Ministry of Micro, Small and Medium Enterprises (MSME) has come out with a Consolidated Notification No. S.O.2119 (E), dated the 26th June, 2020 (referred as “said notification”)in the form of guidelines for classification and registration of MSMEs to be effected from July 1, 2020.
In exercise of the powers conferred by sub-section (1) read with sub-section (9) of section 7 and sub-section (2) read with sub-section (3) of section 8, of the Micro, Small and Medium Enterprises Development Act, 2006, (the Act), the Government, in the Ministry of Micro, Small and Medium Enterprises has issued a notification number S.O.2119 (E), dated the 26th June, 2020.
It is also pertinent to note that the said notification has been issued in super session of the notifications of the Government of India in the Ministry of Micro, Small and Medium Enterprises number S.O.1702 (E ), dated the 1st June, 2020, S.O. 2052 (E), dated the 30th June, 2017, S.O.3322 (E ), dated the 1st November, 2013 and S.O.1722 (E ), dated the 5th October, 2006, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (ii), except as respects things done or omitted to be done before such super session.
Therefore, the entrepreneurs, enterprises and the MSMEs have to refer to just the said notification for matters relating with classification or registration w.e.f. July 1, 2020. Existing MSMEs have to register again on or after 1 July, 2020.
As per revised definition, an enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely:–
|Revised MSME Classification|
|Sr. No.||Enterprises||Investment in and Turnover||Limit|
|(i)||A Micro Enterprises||Investment in plant and machinery or equipment; AND||does not exceed one crore rupees
(<Rs. 1 crore)
|Turnover||does not exceed five crore rupees
(<Rs. 5 crore)
|(ii)||A Small Enterprise||Investment in plant and machinery or equipment; AND||does not exceed ten crore rupees
(<Rs. 10 crore)
|Turnover||does not exceed fifty crore rupees
(<Rs. 50 crore)
|(iii)||a Medium Enterprise||Investment in plant and machinery or equipment; AND||does not exceed fifty crore rupees
(<Rs. 50 crore)
|Turnover||does not exceed two hundred and fifty crore rupees
(<Rs. 250 crore)
As per the said notification, an MSME will be known as ‘Udyam’, as this is morecloser to the word Enterprise and accordingly, the registration process will be known as ‘Udyam Registration’.Any person who intends to establish a micro, small or medium enterprise mayfile Udyam Registration online in the ‘Udyam Registration Portal’, based on self-declaration with no requirement to upload documents, papers, certificates or proof.
On registration, an enterprise will be assigned a permanent identity number to be known as “Udyam Registration Number”. Thereafter, an e-certificate, namely, “Udyam Registration Certificate” shall be issued on completion of the registration process.
New registration process as per the said notification.
1. The requisite form shall be provided in the Udyam Registration Portal, for which there will be no fee.
2. It is necessary for a person to have Aadhaar Number for Udaym Registration. The Aadhaar number shall be of the proprietor in the case of a proprietorship firm and of the managing partner in the case of a partnership firm and of a Karta in the case of a Hindu Undivided Family (HUF).
3. In case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organisation or its authorised signatory shall provide its GSTIN and PAN along with its Aadhaar number.
4. It is to be noted that no enterprise shall file more than one Udyam Registration. Any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration.
Registration of Existing Enterprises
1. All existing registered under EM-Part-II or UAM shall register again on the Udyam Registration portal on or after 1 July, 2020.
2. All enterprises registered till 30 June 2020, shall be re-classified in accordance with this notification.
3. The existing enterprises registered prior to 30 June 2020 shall continue to be valid only for a period upto the 31 March 2021.
4. An enterprise registered with any other organization under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration.
Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.