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MSME FAQs

This page lists the frequently asked questions for MSME.

You can also refer to the MSME feature in TallyPrime.

General FAQs

This section lists some of the common questions related to MSME.

No. All the information provided in your MSME registration, including the type of enterprise, is applicable from the date you specify as the effective date. Any changes you make to your status is applied from the effective dateย you haveย chosen.

When you choose MSME Credit Period in the Based on Credit Days provided in option under Show Due on, you are instructing TallyPrime to calculate due date for MSMEs based on the number of credit days set in Credit Days Allowed for Micro and Small Parties in F11 Features. This typically represents the maximum permissible days for credit for transactions with MSMEs. By selecting this option, you can ensure that the due date for MSMEs is determined by agreed-upon credit terms.

The default setting in F11 for Credit Days allowed for Micro and Small partiesย is presently set at 45 days. In the event of future changes, you can adjust this value to theย updatedย regulations.

By choosing Bill-wise or MSME Credit Period (whichever is earlier) for Based on Credit Days provided in under Show Due on, the report’s due date calculation will prioritise the lesser of the credit period values set in F11 (Credit Days Allowed for Micro & Small Parties) and those specified at the Bill-wise level. This ensures that the due date is calculated as per the supplierโ€™s credit terms, whether set globally or at the individual transaction level.

Yes, you can exportย MSME Form 1ย in TallyPrime in multiple formats to suit your needs. Additionally, you have the option to print it in aย Return Form formatย (Alt+Pย >ย Return Form). This flexibility allows you to customise the output of MSME Form 1 according to your requirements.

Yes, you can print your UDYAM No. along with your Enterprise type in the reports like Balance Sheet, Profit & Loss A/C, & Stock Summary reports. Enableย the optionย Show Udyam Reg No. & Enteprise Typeย for Reports underย Print Configuration.

Yes, you can open theย Outstanding MSME Billsย report by navigating throughย Go To.

Yes, you can specify the enterprise type without entering the UDYAM No. However, it is advisable to provide the UDYAM No. to verify the authenticity of the enterprise.

Yes. We have a report – Update Party MSME Details where one can update single ledger or multiple ledgers at a time.

This happens when these Party’s address history had been configured as India at some point in time. Therefore, they also participate in Non-Foreign filter.

Yes, you can open the party ledger in alteration mode by pressing Ctrl+Enter, and make any changes to the Party master.

 

You can get the list of disallowed bills for a financial year, for example 2023-24, by going to MSME Form 1.

  1. Press Alt+G and type or select MSME Form 1 Statement.
  2. Change the report period by pressing F2 and enter the from and to dates as 1st April 2023 and 31st Mar 24, respectively.
  3. Press F12 and set Based on credit days provided in, to Bill-wise or MSME Credit Period (which ever is earlier)
  4. Set Show Credit Days to Yes, this will allow you to see the original credit period of each bill.
  5. Press Ctrl+A to accept.
  6. Press Ctrl+B: Basis of Value.
  7. Under Type of Bills, select Pending Bills option to display all pending bills for the MSMEs as of 31st March.
  8. Press Ctrl+A to accept.

You can see all the bills that were raised during the financial year but were not paid by 31st Mar. You can also see the number of overdue days for each bill. You can export this list.

Also, there may be some bills that are not due by the 31st of march. Therefore, they may not appear as pending bills. You can use a different method to view all such bills.

  1. In MSME Form 1 Statement, press F2 to set the period as 15th February 2024 to 15th May 2024.
  2. Press Ctrl+F: Apply Filter.
  3. Press F7: Advanced Filter.
  4. From the List of Options in the first field, select Bill.
  5. From the List of Fields, select Date.
  6. From the List of Conditions, select lesser than equal to.
  7. Specify the date as 31st Mar 24.
  8. Press Enter.
  9. Select And to continue adding filters.
  10. From the List of Options in the first field, select Bill.
  11. From the List of Fields, select Due Date.
  12. From the List of Conditions, select greater than.
  13. Specify the date as 31st Mar 24.
  14. Press Ctrl+A.

You will see the list of bills with due dates beyond 31st March 2024, which will be disallowed from deductions.

To access full list of bills linked with Micro and Small parties, simply choose the All bills option within the Bills Payable – Micro & Small view.

MSME stands for Micro, Small, and Medium Enterprises. These are business entities categorized based on their investment in plant and machinery or equipment, and turnover.

A new clause (h) has been added to Section 43B, as per this amendment any sum payable to a micro or small enterprise beyond the time limit specified in Section 15 of the MSMED Act 2006 shall be allowed as a deduction on a payment basis. It is applicable from 1-Apr-2024.

