company-level requirement. Proprietorships and partnership firms do not file this form (though other MSME-related rules may still affect them).
• Only dues to micro and small enterprises count. Medium enterprises are outside this return.
• If no payment to an MSE is pending beyond 45 days, there is generally nothing to report for that half-year. Keep your working papers so you can show how you reached that conclusion.

The two half-yearly periods and due dates

These are the statutory defaults. Before you plan around them, check the MCA website (mca.gov.in) for any circular or extension for the current period.

What details do you have to report?

The form asks for supplier-wise information on dues outstanding beyond 45 days. In practice you should collect:

• The supplier's name and PAN
• The amount due and the date from which it has been pending
• The reason for the delay in payment

Prepare this from your payables records. The hardest part is usually not the form itself, but knowing which of your suppliers are micro or small enterprises.

How to identify micro and small suppliers

Ask suppliers for their Udyam Registration details and record them in your vendor master. Classification depends on the supplier's investment and turnover as per the MSMED Act, so rely on the Udyam certificate rather than guesswork. A supplier who has not shared a certificate cannot be assumed to be outside the net; follow up in writing and keep the correspondence.

Why 45 days matters beyond MSME-1

The 45-day mark appears in two other places, and together they make timely payment a financial decision as well as a compliance one:

• MSMED Act, 2006: Section 15 requires payment within the agreed period, which cannot exceed 45 days from acceptance. Section 16 provides for compound interest on delayed payments at three times the bank rate notified by the Reserve Bank of India.
• Income-tax Act, Section 43B(h): a buyer's deduction for amounts payable to micro and small enterprises is allowed only when actually paid, if payment is made beyond the time limit (15 days where there is no written agreement, 45 days where there is one). Check the latest provisions and your CA's advice for how this applies to your accounts.

So a bill left unpaid at 46 days can mean a return to file, interest exposure and a possible tax disallowance, all from one invoice.

A practical checklist before 31 October

1. Export your supplier-wise outstanding payables as on 30 September.
2. Mark which suppliers are micro or small, using their Udyam details.
3. Calculate the days outstanding from the date of acceptance of goods or services, not from the invoice date alone.
4. List every MSE dues item pending beyond 45 days, with the reason for delay.
5. Have your finance head or company secretary review the list.
6. File the form on the MCA portal and save the acknowledgement with your records.
7. Clear the oldest dues first, so the next half-year's list is shorter.

For more year-end discipline, see our TDS return checklist for July–September 2026, which falls due on the same date, and our bookkeeping checklist for Indian SMEs. If you are tracking several deadlines, the compliance calendar page shows how AICOUNTLY approaches this.

Common mistakes to avoid

• Counting from the invoice date when goods were accepted later (or earlier).
• Treating all small vendors as MSEs, or none of them, without checking Udyam details.
• Leaving the reason for delay blank or vague.
• Ignoring dues paid after 30 September but outstanding during the period.

Key takeaways

• MSME-1 applies to companies with payments to micro or small suppliers pending beyond 45 days.
• The April–September return is due on 31 October by default; check MCA for extensions.
• Collect Udyam details from suppliers so you know who is covered.
• Timely payment also protects you from MSMED Act interest and Section 43B(h) disallowance.
• Confirm specifics with your Chartered Accountant or Company Secretary.

A clean, supplier-wise payables record makes this return far easier. If you are looking for accounting software to keep that record tidy, you can explore Smart Books from AICOUNTLY.

Related reading

• Product workflow guides
• Plans and pricing
• Help Centre and knowledge base