Important amendments for MSME's.

The Ministry of Micro, Small and Medium Enterprises (‘MSME’), vide notification dated 26.06.2020, declared the new process of classification and registration of enterprises as MSME. This Notification comes into effect from 01.07.2020.

All the existing registered enterprises are required to register again on “Udyam Portal”as per new classification. Further the registration process on the portal is simplified. The name of the new portal for Udyam Registration is (www.udyamregistration.gov.in)

Note :- Only those enterprises are eligible for Udyam Registration which are either in manufacturing or production or processing or preservation of Goods OR in the providing or rendering of services. In other words, the enterprises which are engaged only in trading or agency business i.e. buying, selling importing, exporting of goods are not eligible for applying for Udyam Registration.

I) NEW CRITERIA FOR CLASSIFICATION OF MSME

Note:

1) A composite criteria of investment and turnover shall apply for classification of an enterprise as micro, small or medium. It means 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.

2) Calculation of Investment in Plant and Machinery or Equipment

Existing Enterprise

1) Investment will be based on ITR return of the previous years.

New Enterprise

1) Investment will be based on self-declaration of the promoter.(Investment will be revised accordingly after filing First ITR).

2) Invoice value of a plant and machinery or equipment shall be taken into account (excluding GST).

Note:1. The expression “Plant and Machinery or Equipment” shall be as per Income Tax Rules, 1962 and shall include all tangible assets (other than land and building, furniture and fittings). Cost of certain assets i.e. the cost of pollution control, research and development, industrial safety devices shall be specifically excluded from the investment amount.

Note:2. The purchase value of plant & machinery shall be decided on self disclosure basis. The Plant & Machinery can be first hand or second hand. Also, it will exclude GST.

Note:3. All units with GST numbers against same PAN shall be collectively treated as 1 Enterprise. Therefore, the turnover and investment will be clubbed for all the units and then the category will be decided.

3) Calculation of Turnover

Items included in turnover

1) Information as regards turnover and exports turnover for an enterprise shall be linked to the Income Tax Act and GSTIN. 

Items excluded in turnover

1) Exports of goods or services or both

Note:1.The turnover of enterprises which do not have PAN will be on self-declaration basis for a period up to 31st March, 2021 and thereafter, PAN and GSTIN shall be mandatory.

Note:2. All units with GST numbers against same PAN shall be collectively treated as 1 Enterprise. Therefore, the turnover and investment will be clubbed for all the units and then the category will be decided.

II) REGISTRATION OF EXISTING ENTERPRISE

1. All existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period up to 31.03.2021.

2. Such enterprises mentioned above shall register again on Udyam Registration Portal after July 1st, 2020.

3. All enterprises registered till 30th June, 2020, shall be re-classified in accordance with this notification

III) INFORMATION REQUIRED FOR REGISTRATION

1. Aadhar number linked with updated Mobile number of Authorised Signatory.

2. PAN and GSTIN of Enterprise

3. Details of Investment in Plant and Machinery or Equipment

4. Details of Turnover

5. Main Business activity of enterprise

IV) PROCESS OF REGISTRATION

1. The form for registration shall be as provided in the Udyam Registration portal.

2. Registration will be based on self-declaration basis with no requirement to upload any documents.There will be no fee for filing Udyam Registration.

3. Aadhaar number with updated mobile number shall be required for Udyam Registration.

4. Upon registration, an enterprise will be assigned a permanent identity number to be known as “Udyam Registration Number”.

5. An e-certificate, namely, “Udyam Registration Certificate” shall be issued on completion of the registration process.

6. No enterprise shall file more than one Udyam Registration. Provided that any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration.

V) UPDATION OF INFORMATION

1. After obtaining Udyam Registration Number, an enterprise shall update details of the ITR and the GST Return for the previous financial year on self-declaration basis.

2. Failure to update the relevant information will render the enterprise liable for suspension of its status.