MSME definitions revised further to include firm with upto Rs. 250 Crore Turnover
Highlights:
1. As per new definitions, a firm with up to Rs. 50 Cr. investments and upto Rs. 250 crore is classified as a medium enterprise.
2. Union cabinet has approved further changes to definitions of MICRO, SMALL & MEDIUM enterprises, a Rs. 20,000 crore funds to provide equity support to stressed entities in the sector, and Equity infusion of Rs. 50,000 crore into MSMEs through a funds of funds.
3. The definition has been revised in the line with industry reviews and it will help a wider section of Companies to avail various sops announced for the sector,
4. As per the new definition, micro units can have upto Rs. 1 crore investment and turnover of up to Rs. 5 crore while businesses with an investment of up to Rs. 10 crore and turnover of upto Rs. 50 crore will be classified as small.
| Revised Definition of MSMEs | ||||
| Sr. No. | Enterprise | Pre Amendment (valid upto 30.06.2020)
Classification was only based on Investment in plant and machinery For manufacturing |
Pre Amendment (Valid upto 30.06.2020)
Classification was only based on Investment in Equipment For service sector |
Post Amendment (w.e.f 01.07.2020) Classification is based on Investment in plant and machinery and Annual Turnover For both Manufacturing and service sector |
| 1 | Micro | Less than or up to 25 lakh | Less than or up to 10 lakh | Investment upto 1cr. and Turnover upto 5 cr. |
| 2 | Small | More than 25 lakh but upto 5 cr, | More than 10 lakh but upto 2 cr, | Investment upto 10 cr. and Turnover upto 50 cr. |
| 3 | Medium | More than 5 cr. but upto 10 cr. | More than 2 cr. but upto 5 cr. | Investment upto 50 cr. and Turnover upto 250 cr. |
Relevant Posts-
| MSME Notification dated 01.06.2020 notifying Revised Classification Criteria for MSME | https://taxguru.in/corporate-law/govt-notifies-revised-criteria-classification-msme.html |
| PIB Press Release dated- on Upward revision of MSME definition | https://taxguru.in/corporate-law/govt-further-revises-ceiling-limits-msme-definition.html |
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