The UDYAM Registration is a government registration process in India aimed at identifying and classifying micro, small, and medium enterprises (MSMEs) for the purpose of availing various benefits and schemes offered by the government. The UDYAM Registration replaced the earlier system of MSME registration known as Udyog Aadhaar Memorandum (UAM) in July 2020.
To apply for UDYAM Registration and obtain the UDYAM Number, MSMEs can Visit the UDYAM Registration Portal.

The new amendment in the Income Tax Act will only apply to the payables to MSME businesses.

The MSME Act applies to companies registered under the Ministry of Corporate Affairs (MCA). Regardless of whether they are registered under the Ministry of Micro, Small, and Medium Enterprises, if a company is registered under the MCA, the provisions of the MSME Act will be applicable to such businesses.

Yes, you can mention the UDYAM No. and the Enterprise Type in the party master by enabling Provide MSME Registration Details from F12 Configuration of Party Master (Alter or Create).

You can generate an updated outstanding report by adjusting the Report to date to the current date. However, please note that by default, the report will not incorporate the System Date as the Report toย date.

If you need to specify/update the UDYAM No. or Enterprise Type, you can specify the Effective Date for the changes.

The system will verify the format of the UDYAM Number but will not validate its accuracy.

Yes, you can do so from the Update Party MSME Details. You can navigate to report through the below steps and update the MSME Registration details of the multiple-parties:

Display More Reports โ†’ Statutory Reports โ†’ MSME Reports โ†’ Update Party MSME Details
Gateway of Tally โ†’ CoA โ†’ Ledgers โ†’ Exception Reports โ†’ Update Party MSME Details

Or from Go to.

Additionally, if you have the MSME Registration details of the companies in an excel, you use the Excel Import feature to import the MSME Registration details as well.

The Outstanding MSME Bills Report furnishes detailed information on all bills pertaining to Micro and Small Enterprises. You have to specify the enterprise type and UDYAM details of the party ledger for TallyPrime to consider the business as MSME.

To specify credit days agreed upon for MSME parties, you can input this information within the Default credit period section found under Maintain balances bill-by-billย within the party ledger.

You have the option to utilize the Apply Filter feature and choose “Type of Enterprise” to narrow down the specific MSME ledgers within the outstanding payable and receivables report.

The Bills Due in Upcoming Daysย option enables you to filter bills that are due within a specified time frame that you choose to view.

Agreement: If there are values provided at “Default Credit Period” at the ledger level or at “Bill-wise”, then TallyPrime will treat it as an agreement.

Non-Agreement: If there are no values provided at “Default Credit Period” at the ledger level or at “Bill-wise”, them TallyPrime will treat it as non-agreement.

Based on the above, the F11 feature Credit Days allowed for Micro and Small parties will be automatically applicable to all Parties.

MSME Form 1 is a half-yearly return issued by the MCA which states that specified companies are required to file this return form to disclose their outstanding payments to MSME suppliers.

Certainly, you can limit access to MSME reports by defining user roles. Similarly, restricting access to Accounting Master will prevent users from updating MSME details for companies or parties.

The credits days of 45 days set at F11 company features is applicable to Outstanding MSME Payables and MSME Form 1 reports.

A single MSME registration can cover any number of branches, plants, or industrial units under a single entity.

Failing to pay MSMEs within the timelines prescribed by the MSME Act will result in non-compliance:

  1. Interest charged on delayed payments
    The penal interest chargeable for delayed payment to an MSME enterprise is three times of the bank rate notified by the Reserve Bank of India.
  2. Penalty for Late Filing of MSME Form 1
    The section 405(4) which includes non-furnishing/incomplete/incorrect information, states the penalty, a fine up to Rs.25000 (Co.,), Rs.25000/- (Min) & Rs.3 lacs (max) and imprisonment of 6 months for directors or both. Therefore it is mandatory for directors to file the MSME form 1.

MSME Form 1 should be filled by specified companies (registered under MCA).

MSME Form 1 Annexure

Yes, the latest MSME Form 1 Annexure report, as per MCA notification, July 2024, is available in TallyPrime.

By default, the MSME Form 1 Annexure report displays PAN-wise View, where all suppliers are grouped according to their PAN.
However, you can change the view of the report to Party-wise view.

  1. On the MSME Form 1 Annexure report, press F12 (Configure).
  2. Set Type of Grouping as Party-wise and save.

You can also configure the MSME Form 1 Annexure report, to view data as per your preference.

  1. In the MSME Form 1 Annexure report, press Ctrl+B (Basis of Values).
  2. Configure Show report details.
    1. Set Show report details for to All Parties, to view the details for all the parties, with or without valid PAN.
    2. Set Show report details for to Parties with Invalid or No PAN, to view the details for only the parties with Invalid or No PAN.
    3. Set Show report details for to Parties with Valid PAN, to view the details for all the parties with Valid PAN.
  3. Press Ctrl+A to save.

