FREQUENTLY ASKED QUESTIONS (FAQs) FOR REGISTRATION ON UDYAM REGISTRATION PORTAL
1. What is Micro, Small & Medium Enterprises?
Ans. The definition of Micro, Small and Medium Enterprises is given under the Section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (Act) has been amended vide Notification dated June 01, 2020 read with the Notification dated June 26,2020 issued by the Ministry of Micro, Small and Medium Enterprises (Ministry).
As per the amendment the thresholds limits of Investment and Turnover has been increased with the view to include the large number of Enterprises in the definition of Micro, Small and Medium Enterprises.
Revised classification of Micro, Small and Medium Enterprises as per Notification dated June 01, 2020 read with the Notification dated June 26, 2020 as follows:
| S.No. | Enterprise | Investment in Plant and Machinery or Equipment | Turnover |
| 1. | Micro | One Crore | Five Crore |
| 2. | Small | Ten Crore | Fifty Crore |
| 3. | Medium | Fifty Crore | Two Hundred and Fifty Crore |
Both the criteria are composite and needs to be satisfied simultaneously.
2. How to calculate investment in Plant and Machinery or Equipment?
Ans. The value of Investment in Plant and Machinery or Equipment is linked with the Income Tax returns filed in the previous years under the Income Tax Act, 1961.
In case new enterprise, where no prior ITR is available, the value of investment will be based on self-declaration basis and this relaxation shall end after the 31st March of the financial year in which it files its first ITR.
The calculation of investment in Plant and Machinery or Equipment shall be in accordance with the Notification issued by Ministry of Small-Scale Industries dated October 05, 2006
3. How to calculate turnover of Goods and Services?
Ans. The information of turnover is linked to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN. As per Notification dated June 26, 2020, Exports value of goods or services or both are excluded for calculation of Turnover.
In case enterprise not having PAN and GSTIN, then turnover will be provided on self-declaration basis and this declaration will be valid till March 31,2020.
4. Is it mandatory for enterprise to get registered under the Act?
Ans. As per Notification issued by Ministry of Micro, Small and Medium Enterprises dated 26th June, 2020, the Micro, Small and Medium Enterprises may file Udyam Registration,
If we decode the wordings of this Circular, then as per this Circular, registration under Micro, Small & Medium Enterprise is voluntary and purely at the discretion of Micro, Small and Medium Enterprises.
5.Who are eligible for registration as Micro, Small & Medium Enterprise?
Ans. Section 7 of the Act read with the Notification dated June 26,2020 issued by Ministry recognised the proprietorships, Hindu Undivided Families, Association of persons, Co-operative Societies, Trust or Partnership Firms, Companies or Undertakings, by whatever name called eligible for registration as Micro, Small & Medium Enterprise.
The purpose to include all wide categories of enterprises for registration under this Act, is to ensure that the benefits offered by Governmet reaches to large portion of Society.
6.What is the validity of Udyam Registration Certificate?
Ans. In the new registration portal, it is not specifically mentioned anywhere in the Act as well in the notifications issued by the Ministry that the Udyam Registration Certificate will be valid for certain period of time like 5 years, 10 years etc.
Therefore, it can presume that the registration is valid till the existence of Enterprise and there is no requirement for renewal.
However, Enterprises have to update the information as required on new portal including PAN and GST on or before March 31, 2021 .
7. What are the documents required for Udyam Registration?
Ans. Some basics details required for registration under the Act as follows:
- PAN of Entity and its Authorised Signatory(ies);
- Aadhaar number
- Proprietors – Proprietorship firm;
- Partnership – Managing partner
- Hindu Undivided Family (HUF)– Karta
- Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust – Authorised signatory
- E-mail ID and Mobile No. of Enterprise and person mentioned above
- Plant Address and Office Address.
- Bank Details viz. Account Number, IFSC code
- Miscellaneous Information viz. Social Category, Business Activity code, No. of employees etc.
8. What are the benefits to get registered under MSME Act, 2006?
Ans. Benefits to MSME is broadly categorized into various benefits:
| 1. | MSME SAMADHAAN-
Delayed Payment Monitoring System |
Ø State Governments to establish Micro and Small Enterprise Facilitation Council (MSEFC) for settlement of disputes.
