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The Government of India has issued notification on June 26, 2020 giving revised guidelines and limit for classification of enterprises among Micro, Small and Medium. The synopsis for the said important notification is as under:

1. The new guidelines and limit are effective from July 01, 2020.

2. Revised thresholds for classification among Micro, Small and Medium under ‘Micro, Small and Medium Enterprises Act, 2006’ are as under:

Classification Investment Limit Turnover Limit
Micro Less than INR 1 Crore Less than INR 5 Crore
Small INR 1 to 10 Crore INR 1 to 25 Crore
Medium INR 10 to 50 Crore INR 25 to 250 Crore

3. Unlike in past, the Govt has prescribed common threshold for Manufacturing and Service enterprise this time.

4. For the purpose of investment limit, the investment in Plant and Machinery and Equipment as per previous year Income Tax Return are to be considered.

5. In case of new enterprise, where no ITR is available, the Investment will be on self-declaration

6. Information as regard turnover or export turnover are to be linked to Income Tax Act or GSTN.

7. For the purpose of turnover limit, EXPORT of sale is to be excluded.

8. The turnover related figures of such enterprise which do not have PAN will be considered on self-declaration

9. Registration process has been made easy; no document is required to be uploaded now.

10. MSME Registration shall be called Udyam and permanent identity number to be known as “Udyam Registration Number”.

11. All existing registered enterprises shall require registering again. The existing enterprises registered prior to June 30, 2020, shall continue to be valid only for a period up to the March 31, 2021.

Our Comment:

The Government has substantially increased the threshold limit and streamlined the process for taking registration. Eligible enterprises shall consider getting itself registration under relevant category for obtaining various benefit included, but not limited to, quick realisation of sale consideration. It is the fact that Industries and their auditors takes MSME outstanding very seriously and make all endeavours to clear their dues within time.

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3 Comments

  1. Kohinoor Feeds & Fats Ltd. says:

    If SMSE unit crosess turnover limit after 01.07.2020 then what would be its status?
    What that unit should do for UDYAM Registration

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