Notification on MSME dated 26th June, 2020

Classification of enterprises:

An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria:-

Type of Entity

Criteria of Investment

Micro Enterprise

Investment <= 1 Cr AND Turnover <= 5 Cr

Small Enterprise

Investment <= 10 Cr AND Turnover <= 50 Cr

Medium Enterprise

Investment <= 50 Cr AND Turnover <= 250 Cr

Composite criteria of Investment and Turnover will be applicable. It will be calculated on PAN Basis

Becoming a MSME:

  • Any person who intends to establish a MSME may file Udyam Registration online in the Udyam Registration portal. No documents or proofs required for registration. It will be granted on self-declaration basis.
  • On registration, an enterprise will be granted “Udyam Registration Number” as a identity and Udyam registration certificate will be issued on completion of registration process.

Calculation of Turnover-

  •  Export of goods or services or both shall be excluded while calculating turnover.
  •  Information as regards to Turnover and exports shall be linked to Income tax and GSTIN.
  •  The turnover related figures of such enterprise which do not have PAN will be considered on self-declaration basis for a period up to 31st March, 2021 and thereafter, PAN and GSTIN shall be mandatory

Calculation of investment in plant and machinery or equipment-

  • The calculation of investment in plant and machinery or equipment will be linked to the Income Tax Return (ITR) of the previous years filed under the Income Tax Act, 1961.
  • In case of a new enterprise, where no prior ITR is available, the investment will be based on self-declaration of the promoter of the enterprise and such relaxation shall end after
    the 31st March of the financial year in which it files its first ITR.
  • The expression Plant and Machinery include all tangible assets other than Land and Building, Furniture and Fittings.
  • Purchase value of P&M shall be taken into account excluding GST on self disclosure basis whether purchased new or second hand.
  • Cost of items specified shall be excluded while calculating investment in P&M.

Registration Process:

  • The form for registration shall be as provided on the Udyam Registration portal free of cost.
  • Aadhaar number of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership firm and of a karta in the case of a HUF shall be required for Udyam Registration.
  • 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.
  • In case an enterprise is duly registered as an Udyam with PAN, any deficiency of information for previous years when it did not have PAN shall be filled up on self-declaration basis.
  • No enterprise shall file more than one Udyam Registration. ( Number of activities can be added in One Udyam Registration).
  • Whoever intentionally misrepresents or attempts to suppress the self-declared facts and  figures appearing in the Udyam Registration or updation process shall be liable penalty.

Registration of existing enterprises-

  • 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.
  • All enterprises registered till 30th June, 2020, shall be re-classified in accordance with this notification.
  • The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period up to the 31stday of March, 2021.
  • An enterprise registered with any other organisation under the Ministry of Micro, Small and Medium Enterprises shall register itself under Udyam Registration

Updation of information and transition period in classification-

  • An enterprise having Udyam Registration Number shall update its information online in the Udyam Registration portal on self declaration basis.
  • Failure to update the relevant information will render the enterprise liable for suspension of its status.
  • Based on the information furnished or gathered from ITR or GSTIN, classification of enterprise will be updated.
  • In case of change in status of an enterprise, a communication will be sent to the enterprise about the change in the status.
  • In case of an upward change an enterprise will maintain its prevailing status till expiry of one year from the close of the year of registration.
  • In case of downward change of an enterprise,, the enterprise will continue in its present
    category till the closure of the financial year and it will be given the benefit of the changed status only with effect from 1st April of the financial year following the year in which such change took place

Facilitation and grievance redressal of enterprises

  • The Champions Control Rooms functioning in various institutions and offices of the Ministry
  • of MSME including the Development Institutes (MSME-DI) shall act as Single Window Systems for facilitating the registration process and further handholding the MSME.
  • The District Industries Centres (DICs) will also act as Single Window facilitation Systems in their Districts.
  • Any person who is not able to file the Udyam Registration for any reason including for lack
  • of Aadhaar number, may approach any of the above Single Window Systems.
  • In case of any discrepancy or complaint, the General Manager of the DIC of the concerned District shall undertake an enquiry for verification of the details of Udyam Registration submitted by the enterprise and thereafter forward the matter with necessary remarks to the Director or Commissioner or Industry Secretary concerned of the SG who after issuing a notice to the enterprise and after giving an opportunity to present its case and based on the findings, may amend the details or recommend to the Ministry of MSME, Government of India, for cancellation ofthe Udyam Registration Certificate.
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