MSME – Udyam Registration
Vide notification dated 26th June 2020, the Ministry of Micro, Small and Medium Enterprises notifies revised criteria for classifying the enterprises as Micro, Small and Medium Enterprises (i.e., MSME) and lay down the form and procedure for ‘Udyam Registration’. The present article briefly analysis the said notification.
The basis for classification of an enterprise as a micro, small and medium enterprise is-
|Classification||Investment in plant and machinery or equipment||Turnover|
|Micro enterprise||Not more than INR 1 Crore||Not more than INR 5 Crore|
|Small enterprise||Not more than INR 10 Crore||Not more than INR 50 Crore|
|Medium enterprise||Not more than INR 50 Crore||Not more than INR 250 Crore|
Following points are to be taken care of while calculating the investment in plant and machinery or equipment and turnover for the purpose of classification-
Udyam registration of new enterprise
In order to register under Udyam Registration Portal, the new enterprise is required to follow the below steps-
|Type of firm||The person whose Aadhaar number is required|
|Partnership firm||Managing partner|
|Hindu Undivided Family||Karta|
|Company or a Co-operative Society or a Trust or a Limited Liability Partnership||Authorized signatory|
Importantly, an enterprise can file only one Udyam registration. Additionally, a multiple number of activities of the enterprise i.e., manufacturing, services or both can be added in one Udyam registration.
Udyam registration for existing enterprise
The existing enterprises registered either under EM-Part – II or UAM or registered with any other organization under the Ministry of Micro, Small and Medium Enterprises are required to register again on the Udyam Registration Portal. Such enterprises are required to apply and obtain Udyam Registration on or after 1st July 2020.
The enterprises registered prior to 30th June 2020 should note the following points-
Updation of information in Udyam registration
The enterprise already having the Udyam registration number needs to update its information online on the Udyam Registration Portal. In case of failure, the enterprise would be liable for suspension of its status.
The classification of the enterprise shall be updated based on the information collected from the income tax return or the goods and service tax return. The updation, if any, and its consequence are explained hereunder-
|Type of updation||Consequence of updation|
|Upward graduation||The enterprise will continue to maintain its prevailing status till the expiry of one year from the close of the year of the registration.|
|Downward graduation||The enterprise will continue its prevailing status till the close of the financial year. The benefit of the changed status will be available from subsequent financial year.|