Major Changes in Udyam Registration (MSME)

Major Changes in Udyam Registration

The Ministry of Micro, Small, and Medium Enterprises (MSME) announced certain criteria for classifying businesses as MSMEs in a Notification dated June 26, 2020.

An enterprise is classed as a Micro Enterprise if its investment in plant and machinery or equipment is less than one crore rupees and its annual turnover is less than five crore rupees.

Also, Read- udyam registration

Small Enterprises are defined as businesses with an investment in plant and machinery or equipment of more than one crore rupees but less than ten crore rupees, and a turnover of more than five crore rupees but less than fifty crore rupees.

And an enterprise that invests more than ten crore rupees in plant and machinery or equipment but not more than fifty crore rupees, and has a turnover of more than fifty crore rupees but not more than two hundred and fifty crore rupees, is classed as a Medium Enterprise.

Note 1: If an enterprise exceeds the ceiling restrictions for either of the two criteria of turnover and investment for an existing category, it will cease to exist in that category and will be moved to the next higher category based on the investment and turnover requirements. However, an enterprise will only be put in the lower group if it meets both the investment and turnover criteria.

Note 2: All units with the same PAN number but distinct GSTIN numbers are classified as a single entity, and the aggregate limit of turnover and investment is used to determine whether the business is micro, small, or medium.

Application for Udyam Registration: 

To apply as a Micro, Small, or Medium Enterprise, you must fill out an online application based on your self-declaration, with no need to upload any documents to the MSME Registration Portal. An enterprise will be granted a permanent identity number, known as the “Udyam Registration Number,” as well as an e-certificate, known as the “Udyam Registration Certificate,” after a successful registration.

Calculation of Udyam Registration Investment Value:

The value of an investment in plant, machinery, or equipment will be linked to the previous year’s Income Tax Return filed under the Income Tax Act of 1961. In the case of a newly established firm, the value of the plant, machinery, or equipment will be determined by the promoter’s self-declaration.

In the case of the purchase of any plant, machinery, or equipment, the purchase price (excluding GST) shall be used to determine the investment value.

The term “plant and machinery or equipment” should have the same meaning as “plant and machinery” as defined in the Income Tax Rules, 1962, as enacted under the Income Tax Act, 1961, and shall encompass all physical assets (other than land and building and furniture and fittings).

Calculation of Udyam Registration’s turnover:

All information must be linked to the GSTN portal or the Income Tax site for the purpose of calculating an enterprise’s turnover for categorization purposes, and the value of export will be removed from the total turnover of the enterprise.

For filling the registration form, the right person’s Aadhar number [Managing Partner in the case of a partnership firm] is necessary.

The authorized signatory of a corporation, LLP, Co-operative Society, or Trust must supply his GSTN, PAN, and Aadhaar Number.

Note: If an entity engages in many types of business or services or both, such businesses or services can be identified or added in a single MSME Registration. There is no need to register separately.

Existing business Udyam registration:

On or after July 1, 2020, all current businesses registered as EM-Part II [Entrepreneurs Memorandum] or UAM [Udyog Aadhar Memorandum] must re-register. All businesses that were registered prior to July 1, 2020, will be reclassified according to the new criteria, and their current registration certificate will be valid until March 31, 2021.

Information update and classification transition period:

An organization with an MSME registration number [URN] must update its information on the Udyam Registration Portal, including the contents of the previous year’s ITR and GST returns. If a company fails to provide information to MSME Portal, the company’s status may be suspended.

The classification of the enterprises will be changed based on the information provided by the business, and a notification of the change of classification will be delivered to the business.

By 12disruptors Admin

Leave a Reply

Your email address will not be published. Required fields are marked *