MSME Classifications and Registration Requirements w.e.f. 01.07.2020

MSME Classifications and Registration Requirements w.e.f. 01.07.2020
Ministry of Micro, Small and Medium Enterprises have come out with notification no. [F. No. 21(5)/2019-P&G/Policy (Pt-IV)] dated 26th June 2020, wherein following new criteria of classification of enterprises and new registration procedures under MSMED Act,2006:-
Classification
Micro Enterprises	·         Investment in Plant & Machinery or Equipment - Not more than 1 Crore ·         Turnover- Not more than 5 Crores
Small Enterprises	·         Investment in Plant & Machinery or Equipment- Not more than 10 Crores ·         Turnover- Not more than 50 Crores
Medium Enterprises	·         Investment in Plant & Machinery or Equipment- Not more than 50 Crores ·         Turnover- Not more than 250 Crores
Criteria of investment and turnover for classification
1.      Investment and Turnover criteria shall be considered together for classification. 2.      All units with GSTIN under same PAN shall be considered collectively i.e. Investment and turnover of all the units shall be considered collectively  3.      For calculation of Investment in Plant & Machinery: - a.      Investment declared in previous year Income Tax Return shall be considered. b.      If there is no previous year Income Tax Return, self-declaration shall be filed by promoter. c.       Value in Purchase invoice excluding GST shall be considered, where there is no Income Tax Return. d.      Plant & Machinery or Equipment shall be all tangible asset except Land & Building and Furniture & Fittings. e.      Definition of Plant & Machinery or Equipment shall be considered as written in Income Tax Act,1961 4.      For calculation of Turnover: - a.      Export turnover shall be excluded. b.      Value of turnover and export shall be linked with Income Tax and GST c.       For Enterprises not having PAN turnover shall be considered on self-declaration basis upto 31.03.2021. After that obtaining of PAN shall be mandatory for enterprises
Registration for New Enterprises
1.      Aadhar Number shall be required for registration at Udyam Registration portal. 2.      Criteria of usage of Aadhar number shall be : Constitution Whose Aadhar shall be required Proprietorship Aadhar Number of proprietor Partnership Aadhar Number of managing partner HUF Aadhar Number of Karta Company, LLP, Cooperative Society, Society or Trust GSTIN & PAN of Organisation and Aadhar of authorised signatory
Registration for Existing Enterprises
1.      All enterprises registered under EM–Part-II or UAM (i.e. existing Udyog Aadhar) shall register again on Udyam Registration portal. 2.      Enterprises shall be reclassified as per new criteria. 3.      Existing registration shall be valid upto 31st March, 2021.
Post- Registration procedures
1.      Udyam Registration Number (URN) shall be allotted to the enterprises. 2.      After URN is allotted enterprises shall update the details of ITR and GST return relating to previous year, on Udyam Registration portal. 3.      If details are not updated in prescribed time, status of MSME may be suspended. 4.      After the details are update by enterprise, status of enterprise shall get updated on portal. 5.      If there is any change in status, as applied, communication shall be sent to enterprise. 6.      If status is shifted upward, enterprise shall continue its existing status till one year from end of year of registration. 7.      If status is shifted downward, enterprise shall continue its status till the end of financial year. And benefits of new status shall be applicable from 01st April of new year.
Disclaimer: The entire above stated article is squarely based on our opinion, derived from the interpretation of the respective notification. The observations are personal view and authors do not take responsibility of the same and this cannot be quoted before any authority. Users shall also refer to gazette notification before arriving to any decision.