The MSME Form 1 Annexure report displays parties with both valid and invalid or missing PAN to help users identify and update the invalid or missing PAN. This ensures that all relevant parties, once updated with valid PAN, can be included in the MCA template accurately.

  1. In the MSME Form 1 Annexure, select the party with invalid or no PAN.
  2. Press Ctrl+Enter to open the Ledger Alteration screen.
  3. Update PAN and save.

After saving, these parties will appear under Parties with valid PAN.

  1. In the MSME Form 1 Annexure report, press F12 (Configure).
  2. Show no. of bills: Yes, to see the No. of Bills column in the report that lists the total no. of bills paid and outstanding within/after the credit period of 45 days, against each party.

Similarly, you can set the option to No to disable the No. of Bills column in the report.

When this configuration is enabled, the number of billsย will appear only in the relevant column where the amount is displayed. If this option is disabled, the bill count will still be exported and included in the MCA Excel template.

  1. On the MSME Form 1 Annexure report, press F12 (Configure).
  2. Configure the report to view only the outstanding bills after credit period with no. of bills and amount.
    1. Show amount paid within Credit Period: No.
    2. Show amount paid after Credit Period: No.
    3. Show amount outstanding within Credit Period: No.
  3. Press Ctrl+A to save.
    Now, you can view only the After Credit Period column under the Outstanding Bills in theย MSME Form 1 Annexure report, which displays total number of bills and amount.
  1. On the MSME Form 1 Annexure report, press F12 (Configure).
  2. Configure the report to view only the paid and outstanding bills after credit period.
    1. Show amount paid within Credit Period: No.
    2. Show amount paid after Credit Period: Yes.
    3. Show amount outstanding within Credit Period: No.
  3. Press Ctrl+A to save.

    Now, you can view only the After Credit Period columns for the paid bills and outstanding billsย in theย MSME Form 1 Annexure report, which displays total number of bills and amount.

By default, the MSME Form 1 Annexure report in TallyPrime will appear in the PAN-wise Summary View.

  1. Press F8 (Ledger-wise Bills) to view the report with Ledger-wise bill details of the report.
  2. Press Ctrl+F8 (Bill-wise) to view of the Bill-wise details of the report.ย 
  1. In the MSME Form 1 Annexure report, press Ctrl+B (Basis of Values).
  2. Exclude Bills Paid & Outstanding within Credit Period: Yes, to excludeย the bills that are already paid and outstanding within credit period.
  3. Exclude Parties having only Bills Paid & Outstanding within Credit Period: Yes, to excludeย the MSME parties with transactions related to bills that are already paid and outstanding within the credit period.

No, it is not possible to exclude the bills as well as the MSME parties for bills paid and outstanding within credit period at the same time.

The Excel template provided by MCA is supported to include up to 1,00,000 MSME parties. If more than 1,00,000 MSME parties exist in TallyPrime, only the first 1 lakh parties will be exported.

The purchase transaction recorded with a new reference will have Credit (Cr) balance and it will appear under the After Credit Period column of the Outstanding Bills column.ย 

The Credit Note transaction recorded with a new reference will have Credit (Cr) balance and it will appear under the After Credit Period column of the Outstanding Bills column.ย 

The Debit note or purchase return transaction will be of Debit (Dr) balance and it will appear under the Paid Bills column based under Within or after Credit Period columns as per the MSME Due On date.ย 

Payment transaction made with Advance, New Ref or On Account as Type of Ref will not be considered in MSME Form 1 Annexure report.

In this case the purchase transaction value will not be considered. The payment value will appear under the columns of Paid Bills and Outstanding Bills as per the MSME Due on date.ย 

When multiple parties have the same PAN, the party name that appears will be the first one in ascending alphabetical order, regardless of the dates of transactions of the parties.

In TallyPrime Release 6.1, the MSME Form 1 Statement report format has been revised to MSME Form 1 Annexure, resulting in changes to the report’s structure and columns. Views saved using the previous versions of TallyPrime are based on the old format and column configuration, which no longer aligns with the updated format. As a result, when a previously saved view is loaded, the report appears blank.

To resolve this, users need to reconfigure the report based on the new format and save the updated view. It is recommended to set the newly saved view as the default for future use.

In TallyPrime, the Ledger Name field allows up to 51 characters, but it accepts longer names if pasted from MS Excel/Notepad/WordPad/MS Word, even over 160 characters. However, during export to the MCA Excel template, only the first 160 characters are captured.

If a ledger name exceeds 160 characters, especially when used in a transaction, the export process can hang or fail due to the template’s character limit, leading to errors during export.

Yes, MSME Form 1 Annexure report is supported in a Group Company. However, the behavior remains the same as before and it displays bills and MSME parties from theย first child company only, not a full consolidation of all child companies.

No, TallyPrime doesnโ€™t support TReDS functionality. Hence, in the Excel template, the No. column is exported as 0, and the Amount (Rs.) column is exported as 0.00.

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