{“@context”:”https://schema.org”,”@type”:”BlogPosting”,”headline”:”MSME-1 Return: Due Date, Applicability and Half-Yearly Filing Process for FY 2025-26″,”description”:”MSME-1 is a half-yearly return that companies must file if they have outstanding payments to MSME suppliers beyond 45 days. This guide covers the MSME-1 due date, who must file, what qualifies as an MSME supplier, and the step-by-step filing process.”,”author”:{“@type”:”Person”,”name”:”Tradeviser Editorial”},”publisher”:{“@type”:”Organization”,”name”:”Tradeviser”},”datePublished”:”2026-10-07″,”inLanguage”:”en-IN”}
{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”Who must file MSME-1?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”MSME-1 must be filed by every ‘specified company’ — a company that has received goods or services from MSME suppliers and has outstanding payments to those suppliers that are due for more than 45 days from the date of acceptance of the goods or services. Both Public Limited and Private Limited Companies are covered. The return is required even if the payment was eventually made during the half-year period, as long as the delay crossed 45 days at any point.”}},{“@type”:”Question”,”name”:”What are the MSME-1 due dates?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”MSME-1 is filed half-yearly: for the half-year October to March, the return is due by 30 April of the same year. For the half-year April to September, the return is due by 31 October of the same year. For FY 2025-26: the H2 return (October 2025 to March 2026) was due by 30 April 2026, and the H1 return (April to September 2026) is due by 31 October 2026.”}},{“@type”:”Question”,”name”:”What is an MSME supplier for MSME-1 purposes?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”An MSME supplier is an enterprise that has obtained Udyam Registration from the Ministry of MSME. It includes micro enterprises (investment up to Rs. 1 crore and turnover up to Rs. 5 crore), small enterprises (investment up to Rs. 10 crore and turnover up to Rs. 50 crore), and medium enterprises (investment up to Rs. 50 crore and turnover up to Rs. 250 crore). An enterprise that is not registered on the Udyam portal is not an MSME for these purposes, even if it is small.”}},{“@type”:”Question”,”name”:”What is the late fee for MSME-1?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”The late fee for MSME-1 is Rs. 100 per day from the day after the due date, with no maximum cap. The penalty applies per form per half-year period. Companies should track their MSME supplier payments and file MSME-1 on time to avoid accumulating daily late fees.”}},{“@type”:”Question”,”name”:”Does MSME-1 apply even if the outstanding amount is eventually paid?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Yes. MSME-1 must be filed if, at any point during the half-year period, the payment to an MSME supplier remained outstanding beyond 45 days from acceptance. The fact that it was later paid does not eliminate the filing obligation. The form requires disclosure of the amount that was overdue and the reason for the delay.”}}]}
MSME-1 Return: Due Date, Applicability and Half-Yearly Filing Process for FY 2025-26
MSME-1 is a half-yearly compliance form introduced under Section 405 of the Companies Act 2013 to protect MSME suppliers from delayed payments. Every company that buys goods or services from MSME-registered suppliers and has outstanding payments beyond 45 days must file Form MSME-1 twice a year. Non-filing attracts Rs. 100 per day in late fees with no upper cap, and the filing is becoming more strictly monitored as the government prioritises MSME payment protection under Section 43B(h) of the Income Tax Act.
This guide explains who must file MSME-1, the exact due dates, what qualifies as an MSME supplier, what the form discloses, and the step-by-step MCA V3 filing process for FY 2025-26.
Key Takeaways
- Filed twice a year: H2 (Oct-Mar) by 30 April; H1 (Apr-Sep) by 31 October
- Only required if the company has MSME supplier payments outstanding beyond 45 days
- The supplier must be Udyam-registered to count as an MSME for this purpose
- Late fee: Rs. 100 per day, no cap
- Disclosures: supplier name, amount outstanding, due date, and reason for delay
- Link with Section 43B(h): delayed MSME payments are not deductible as a business expense under income tax unless paid by 31 March
Contents
Who must file MSME-1
Form MSME-1 is required to be filed by every company (Public Limited, Private Limited, OPC, Section 8) that:
- Has received any supply of goods or services from a supplier who is registered under the Udyam Registration Portal (i.e., an MSME), AND
- Has an outstanding payment to that MSME supplier that was not paid within 45 days of acceptance of the goods or services
If both conditions are met for even a single MSME supplier in the half-year period, MSME-1 is mandatory. The form must be filed even if the payment was eventually made before the due date of the MSME-1 return – the trigger is the delay crossing 45 days, not whether the amount remains outstanding at the time of filing.
