👍👍👍👍👍Certification of MSME

Clipped from: https://taxguru.in/corporate-law/certification-msme.html

WHO IS MSME?

In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

(a) Enterprises engaged in the manufacture or production, processing or preservation of goods.

(b) Enterprises engaged in providing or rendering of services

MANUFACTURER

INVESTMENT IN PLANT AND MACHINERY ARE AS SPECIFIED BELOW:

CATEGORYAMOUNT INVESTED
micro enterpriseRs.0 – Rs. 25 lakhs
small enterpriseRs.25 lakhs – Rs. 5 crore
medium enterpriseRs. 5 crore – Rs. 10 crore

SERVICE PROVIDER

INVESTMENT IN EQUIPMENTS ARE AS SPECIFIED BELOW:

CATEGORYAMOUNT INVESTED
micro enterpriseRs.0 – Rs. 10 lakhs
small enterpriseRs.10 lakhs – Rs. 2 crore
medium enterpriseRs. 2 crore – Rs. 5 crore

DAY OF ACCEPTANCE

  • Day of Acceptance means-

> the day of the actual delivery of goods; or

> the rendering of services; or

> the day on which objection is removed by the supplierwhere any objection is made in writing by the buyer regarding acceptance of goods or services within 15 days from the day of the delivery of goods or the rendering of services.

  • Day of Deemed Acceptance means-

The day of deemed acceptance” means, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services;

APPOINTED DAY

  • Section 2(b) of the Act defines the appointed day as-

the day following immediately after the expiry of the period of 15 days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier.

Here we can say that appointed day is 16th day from the day of acceptance or deemed acceptance of any goods or any services

LIABILITY OF BUYER TO MAKE PAYMENT

Section 15 of MSMED Act, 2006 states as follows:

Section 15 of MSMED

CONSEQUENCES OF NON COMPLAINCE TO SECTION 15

Section 16 of MSMED Act, 2006 states as follows:

  • On failure to make payment to supplier as per section 15, the buyer shall be liable to pay compound interest with monthly rests to the supplier from the appointed day or, as the case may be, from the date immediately following the date agreed upon, at three times of the bank rate notified by the Reserve Bank.

DISCLOSURE REQUIREMENTS IN ANNUAL STATEMENTS OF ACCOUNTS 

  • FOR COMPANY
Sr. noParticularsAs on
March 31,201*March 31, 201*
1Principal amount due to suppliers registered under the MSMED Act and remaining unpaid as at year end
2Interest due to suppliers registered under the MSMED Act and remaining unpaid as at year end
3Principal amounts paid to suppliers registered under the MSMED Act, beyond the appointed day during the year
4Interest paid, other than under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, beyond the appointed day during the year
5Interest paid, under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, beyond the appointed day during the year
6Interest due and payable towards suppliers registered under MSMED Act, for payments already made
7Further interest remaining due and payable for earlier years

DISCLOSURE REQUIREMENTS IN ANNUAL STATEMENTS OF ACCOUNTS

  • FOR LLP
Sr. no.ParticularsAs on
March 31, 201*March 31, 201*
1.The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year.
2.The amount of interest paid by the buyer in terms of section
16, along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year.
3.The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under MSMED Act, 2006.
4.The amount of interest accrued and remaining unpaid at the
end of each accounting year.
5.The amount of further interest remaining due and payable even
in the succeeding years, until such dated when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act, 2006.

3CD REQUIREMENT

The Interest paid on delayed payment under section 16 of the act, to be disallowed while calculating income of the assessee and the same to be reported in clause 22 of part B in FORM 3CD of Tax audit report.

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