MSME Form 1 Half-Yearly Return: October 2026 Due Date and Who Must File

MSME Form 1 Half-Yearly Return: October 2026 Due Date and Who Must File

Every company that receives goods or services from MSME suppliers and has outstanding dues older than 45 days must file Form 1 with the Ministry of Corporate Affairs twice a year. The October 2026 filing covers the April–September 2026 period and is due by October 31, 2026.

This is a compliance that continues to catch companies off guard — particularly those that have grown recently and crossed the threshold for the first time, and those that have taken on MSME vendors without flagging the filing obligation.

Legal Basis

Section 405 of the Companies Act, 2013 gives the Central Government power to direct companies to furnish information on their outstanding dues to micro and small enterprises. The obligation is given operational form by the Specified Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2019 (the "2019 Order"), notified by MCA on February 22, 2019.

The filing is under Rule 5 of the Companies (Reporting) Rules, 2019 (as amended).

Who Must File

The filing obligation applies to a specified company — defined as any company that:

• Receives supplies of goods or services from micro or small enterprises (as defined under the MSMED Act, 2006); AND
• Has payments outstanding to those suppliers for more than 45 days from the date of acceptance of goods/services

The obligation is NOT limited to large companies. Any company — including a private limited company or OPC — that has pending payments to MSMEs beyond 45 days must file.

Practical check:

• Do you have any MSME-registered vendors? (Udyam Registration certificate)


• Are there any outstanding invoices from those vendors older than 45 days as of March 31 or September 30?


• If yes to both: you are a specified company and must file Form 1

What if you have MSME vendors but no dues older than 45 days? Technically you are not a "specified company" for that half-year and need not file. However, MCA's enforcement practice has been to treat companies with MSME vendors as having a latent obligation — the safer approach is to file a nil return if you are not certain.

Filing Periods and Due Dates

Form 1 is filed half-yearly:

For 2026: the April–September 2026 period is due by October 31, 2026.

What Form 1 Requires

The form captures:

• Financials of the company: PAN, CIN, turnover for the preceding financial year
• MSME supplier details: Name, PAN, Udyam registration number of each MSME supplier with outstanding dues >45 days
• Amount and age of outstanding dues: Invoice-wise detail of amounts unpaid beyond 45 days, including the invoice date, due date, amount, and reason for delay (if any)
• Whether interest is due under the MSMED Act: Under Section 16 of the MSMED Act, 2006, if payment is delayed beyond 45 days, the buyer is liable to pay compound interest at three times the RBI bank rate. The form asks whether this interest has been paid or is outstanding.

Interest Liability Under MSMED Act

This is the embedded risk most companies underestimate. Section 16 of the MSMED Act, 2006 mandates compound interest at three times the bank rate notified by the RBI on delayed payments to MSMEs. The interest runs from the date of acceptance or deemed acceptance of goods/services.

As of June 2026, the RBI bank rate is 6.5%. Three times the bank rate = 19.5% compound interest per annum on outstanding MSME dues beyond 45 days.

This interest is:

• Disallowed as a deduction under income tax (Section 23 of the MSMED Act read with Income Tax provisions)


• Not waivable by mutual agreement — any contract term that waives MSME protection is void


• Enforceable through the MSME Facilitation Council (a quasi-judicial body)

The Form 1 filing effectively creates a self-reported record of delayed payments and the interest accruing. Companies that file Form 1 disclosing outstanding dues without resolving them are creating evidence of their MSMED Act exposure.

Consequence of Non-Filing

Non-filing of Form 1 is an offence under Section 405(4) of the Companies Act, 2013. The company and every officer in default is liable to a penalty of ₹25,000 for the first default, and ₹1 lakh for subsequent defaults, per section. The Registrar of Companies can also strike down the company name if non-compliance is persistent.

In practice, MCA has been processing Form 1 non-filings through the adjudication mechanism under Section 454. The adjudication orders for Form 1 non-compliance have been issuing consistently since 2022.

Filing Procedure

Form 1 is filed on the MCA21 portal (v3) at mcav3.mca.gov.in:

• Log in with the company's registered email or the director's DIN-linked login
• Navigate to e-Forms → MCA Compliance Forms → MSME Form 1
• Pre-fill CIN and company details
• Enter supplier-wise outstanding due details
• Attach the declaration signed by a director (DSC required)
• Submit and pay MCA filing fee (fees as per Schedule of Fees under Companies Act 2013)

The form requires a director's DSC (Class 3) for submission.

Practical Compliance Checklist

Before October 31, 2026:

• [ ] Pull the list of all active vendors; identify which hold Udyam Registration
• [ ] Run an ageing analysis of outstanding payables as of September 30, 2026
• [ ] Identify amounts outstanding to MSME vendors for more than 45 days
• [ ] Compute MSMED Act interest liability on delayed amounts (if any)
• [ ] Clear dues where possible before filing to reduce disclosed exposure
• [ ] Prepare Form 1 with supplier-wise details
• [ ] Obtain director DSC for filing
• [ ] File by October 31, 2026

I'm CA Harun Raaj, Visakhapatnam. If your company has MSME vendors and the last Form 1 was not filed, the gap needs to be addressed before the October deadline — late filing with compounding is better than continued non-filing.

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