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Govt. seeks regn and re-registration of MSMEs under new classification
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Wednesday, 15 July, 2020, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The Union Government has issued guidelines and procedures for new classification and registration of MSMEs effective from July 1, 2020. The registration of the MSMEs will be fully online, paperless and based on self-declaration, says a government note asking the entrepreneurs to register and re-register with the government according to the new classification announced by the government recently.
The government has issued notification in this regard in June after an announcement was made by the Finance Minister in May while explaining the economic stimulus package of Rs 20 lakh crore announced by Prime Minister Narendra Modi.
According to the notification, an enterprise shall be classified as a micro, small or medium enterprise on the basis of the criteria, namely: -- a micro enterprise, where the investment in plant and machinery or equipment does not exceed Rs 1 crore and turnover does not exceed Rs 5 crore; a small enterprise, where the investment in plant and machinery or equipment does not exceed Rs 10 crore and turnover does not exceed Rs 50 crore; and a medium enterprise, where the investment in plant and machinery or equipment does not exceed Rs 50 crore and turnover does not exceed Rs 250 crore.
According to the notification, any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online in the Udyam Registration portal, based on self-declaration with no requirement to upload documents, papers, certificates or proof.
“On registration, an enterprise (referred to as “Udyam” in the Udyam Registration portal) will be assigned a permanent identity number to be known as “‘Udyam Registration Number” and an e-certificate, namely, “Udyam Registration Certificate” shall be issued on completion of the registration process,” reads the notification.
Further, a composite criterion of investment and turnover shall apply for classification of an enterprise as micro, small or medium. The notification says that if an enterprise crosses the ceiling limits specified for its present category in either of the two criteria of investment or turnover, it will cease to exist in that category and be placed in the next higher category but no enterprise shall be placed in the lower category unless it goes below the ceiling limits specified for its present category in both the criteria of investment as well as turnover.
“All units with Goods and Services Tax Identification Number (GSTIN) listed against the same Permanent Account Number (PAN) shall be collectively treated as one enterprise and the turnover and investment figures for all of such entities shall be seen together and only the aggregate values will be considered for deciding the category as micro, small or medium enterprise,” the notification reads further.
The calculation of investment in plant and machinery or equipment will be linked to the Income Tax Return (ITR) of the previous years filed under the Income Tax Act, 1961, while for new enterprise, the investment will be based on self declaration of the promoter but such relaxation will cease to exist after March 31 of the financial year.
Information regarding turnover and exports turnover for an enterprise shall be linked to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN.
Further, Champions Control Rooms functioning in various institutions and offices of the Ministry of Micro, Small and Medium Enterprises including the Development Institutes (MSME-DI) shall act as Single Window Systems for facilitating the registration process and further handholding the micro, small and medium enterprises in all possible manner, states the notification.
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