♦ CONCEPT OF MSME
MSME Act became operational on October 02, 2006. It was enacted to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises, rightly termed as “the engine of Economic Growth”. They are often recognised as pillars of economic growth in developing countries just like India. With adversities being faced in terms of infrastructure, market linkage and competition from domestics as well as international markets, the sector has stood tall and also been instrumental in the growth of country’s GDP.
Also Read- Benefits of MSME Registration Under MSME
What’s Udyog Aadhaar?
It is an identification system, similar to Aadhaar, but specifically for businesses. Earlier Udyog Aadhaar Registration was an online method by which an MSME can get a 12-digit Udyog Aadhaar Number and then go for MSME registration. Therefore, one can say that both are different, but now Udyog Aadhaar registration is the new way of MSME registration.
♦ DEFINITION OF MSME
As per MSMED Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two classes viz. manufacture & service sectors.
Under the Aatmanirbhar Bharat Abhiyan (ABA), government revised MSME definition where they replaced the criteria of investment in plant & machinery to investments & turnover, where both are to be considered for deciding MSME. Further exports will not be counted in turnover. Also under the revised definition the distinction between manufacturing and service sectors has been removed.
Composite Criteria- Investment and Annual Turnover
|Investments < 1 crore
Turnover < 5 crores
|Investments < 10 crores
Turnover < 50 crores
|Investments < 50 crore
Turnover < 250 crores
Points to be noted:
1. To do the registration the small and medium scale industry owner can file form in both manners i.e. whether online or offline.
2. Secondly, there is no registration fees required to be paid for this process.
3. The provision of excluding the exports with respect to turnover will encourage the MSMEs to export more and more without fearing to lose the benefits of a MSME unit.
4. Please not the following Points related to Registration of existing enterprises as notified by Notification No. S.O. 2119(E) dated 26.06.2020—
(1) All existing enterprises registered under EM–Part-II or UAM shall register again on the Udyam Registration portal on or after the 1st day of July, 2020.
(2) All enterprises registered till 30th June, 2020, shall be re-classified in accordance with this notification.
(3) The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period up to the 31 stday of March, 2021.
(4) An enterprise registered with any other organisation under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration.
♦ Who can avail the benefits under MSME registration?
It’s true! Under MSME definition, traders are not covered. But there are two exceptions:
Activities (NIC codes) not covered under MSMED Act, 2006 for registration of Udyog Aadhaar Memorandum.
Ministry of Micro, Small, and Medium Enterprises (MSME) has clarified via notifications that the following activities would be specifically not included in the manufacturing or production of commodities or rendering of services as per Section 7 of the said Act.
♦ Registration Process & Documents required
For getting registered as MSME under the Act, following steps should to be followed.
Login to Udhyog Aadhaar Official Website
Enter Aadhaar No. & Name of the entrepreneur
OTP will be sent to the mobile number linked with Aadhaar
Once validated, an application form will appear. Personal as well as basic information needs to be filled in the form. The form looks like this:
After clicking on submit, an OTP will be sent on the Aadhaar linked Mobile Number. For Final Submit enter the OTP and verification code. Once submitted an Udyog Aadhaar Memorandum number (‘UAM’) will be generated.
Option for registration without Aadhaar:
An applicant or the authorised signatory who is not yet enrolled for Aadhaar shall have to apply for Aadhaar. Enrolment ID slip, provided till the time Aadhaar is assigned to the individual, shall be used for granting UAM number and the same shall done by the concerned DIC or MSME-DI on behalf of such enterprise, subject to the production of the following documents as alternative and viable means of identification.
Documents required during the process of registration:
√ Aadhaar cards of Proprietor / Partners/ Directors
√ Copy of PAN Card business
√ Name of business as well as the address proof of business
√ Investment & Turnover details
√ Proof of date of commencement of business
√Partnership deed or MOA/AOA
√ Sales as well as purchase bill copies & copy of bank statement
√ Valid mobile no. as per Aadhaar card & registered email address
Memorandum certificate is received when an entity submits the application form and receives UAM number.
Registration certificate is received after submitting the documents as per the requirement.
Disclaimer: The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.
VIshal Kothari, Partner, MASD Email i’d: [email protected]
Riddhi Thakkar, Consultant, Email I’d: [email protected]