Arjun is an entrepreneur who runs a private limited company which is into industrial packing solutions. He procures materials from various vendors who also belong to the MSME category. Usually he avails a 45 day credit period from his suppliers. At times, when the going gets tough and when there is a need, he extends the credit period on mutual terms. Arjun is of the impression that his compliances as far as ROC is concerned is restricted to annual returns and KYC of directors. Is there any other compliance that he is missing?
Good Service Tax (GST) Compliance
Ever changing rules and regulations of GST law can be daunting and might take away a lot of your productive time to merely understand it. Further, compliance might seem tedious and expensive but non-compliance could cost much more to a business. Our systematic and time bound approach to tax compliance will take this off your “to do list” and leave you with more productive time for your business activities.
Government focus to empower MSME:
MSME sector is the backbone of the Indian Economy and currently it contributes to about 37.5% of our GDP. Keeping this mind, the Government is consciously taking adequate steps to uplift and empower the sector. The Ministry of Corporate Affairs vide its notification dated Jan 22, 2019, mandates specified Companies having outstanding dues to MSMEs to file half yearly returns (MSME-1 to be filed with ROC) within one month from the end of the half year end i.e April 30 for half year ended 31st March and October 31 for half year ended 30th September.
Enterprises that need to file MSME-1:
All Companies (Specified Companies) who get supplies of Goods or Services
(a) From Micro and Small Enterprises; and
(b) Whose payments to Micro and Small Enterprises exceeds 45 days from the date of acceptance or the date of deemed acceptance of goods or services
MSME Form No.1 is not applicable to:
(a) Companies which do not get supplies of goods or services from Micro and Small Enterprises; or
(b) Companies whose payment to Micro and Small Enterprises Supplier does not exceed 45 days;
Consequences of not filing MSME-1 return with ROC – penalty u/s 405(4) of the Companies Act 2013:
As per sec 405(4) of the Companies Act 2013, if any company fails to file MSME-1, the company and every officer in default will be liable to a penalty of Rs.20,000. In case of continuing failure, the company and every officer in default will be liable for a further penalty of Rs.1,000 for each day the failure continues, subject to a maximum of Rs.3 lakh.
What’s MSME?
Revised classification applicable w.e.f 1st July 2020
Composite Criteria: Investment in Plant & Machinery / equipment and Annual turnover
| CLASSIFICATION | MICRO | SMALL | MEDIUM |
| Manufacturing Enterprises and Enterprises rendering Services | Investment in Plant and Machinery or Equipment: Not more than Rs.1 crore and Annual Turnover ; not more than Rs. 5 crore | Investment in Plant and Machinery or Equipment: Not more than Rs.10 crore and Annual Turnover ; not more than Rs. 50 crore | Investment in Plant and Machinery or Equipment: Not more than Rs.50 crore and Annual Turnover ; not more than Rs. 250 crore |
Source: Ministry of Micro Small and Medium Enterprise
MSMEs can be Proprietorship, Partnership, LLP or Companies.
ROC Compliance – License to operate!
An entrepreneur’s choice to be registered as a Company or LLP would go a long way in formalizing his business enterprise and getting the required credibility a business needs for the growth that he envisions. ROC (Registrar of Companies) compliances requires enterprises registered as Companies or LLPs to file reports/returns within specified due dates. Although one may feel that the compliance cost is expensive and cumbersome, it is vital to understand that non-compliance could cost much more to a business! In fact, missing these compliances could at times take away the “license to operate”.
Entrepreneurs – How can we help you?
“All our dreams can come true, if we have the courage to pursue them.”
Walt Disney
An Entrepreneur begins a journey with a lot of dream and aspiration. But beyond all those “think big” thoughts, the reality is that a business requires a lot of hard work and one may not notice the warnings signs early at every speed breaker he/she passes by!
A growing business needs a trusted advisor to ease the pressure by guiding it through complexities that come its way. We understand your needs and can help you with your (cumbersome but compulsory) compliance.
At Chockalingam Unnamalai & Associates, we have a separate vertical that caters to Business Set Up & related activities. We are here to make your life easier from day one !
Reach us for professional service on ROC, GST, Income Tax & TDS Compliances. Onboard us and experience certainty!
Contact:- +91 73050 56628 / unna@onesourcevault.com
ITR Filing – Why choose us?
Effective compliance is a key pillar for growing your finances and career/business. Tax compliance in particular could be cumbersome and at times very stressful. We help you to navigate through the maze of changes to tax laws with ease.
We understand and operate on the principle – “Time is money”. We have a reasonable turnaround time (TAT) which ensures timely tax compliance.
We understand the importance of data security and hence operate in a data-secure environment. Onboard us and experience certainty and value for money!
With a 15 year experience in the Industry, Chocksi decided to commence his practice after the “Entrepreneurial Bug” bit him ! He is the Founder Partner of Chockalingam Unnamalai & Associates, Chartered Accountants.
- Not disclosed foreign assets in ITR? Can you take corrective action? - December 22, 2025
- Taxation of NRI’s MF investments in India – Are you puzzled? - June 22, 2025
- Foreign gains gifted to NRI kids restricted by RBI regulations - May 2, 2025
