Awareness on Registration of MSMEs

Dr. Rajendra K Sinha, Founder MSMEadvisor.com

The government of India has the portal for MSMEs registration with website link as under:

https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm.

The above portal gives an important notification for MSMEs: “Except this portal of Government of India and Government's Single Window Systems, no other private online or offline system, service, agency or person is authorized or entitled to do MSME Registration or undertake any of the activity related with the process.”

?While going ahead with registration on the above portal, it is important to understand the present classification (2020) for micro, small or medium enterprise applicable uniformly for the manufacturing or services activities based on the following criteria.

(i) Micro-enterprise: where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees.

(ii) Small-enterprise: where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees.

(iii) Medium-enterprise:?where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

?Key features of Registration Process: Udyam Registration

The government has highlighted the facts related to the Registration Process, which are important and shows the easiness & transparency of this process. The Registration Process is totally free, and no Costs or Fees are to be paid to anyone.

• ?An enterprise for the purpose of this process will be known as Udyam and its Registration Process will be known as 'Udyam Registration'
• MSME registration process is fully online, paperless, and based on self-declaration.
• Having PAN and GSTIN (As per applicability of CGST Act 2017 and as notified by the Ministry of MSME?vide S.O. 1055(E) dated 05th March 2021) is required for Udyam Registration with effect from 01.04.2021.
• PAN & GST linked details on investment and turnover of enterprises will be taken automatically from Government databases.
• Aadhaar number shall be of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership firm, and of a Karta in the case of a Hindu Undivided Family (HUF).
• In the case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organization or its authorized signatory shall provide its GSTIN and PAN along with its Aadhaar number.
• No documents or proof are required to be uploaded for registering an MSME.
• Whoever intentionally misrepresents or attempts to suppress the self-declared facts and figures appearing in the Udyam Registration or update process shall be liable to such penalty as specified under section 27 of the Act.
• All existing enterprises registered under EM–Part-II or UAM registration or any other registration issued by any authority under the Ministry of MSME, will have to register again on the Udyam Registration portal on or after the 1st day of July 2020.
• No enterprise shall file more than one Udyam Registration. However, any number of activities including manufacturing or service, or both may be specified or added in one Registration.
• A permanent registration number will be given after registration.
• After completion of the process of registration, a certificate will be issued online.
• This certificate will have a dynamic QR Code from which the web page on our Portal and details about the enterprise can be accessed.

?Key aspects on the updating of information and transition period classification

?For a growing MSME enterprise, it is important to understand the clauses relating to transition period classification because of the changes taking place in the amount of investment in plant & machinery or equipment or turnover or both.

• ?An enterprise having a Udyam Registration number shall update its information online in the Udyam Registration portal, including the details of the ITR and the GST Return for the previous financial year and such other additional information as may be required, on a self-declaration basis.
• Failure to update the relevant information within the period specified in the online Udyam Registration portal will render the enterprise liable for suspension of its status.
• Based on the information furnished or gathered from Government’s sources including ITR or GST return, the classification of the enterprise will be updated.
• ?In case of graduation (from a lower to a higher category) or reverse-graduation (sliding down to lower category) of an enterprise, a communication will be sent to the enterprise about the change in the status.
• In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent reclassification, an enterprise will maintain its prevailing status till the expiry of one year from the close of the year of registration.
• In case of reverse-graduation of an enterprise, whether as a result of re-classification or due to actual changes in investment in plant and machinery or equipment or turnover or both, and whether the enterprise is registered under the Act or not, the enterprise will continue in its present category till the closure of the financial year and it will be given the benefit of the changed status only with effect from 1st April of the financial year following the year in which such change took place.

?Benefits available to Registered MSMEs

?The government of India has been promoting MSMEs because of their significant role in economic growth, and employment generation. This relates to a number of benefits such as (i)Collateral Free loans from banks;(ii) Subsidy on Patent Registration; (iii) Protection for Micro & Small Enterprises against Delayed Payments;(iv) Lower Electricity Bills;(v) ISO Certification cost Reimbursement;(vi) Market Development Assistance (MDA) Scheme;(vii) Bar Code registration subsidy;(viii) Subsidy on Credit ratings ;(ix) Access to Tenders;(x) 15% CLCSS subsidy and, few more incentives.

?Conclusion

?It is in the interest of MSMEs themselves to obtain the Udyam Registration number at the earliest possible through the online simplified process detailed above.

?As per data available on the Government website https://udyamregistration.gov.in, as of 30th September 2021(11 am), the total registered MSMEs are at 50,14,706. Out of which 47,11,111 are Micro enterprises, 2,71,972 Small enterprises and 31,623 Medium enterprises. Considering that there are 63 million MSMEs in the country as per MSME Ministry report 2019-20 (based upon National Sample Survey available data), indicates that there is a need for accelerating the registration pace for MSMEs.

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