In this editorial author shall discuss about MSME,Criteria for Registration under MSME, Industries which are allowed to register under MSME and Process of Registration under MSME.
MSME stands for ‘Micro, Small & Medium Enterprises”. Earlier in India, there were the following Acts:
√ The Coir Industry Act, 1953
√ The Khadi and Village Industries Commission Act, 1956
It was Act No. 27 of 2006. It came into force on October 02, 2006. vide notification No. S.O. 1154(E) dated July 18, 2006
Rules passed under this Act;
|26-09-2006||Rules of National Board for MSME, The National Board for Micro, Small and Medium Enterprises Rules, 2006.|
|26-10-2009||Rules of furnishing information on Plant & Machinery/ Equipments|
|29-07-2016||The Micro, Small and Medium Enterprises Development (Furnishing of Information) Rules, 2016|
|28-10-2016||MSME Fund Rules.2016|
As per the MSME Notification Dated June 01 , 2020, Following shall be criteria for Classification of MSME w.e.f. July 01 , 2020:
|Investment in Plant & Machinery or Equipment AND Turnover|
|Manufacturing & Service||Investment <1 Crore AND||Investment <10 Crore AND||Investment < 50 Crore AND|
|Turnover <5 Crore||Turnover <50 Crore||Turnover <250 Crore|
As per the MSME Act, 2006 All type of enterprises can be registered under MSME, whether:
|Proprietary||Hindu Undivided Family||Partnership|
|Co-operative||Private Company||Public Company|
|Self Help Group||Limited Liability Partnership||Society|
As per the MSME Act, 2006 following business activities can register under MSME Either Manufacturer or Service provider can register under MSME.
The major activity i.e. either “Manufacturing” or “Service” may be chosen by the enterprise for Udyog Aadhaar. If your enterprise involves in both type of activities and if major work involves in Manufacturing and a small portion of activity involves in Service sector then select your major activity type as “Manufacturing” and if major work involves in Services and a small portion of activity involves in Manufacturing then select your major activity type as “Services”
As per the MSME Act and MCA registration guidelines, Traders are not allowed to get registration for MSME.
However, if any enterprises are providing Service/ manufacture and trading activity also, then such enterprise can register under MSME.
Aadhar No. is the first requirement for registration under MSME.12 digit Aadhaar Number issued to the applicant should be filled in the appropriate field.
*In case of registration of Company, it is required to mention Aadhar No. of any one Director.
* Mention only that Aadhar No. which is associated with active Mobile No. as MSME will send OTP for verification.
As per MSME registration process, The Applicant may add multiple plant location in one registration by clicking Add Plant button. Therefore, one can opine that registration under MSME is entity wise registration instead of unit wise registration.
Therefore, only one registration will be granted to one enterprise.
National Industry Classification (NIC) Code for Activities (One or more activities can be added)
Enterprises have to mention the NIC code of activity. If enterprises are conducting more than one activity then they need to mention the NIC code for each activity.
Link NIC Code list is given hereunder:
Investment in Plant & Machinery / Equipment– While computing the total investment, the original investment( purchase value of items) is to be taken into account excluding the cost of Pollution control, Research and Development, Industrial safety devices, and such other items as may be specified, by notification of RBI. If an enterprise has started with a set of plant and machinery purchased in 2008 worth Rs. 70.00 lakh has procured additional plant and machinery in the year 2013 worth Rs. 65.00 lakh, then the total investment in Plant & Machinery may be treated as Rs. 135.00 lakh
Table.1 below would not be included in the manufacture or production of goods or providing or rendering of services in accordance with Section 7 of the Micro, Small and Medium Enterprise Development Act, 2006:-
|02||Forestry and logging|
|03||Fishing and aquaculture|
|45||Wholesale and retail trade and repair of motor vehicle and motorcycles|
|46||Wholesale trade except of motor vehicles and motorcycles 47|
|47||Retail Trade Except of Motor Vehicles and motorcycles|
|97||Activities of households as employees for domestic personnel|
|98||Undifferentiated goods and services-producing activities of private households for own use|
|99||Activities of extraterritorial organization and bodies|
The NIC 2-digit activity 01- crop, animal production, hunting and related activities would also not be included as per Section 7 of the Act except for the sub-classes of activities at 5-digit level given in Table 2.:
|01462||Production of eggs|
|01463||Operation of poultry hatcheries|
|01492||Bee-keeping and production of honey and beeswax|
|01493||Raising of silkworms, production of silkworm cocoons|
|01612||Operation of agricultural irrigation equipment|
|01620||Support activities for animal production|
|01631||Preparation of crops of primary markets i.e. cleaning, trimming, grading disinfecting|
|01632||Cotton ginning, cleaning and bailing|
|01633||Preparation of tobacco leaves|
|01639||Other post-harvest crop activities, n.e.c|
|01640||Seed processing for propagation|
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at email@example.com). ‘