Ø MSEFC of the State after examining the case filed by MSE unit will issue directions to the buyer unit for payment of due amount along with interest as per the provisions under the MSMED Act 2006. Ø Any Micro or small enterprise having valid Udyog Aadhar(UAM) can apply. Ø The buyer is liable to pay compound interest with the monthly rests to the supplier on the amount at the three times of the bank rate notified by RBI in case he does not make payment to the supplier for his supplies of goods or services within 45 days of the acceptance of the goods/service rendered. Ø Ministry of MSME has taken an initiative for filing online application by the supplier MSE unit against the buyer of goods/services before the concerned MSEFC of his/her State/UT. |
| Numerous Scheme of Government of India | Ø Credit Linked Capital Subsidy – Technology Upgradation Scheme (CLCS-TUS)
Ø Support for Entrepreneurial and Managerial Development of MSMEs through Incubators Ø Digital MSMEs Ø IPR Ø Lean Manufacturing Competitiveness for MSMEs Ø Design Ø SME Division Schemes Ø Development Commissioner (DC-MSME) Schemes Ø Micro Finance Programme Ø Credit Linked Capital Subsidy for Technology 5 Upgradation |
|
| 3. | Reserve Bank of India Support | Ø Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances
Ø Priority sector advances Ø Specialized MSME branches Ø No Collateral security in the case of loans upto Rs 10 lakh. Ø Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to the MSE sector without the need for collaterals / third party guarantees. Ø One Time Settlement Scheme (OTS) for MSEs for settlement of their NPAs Ø Rural Self-Employment Training Institutes |
| 4. | Trade Receivables Discounting System | Ø TReDS is an electronic platform for facilitating the financing / discounting of trade receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple financiers.
Ø Benefits to MSME viz. the following: i. Timely receipt of funds ii. Helpful in Business growth due to improved liquidity iii. Efficient capital deployment iv. Improved cash flows v. Reduced cost of funds |
| 5. | Goods and Services Tax | Ø Upper limit of turnover for opting for composition scheme to be raised from ₹ 1 Crore to ₹ 1.5 Crore.
Ø Filing of Nil returns have been simplified with one step process. |
9. Is there any renewal provision of MSME registration?
Ans. As per Notification dated June 26, 2020, Udyam Registration Number is a permanent identity number and there will be no need for renewal of Registration
10. Can an enterprise have more than one Udyam Registration Number?
Ans. As per Notification dated June 26, 2020, no enterprise shall have more than one Udyam Registration Number, if an Enterprise is involving in both manufacturing and service, then both the activities will be clubbed in one Udyam Registration.
11. Is it mandatory for every Entity to have PAN and GSTIN?
Ans. As per Notification dated June 26, 2020, all the Enterprises seeking registration under the Act, requires to mandatory have PAN and GSTIN on and after April 01, 2021.
However as per relevant provision of the Central Goods and Services Tax Act, 2017, and respective GST Laws, the Enterprises requires registration on crossing certain threshold limit mentioned in the Act.
But this notification seems the exception of GST laws provision and every enterprise irrespective of turnover, mandatorily have GSTIN and PAN for registration under the Act.
If the Enterprise do not obtain PAN and GSTIN, then its liable for suspension of its status as Micro, Small and Medium Enterprise on and after April 01, 2021.
12 In case an Enterprises ceases to Medium Enterprise, is it required to surrender the Certificate to MSME Authority?
Ans. As per Notification dated 26th June, 2020 issued by Ministry of Micro, Small and Medium Enterprises it is not mentioned anywhere in the Act that once the Enterprise ceases to be MSME enterprise, it has to surrender its certificate, however if the Entity fails to update the relevant information on the portal then it liable for suspension of its status.
13. Whether the Small Retail Shops like grocery Shops, Hawkers, Pedlers are eligible for registration?
Ans.: As per Office Memorandum , F.No. UAM/MC/01l2017-SME, issued by the Ministry, Wholesale Trade and Retail Trade and repair of motor vehicle and motorcycles and Wholesale Trade other than motor vehicle and motorcycles would not be included in manufacturing or production of Goods or providing of Services, therefore small retails shops like grocery shops, hawkers, pedlers are not eligible for registration under MSME Act, 2006.
14.If a Director of the Company is Director in more than one Company whether he is Aadhar can be utilized twice for Udyam Registration?
Ans. As per the FAQs issued by Ministry on Udhyog Aadhar Memorandum, there shall be no restriction on filing more than one Udyog Aadhaar Memorandum using the same Aadhaar Number.
There we can interpret here the provision of Udhyog Aadhar Memorandum shall mutatis mutanis will apply to Udyam Registration Certificate and a single Aadhar can be utilized for more than a Udyam Registration Certificate.
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