Ministry of MSME has revised the MSME registration process w.e.f 01st July 2020. It is now known as ‘UDYAM REGISTRATION’. The Term Udyam is equivalent to Enterprises in English. Hence all the Micro, Small or Medium Enterprises has to obtain UDAYM Registration to avail the benefits of various schemes run by the govt. for the betterment of the MSME Sector.
Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online. It is pertinent to note here that even existing registered units either under Enterprises Memorandum-II commonly known as EM-II in the Small Scale Industries (SSI) regime or they have taken UDYOG Aadhar Memorandum (UAM) as on 30th June 2020, will have to take fresh registration under new regime. Earlier registrations shall be valid till 31st March 2021.
New Criteria of MSME Unit Recognition
The new registration is brought in alignment with the new definition of MSME units. For the ready reference of our readers, a unit shall be classified as MSME based on the given below criteria:
For Micro Units: Investment in Plant & Machinery is up to Rs. 1 Crore and Turnover is Up to Rs. 5 Crore (Both the conditions must be satisfied)
For Small Units: Investment in Plant & Machinery is up to Rs. 10 Crore and Turnover is Up to Rs. 50 Crore (Both the conditions must be satisfied)
For Medium Units: Investment in Plant & Machinery is up to Rs. 50 Crore and Turnover is Up to Rs. 250 Crore (Both the conditions must be satisfied)
Notes:
1. Exports Turnover shall be excluded while ascertain the Turnover Limit.
2. Purchase Cost to be seen to count the Investment and not the Depreciated Value
New Regime more Hi-Tech and Updated
Earlier in the era of EM-II or Udyog Aadhar, data is not linked to any other department, through the introduction of Udyam Registration Govt. has inter connected the Income Tax Department’s Database, GST Department’s Database and MSME Department’s Database.
As a result of this inter linking, Investment Criteria in the Plant & Machinery or Equipments shall be taken from Income Tax Department’s Database based on the Last ITR Filled and Turnover shall be picked from GST department’s Database. In the case of fresh Unit where there is no ITR or GST Returns then UDYAM Registration can be taken based on Self Declaration, though later on, their status as Micro, Small or Medium shall be recognized based on their filings of returns with Income Tax and GST.
No enterprise shall file more than one Udyam Registration (i.e. if an enterprise have more than one branches or units then only one registration shall be given to that enterprise) provided that any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration
By registering the MSME unit in the Udyam Registration, more opportunities shall be open to the MSME Sector, as govt has also launched various Portals purely dedicated to MSMEs like MSME Samadhan Portal which take care of Payment issues of MSMEs, MSME SAMBANDH Portal for the monitoring and management of Public Sector Undertakings (PSUs) Procurement from the MSME Units. It is noteworthy to highlight here that govt has made it mandatory for the PSU’s to buy at least 25% of their total requirement of material or services from the MSME Units.
Concluding Remarks
Govt. is now so aggressive to promote the MSME Sector as this sector if nourish properly, can contribute remarkably in the growth of economy. In this current scenario of Pandemic and disturbance with China, govt. is taken this as an opportunity to make India Self Reliant and MSMEs are key to achieve this.
For any Clarity or Discussion feel free to write us at associates.ngr@gmail.com
Author Bio
I think linking of ITR to investment in plant and machinery is not correct since fixed assets are stated at WDV in Income Tax return whereas cost of investment is considered for MSME