The government has received some representations after its Notification dated 26/06/2020 regarding criteria for the classification of MSMEs and their registration in the new Udyam Portal.
Therefore, Union Ministry of Micro, Small, and Medium Enterprises (MSME) issues a clarification on existing Entrepreneurs Memorandum (EM) PART-II/ Udyog Aadhar Memorandum (UAM), vide Office Memorandum Dated 06/08/2020.
You can also refer our previous article for practical aspects of old and new MSME registration – https://taxguru.in/company-law/practical-aspects-udyam-registration-w-e-f-01-07-2020.html
|1.||The validity of EM Part II and UAMs as issued till 30 June, 2020||All the existing EM Part II and UAMs obtained till 30/06/2020 shall remain valid till 31/03/2021.
Therefore, before 31/03/2021 they must register themselves on Udyam Portal to remain their registration valid thereafter.
|2.||Editing /updating of the existing registration details||Existing UAM holders may edit or amend their details on the UAM portal till 31.03.2021. Those enterprises that have not entered their Aadhaar or PAN number so far in the UAM portal must obtain “Udyam Registration Number” well before 31.03.2021.|
|3.||Action to be taken before 31st March 2021 by Entrepreneurs:|| i. Existing registrations as EM Part II and/or UAMs will not remain valid after 31/03/2021, therefore they must register themselves on Udyam portal and obtain “Udyam Registration Number” well before 31/03/2021.
ii. All enterprises registered till 30/06/2020 shall be re-classified following new definition and enterprises must enter latest details for proper classification.
|4.||Value of Plant and Machinery or Equipment||As per the earlier notification of ministry dated 26.6.2020:
“The expression plant and machinery or equipment of the enterprise shall have the same meaning as assigned to the plant and machinery in the Income Tax Rules, 1962 framed under the Income Tax Act, 1961 and shall include all tangible assets (other than land and building, furniture and fittings)”.
Ministry clarifies the above as follows:
“Udyam Portal captures depreciated cost as on 31st March each year of the relevant previous year. Therefore, the value of Plant and Machinery or Equipments shall mean the Written Down Value (WDV) as at the end of the Financial Year as defined in the Income Tax Act and not the cost of acquisition or original price, which was applicable in the context of the earlier classification criteria.
In this clarification, one thing on which the Ministry of MSMEs stressed the most is the registration of existing MSMEs. It advised at every possible stage for registration of existing MSMEs under the new Udyam portal and take the “Udyam Registration Number” well before 31/03/2021.
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