MSME compliances: All you need to know
MSME- A pillar that stands strong to hold the economy of the country! The micro, small and medium enterprises are one of those pillars that are necessary for every nation. Whether you are an advanced nation or a developing country, you will need MSMEs to empower your economy and employment. Although, you may acquire your MSME registration certificate easily. But you need to comply with all the compliances. This allows all the MSMEs to operate smoothly without any problem.
So, if you have completed your MSME registration process, here are the basic compliances of MSMEs that you must know.
Compliances for MSMEs
Every MSME that operates in India has mandatory compliance. And that is filing the MSME form 1. This is a specified form that comes under section 9 of the MSMED. All the MSMEs in India have to file this form on a half-yearly basis to India❜s ministry of corporate affairs.
Return intervals to file your MSME form 1
Every MSME in India has to file their MSME form 1 on a half-yearly basis. This form would contain the yearly return of your company. You need to file your form 1 to the registrar for the outstanding payments of the MSMEs.
Further, the form contains the following information.
• The amount of the due payment
• Reason for delay in payment
The fundamental responsibility of every MSME after the completion of the registration process
If you think that you are done after your MSME registration process, you might be wrong. This is because; MSME operation includes much compliance that every company needs to comply with. Some basic responsibilities include:
• If you are operating as an MSME, you must ensure that all your suppliers are registered under the MSME Act.
• Again if you are MSME, you must check for any due payment from the end of a financial year. And you must ensure that dues are not exceeding 45 days from the acceptance of good and service. Further, every MSME must close/ file a return for their due payments. This would be done in MSME form 1, stating the reason for the delay.
Specifications required for the responsibility
• The total amount of the payment due
• Supplier enterprise
• The date from which the responsibility initiated
• PAN card of the supplier enterprise
Due dates for filing the MSME form 1
Every specified company that operates as an MSME in India must file the MSME form 1 half-yearly. All these organizations have to file this form to close outstanding dues. However, they have to file the form within 30 days of the announcement of notification.
Penalties for not complying with these compliances
If you are done with your MSME registration process, you need to stay compliant. Failing to meet the compliances will lead you to be responsible for the following penalties.
• A fine of INR 25000 would be imposed on the defaulter company
• You may be liable for imprisonment of six months as well.
In conclusion, these are the standard compliances for every MSME in India. However, the compliances alter with time. So, you need to check the MCA portal regularly.