What counts as an MSME supplier
For MSME-1 purposes, an MSME supplier is an enterprise that:
- Has obtained Udyam Registration from the Ministry of MSME (udyamregistration.gov.in)
- Falls within the MSME classification thresholds as of the date of supply
| MSME Category | Investment in Plant and Machinery | Annual Turnover |
|---|---|---|
| Micro Enterprise | Up to Rs. 1 crore | Up to Rs. 5 crore |
| Small Enterprise | Rs. 1 crore to Rs. 10 crore | Rs. 5 crore to Rs. 50 crore |
| Medium Enterprise | Rs. 10 crore to Rs. 50 crore | Rs. 50 crore to Rs. 250 crore |
A supplier that is not Udyam-registered is not an MSME for MSME-1 purposes, even if it is a small business by any other measure. Companies should collect Udyam Registration Numbers from all their suppliers at the beginning of each financial year to identify MSME suppliers in advance.
Due dates for FY 2025-26
| Half-Year Period | What is Reported | Due Date |
|---|---|---|
| H2: October 2025 to March 2026 | Payments to MSME suppliers outstanding beyond 45 days during this period | 30 April 2026 |
| H1: April 2026 to September 2026 | Payments to MSME suppliers outstanding beyond 45 days during this period | 31 October 2026 |
What MSME-1 discloses
For each MSME supplier to whom payment was outstanding beyond 45 days, the form requires:
- Name of the MSME supplier
- Udyam Registration Number of the supplier
- Amount due and outstanding as on the date of reporting
- Date from which the amount has been outstanding
- Reasons for the delay in payment (cash flow difficulty, dispute over quality, etc.)
If payment was made after 45 days but before the filing date, the supplier must still be listed with the date of eventual payment. The disclosure is a record of the delay, not solely of what is currently outstanding.
Step-by-step filing process
- Identify MSME suppliers: Cross-check your supplier list against Udyam registrations. Verify by asking suppliers to share their Udyam Registration certificate or number.
- Review payment records: For each MSME supplier, check whether any invoice remained unpaid beyond 45 days of acceptance. Acceptance date is the date goods/services were received and accepted (not invoice date alone).
- Download MSME-1 form from MCA V3: Log in to mca.gov.in, go to E-Filing > Company Forms, and download Form MSME-1.
- Enter company details: Pre-fill using CIN. The form auto-populates the company name and registered address.
- Enter supplier details: For each MSME supplier with delayed payment, enter the name, Udyam number, amount, delay period, and reason.
- DSC and submit: Sign with a director’s DSC whose DIN is active and KYC-compliant. Upload on MCA V3 and pay the government fee (typically Rs. 200 to Rs. 400 based on authorised capital).
MSME-1 and Section 43B(h): the income tax link
Section 43B(h) of the Income Tax Act, effective from FY 2023-24, provides that payments to MSME suppliers are deductible as a business expense only in the year in which they are actually paid, not when the liability is created, if the payment is delayed beyond:
- 15 days (if no written agreement exists between buyer and MSME supplier)
- 45 days (if a written agreement allows up to 45 days)
Any amount outstanding to an MSME supplier beyond these periods as on 31 March must be added back to income and becomes taxable in that year. It can be deducted only in the year it is actually paid. This makes timely MSME payments a direct income tax issue, not just a Companies Act compliance issue, and has significantly increased the urgency around MSME-1 filings.
MSME-1 Filing and MSME Payment Compliance
Tradeviser handles MSME-1 half-yearly returns, supplier Udyam verification, and Section 43B(h) compliance review to protect your deductions and avoid late fees.
Frequently Asked Questions
CA Madhusmita Padal is a Practicing Chartered Accountant with firms based in Odisha and Chennai. She specializes in taxation, company law, and auditing. She is passionate about simplifying complex concepts and making knowledge accessible to all.