What is MSMEs?
In India, both sectors have their unique importance small enterprises and big enterprises. MSMEs are the very small or medium types of Enterprises. MSME stands for Micro Small and Medium Enterprises. these enterprises can be Manufacturing enterprises or service enterprises. where the maximum turnover of Manufacturing & Services Enterprises is 250 crore and Investment in plant & Machinery is 50 crore. this is based on Revised MSME Definition.
|Investment in Plant & Machinery||<1 Crore||<10 Crore||<50 Crore|
|Turnover||<5 Crore||<50 Crore||<250 Crore|
Earlier MSME classification was done on the basis of Investment in Plant and machinery or equipment. Therefore to avail benefits of MSME Registration, Enterprises have to limit their investment in Plant and machinery to a lower limit. but after revision of the scheme of MSME, new criteria for classification have been defined by the Ministry of Micro, Small and Medium Enterprises on 26 June 2020 with composite criteria of both Investment and Annual Turnover. Means For the classification of MSME both the conditions should be satisfied.
Important Point for calculation of Turnover and Investment in P&M
- If any enterprise crosses its ceiling limit specified from the present category it will be placed in the next higher category. Provided no enterprises shall be placed for lower category unless it goes below the ceiling limit in both criteria of Investment as well as Turnover.
- All Units of Enterprises registered under the GST Act against the same PAN shall be treated as one Enterprise and aggregate value of Investment and Turnover shall be considered for classification.
- Calculation of Investment of Plant & Machinery or Equipment will be linked to Income Tax Return of the Previous Year filed under Income Tax Act, 1961.
- In the case of a New Enterprise where no ITR is available, the Calculation of Investment will be done on basis of Self Declaration basis. Provided this relaxation shall end when the enterprise files its first Income Tax Return.
- Definition of Plant & Machinery or Equipment shall be as given in Income Tax Act, 1961.
- In Case of Self Declaration of Plant & Machinery, Invoice Value of Purchased (whether First hand or Second hand) excluding GST paid on it shall be taken.
- Cost of Certain items shall also be excluded as per explanation given under section 7(1) of MSME act,2006 from the amount of Investment.
What is Udyam Registration?
Under the Aatmanirbhar Bharat Abhiyan, the government of India announced a revised scheme for MSMEs and replaced the MSME registration with Udyam Registration.
- 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 reclassified 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 organization under the Ministry of Micro, Small, and Medium Enterprises shall register itself under Udyam Registration.
Note:- There is no difference between MSME certificate, Udyam Registration Certificate and Udyog Aadhar.
Information Required for MSME Registration/Udyam Registration
- Aadhaar card of the business owner.
- PAN card of the business owner and account details
- Name of your Business or enterprise.
- The investment made in the enterprises by the owner.
- The total number of workers employed.
- Current activities of your firm.
- National Industrial Classification (NIC) Code
- Email ID and mobile number of the owner.
Important point related to required Information:-
- The Aadhaar number shall be 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 Hindu Undivided Family (HUF).
- In case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organization or its authorized 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 a self-declaration basis.
What are the Benefits of Udyam Registration?
As we already discuss that MSME contribute to the development of India. Therefore, India launch this scheme for the development and betterment of the Micro, small and Medium sector. Under this scheme government gives a few benefits for the development of MSME, here are the a few benefits given below:-
- MSME can get loans from banks at a lower rate of interest.
- Under the Income Tax Act, MSME Can get the benefit of credit of MAT to be carried forward for 15 years instead of 10 years.
- It becomes easier to acquire Government Tenders because the Udyam registration portal is linked with Government e-Marketplace and other State Governments portals which provides marketplace and e-tenders.
- MSME has the benefits of the One Time Settlement fee for non-payments of Amount.
- Governments also give many rebates and concessions, which ultimately reduce the cost of the set-up of the business.
- MSME registered enterprises also have the benefit of subsidy on Patent/TradeMarks registration by giving applications to respective ministries.
- Such registered MSME is also eligible for a subsidy for Industrial promotion by the government.
- MSMEs are protected from the delayed payments and also have the right to collect interest on the payments.
- MSME may avail the benefit of a lower electricity bill by filing an application to the department along with a Udyam registration certificate.
- MSMEs can also enjoy the benefits of exemption under the Income Tax Act, 1961 in the initial year as per the scheme specified by the Government.
- Apart from the above MSMEs has also many other benefits like IPS Subsidy, NSIC performance Subsidy, Bar code Subsidy, etc.
- MSME can also take the benefits of the TReDS scheme of Govt. you can read here in detail- “What is TReDS scheme for MSME? and How it is work?
How to Register MSME online and Process for Udyam registration Certifiacte?
- Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online in the Udyam Registration portal, based on self-declaration with no requirement to upload documents, papers, certificates or proof just Visit the official website of Udyam Registration is https://udyamregistration.gov.in/
- There are two categories are available on the portal through which enterprises can get Udyam Registration:-
- For New Entrepreneurs who are not registered yet as MSME or those with EM-II
- For old Entrepreneurs –
- for those already having registration as UAM or
- For those already having registration as UAM through Assisted filling
- Enter your personal information like the name of the owner and 12-digit Aadhaar number.
- PAN & GST linked details on investment and turnover of enterprises will be taken automatically from Government databases.
- Having PAN & GST number is mandatory from 01.04.2021.
- On registration, an enterprise (referred to as “Udyam” in the Udyam Registration portal) will be assigned a permanent identification number to be known as “‘Udyam Registration Number”.
- An e-certificate, namely, “Udyam Registration Certificate” shall be issued on completion of the registration process.
!!!!! Thanku !!!!!Team CA Info