MSME

Consolidated notification on MSME classification and registration hailed

LN Revathy Coimbatore | Updated on June 27, 2020 Published on June 27, 2020

The Micro Small and Medium Enterprises (MSME) Ministry has issued consolidated notification for classification and registration of MSMEs to be effected from July 1.

Issued after detailed consultation with various stakeholders including advisory committee, officials of Income Tax and GST, State Governments and associations, this notification would supercede all earlier notifications with regard to classification or registration of MSMEs, states a PIB release.

The notification says that an MSME would hereafter been referred to as Udyam and the registration process as Udyam Registration.

The Registration can be filed online based on self-declaration. Uploading of documents, papers or certificate as proof would not be necessary henceforth. The process has been integrated with the income tax and GST systems. “It would be a paper-less exercise in a true sense,” officials said.

The basic criteria for MSME classification would be on investment in plant, machinery and equipment and turnover. As per the latest classification, Micro enterprises would be those with investments not exceeding Rs one crore and turnover of Rs 5 crore, while those with investment up to Rs 10 crore and turnover of up to Rs 50 crore have been categorised as Small and the Medium enterprises - as those with investments not exceeding Rs 50 crore and turnover of Rs 250 crore.

The notification clarifies that export of goods or services or both would be excluded while calculating the turnover of any enterprise, whether micro, small or medium; and investment calculation linked to the IT return of the previous year

For new enterprises (where no prior ITR is available), the ministry has said that self-declaration of the promoter would suffice till the tax returns are filed.

The ministry has established a facilitation mechanism – a Single Window System at the district and regional level to ease the Udyam Registration process. At the district level, the DICs (District Industries Centres) would help entrepreneurs who have issue wit. The Champions Control Room across the country have been made legally responsible for facilitating such entrepreneurs in registration and thereafter.

Apparel Export Promotion Council reaction

Hailing the notification issued late last evening “as a historic step”, Apparel Export Promotion Council Chairman A Sakthivel said that the measures would completely change the way MSMEs work, ensure they compete globally besides resulting in newer enterprises entering the fray. “The economy currently needs this,” he said (referring to the birth of many enterprises).

Reiterating that MSMEs are the backbone of the economy in terms of GDP, exports and job creation, he said “with the stimulus, these enterprises will be in a position to lead to a fast V-shaped recovery the moment the pandemic is brought under control.”

“Registering an enterprise on the basis of Aadhar number is another plus, considering that there would not be any need to upload any paper document; this would encourage enterprising youth to join a host of us in this entrepreneurial journey, steer the economy through this crucial phase and prepare for the post-Covid world.”

The AEPC Chairman did not fail to acknowledge the government’s acceptance of the Council’s plea for raising the investment limit of MSMEs and excluding the export turnover in calculating the turnover limit.

Published on June 27, 2020
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