Central Government through its Ministry of Micro, Small and Medium Enterprise has made changes in MSME Act 2006. As per notification date 26th June 2020, MSME Department came up with new definition/classification of MSMEs, procedure of issuing certificate called as udyam registration, composite criteria of investment and turnover, meaning of investment, calculation of turnover etc has been covered.
Udyam Registration will be available for registration from 1st July 2020. All enterprises registered under EM Part II and UAM are also required to get new registration under udyam registration. Enterprises are classified as Micro Enterprises, Small Enterprises and Medium Enterprises but there are upward changes made to cover more enterprises and to extend MSMEs benefit to larger numbers.
All existing enterprises registered on or before 30 June 2020 will remain valid till 31st March 2020.
What is the definition of MSME under Udyam Registration?
Enterprise divided into three border category called Micro Enterprises, Small Enterprises and Medium Enterprises.
Micro Enterprises means an enterprises having investment in plant and machinery or equipment up-to 1 Crore and turnover up-to 5 Crore.
Small Enterprises means an enterprises having investment in plant and machinery or equipment up-to 10 Crore and turnover up-to 50 Crore.
Small Enterprises means an enterprises having investment in plant and machinery or equipment up-to 50 Crore and turnover up-to 250 Crore.
Let understand this classification with the help of example:
Case I :- Turnover 4.90 Crore and Investment 25 Lakhs.
Status of Enterprise is Mirco Enterprises
Case II :- Turnover 8.90 Crore and Investment 25 Lakhs.
Status of Enterprise is Small Enterprises
Case III :- Turnover 66.90 Crore and Investment 7 Crore
Status of Enterprise is Medium Enterprises
What is reclassification of udyam registration?
Micro, Small and Medium enterprises have been categories on the basis of turnover and investment made in plant and machinery or equipment. Enterprises are required to update turnover and investment details yearly on the basis of income tax return and goods and services tax return filed. Reclassification of enterprises category in to Micro, Small and Medium will be made once information is updated on udyam portal.
What is the meaning of turnover for classification of Udyam Registration?
- Turnover means turnover as per income tax act or goods and services tax act. Export of goods and services to be excluded from total turnover for classification of enterprises.
- Applicants can make a self declaration where PAN is not available. Self declaration of turnover option will be available only up-to 31st March 2021.
What is the meaning of investment for classification of Udyam Registration?
Investment definition is borrowed from Income tax Act 1962. According to the notification investment means tangible assets other than land and building & furniture and fittings. Investment value is linked with Income tax return and where return is not filed applicants can declare investment on the basis of purchase price of plant and machinery or equipment.