Eligibility for MSME (Udyog Aadhaar) Registration 

The following enterprises are eligible to obtain MSME registration:

1. Manufacturing Enterprises – The enterprises :

  • Engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or
  • Employing plant and machinery in the process of value addition to the final product having a distinct name or character or use.

A Manufacturing Enterprise will be classified into Micro, Small or Medium enterprise based on it’s  investment in Plant & Machinery.

2. Service Enterprises: The enterprises engaged in providing or rendering of services. A service enterprise will be classified into Micro, Small or Medium enterprise based on investment in equipment.

The limits for investment in plant & machinery/equipment and the classification criteria is as follows:

plant & machinery and equipment and the classification criteria

One can visit the website below and check eligibility for MSME registration for their industry after entering valid Aadhaar number

https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx  

The legal provisions and notifications used for the above are detailed on upcoming pages: 

1. Provisions of MSME Development Act, 2006

Relevant Sections
Relevant clauses of- Section 2 of MSME Development Act, 2006 (e) “enterprise” means an industrial undertaking or a business concern or any other establishment, by whatever name called, engaged in:

§  the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (55 of 1951) or

§  providing or rendering of any service or services;

(g) “medium enterprise” means an enterprise classified as such under sub-clause (iii) of clause (a) or sub-clause (iii) of clause (b) of sub-section (1) of section 7;

(h) “micro enterprise’ means an enterprise classified as such under sub-clause (i) of clause (a) or sub-clause (i) of clause (b) of sub-section (1) of section 7;

(m) “small enterprise” means an enterprise classified as such under sub-clause (ii) of clause (a) or sub-clause (ii) of clause (b) of sub-section (1) of section 7;

Section 7 of MSME Development Act, 2006 read with (1) Notwithstanding anything contained in section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951),the Central Government may, for the purposes of this Act, by notification and having regard to the provisions of sub-sections (4) and (5), classify any class or classes of enterprises, whether proprietorship, Hindu undivided family, association of persons, co-operative society, partnership firm, company or undertaking, by whatever name called,–

(a) in the case of the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951),as–

(i) a micro enterprise, where the investment in plant and machinery does not exceed twentyfive lakh rupees;

(ii) a small enterprise, where the investment in plant and machinery is more than twenty-five lakh rupees but does not exceed five crore rupees; or

(iii) a medium enterprise, where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees;

(b) in the case of the enterprises engaged in providing or rendering of services, as–

(i) a micro enterprise, where the investment in equipment does not exceed ten lakh rupees;

(ii) a small enterprise, where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees; or

(iii) a medium enterprise, where the investment in equipment is more than two crore rupees but does not exceed five crore rupees.

Explanation 1.–For the removal of doubts, it is hereby clarified that in calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other items as may be specified, by notification, shall be excluded.

[Notification No. 1152 S.O.1642 dated 29th September, 2006  was issued to bring the above provisions in force]

2. Notification making entities employing plant and machinery in the process of value addition to the final product having a distinct name or character or use eligible for MSME [Notification S.O. 199 dated 16 January, 2009] 

https://upload.indiacode.nic.in/showfile?actid=AC_CEN_46_77_00002_200627_1517807324919&type=notification&filename=199.pdf

3. Circular listing the exclusions from the meaning of manufacturing or service industry [F.No. UAM/MC/01/2017-SME dated 27, June, 2017]

https://udyogaadhaar.gov.in/Web/doc/Activities_NIC_CodesNotAllowed.PDF

4. First Schedule to the Industries (Development and Regulation) Act, 1951

http://legislative.gov.in/sites/default/files/A1951-65.pdf

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