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    By CA Amit Bansal

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    Sindhuja Bhaskara
    An enterprise is defined as any company engaged in manufacturing or services. The Ministry of Micro, Small and Medium Enterprises amended the definition via a 2020 notification, setting twin criteria of investment amount and annual turnover for classification. MSMEs are important for employment, contributing 29% to India's GDP and 50% of exports. The revised classification uses composite criteria of investment amounts ranging from less than Rs. 1 crore to Rs. 50 crore for micro to medium enterprises, along with annual turnover thresholds. Benefits include priority lending, subsidies, and protection against delayed payments.

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    By CA Amit Bansal

    Uploaded by

    Sindhuja Bhaskara
    33 views30 pages
    An enterprise is defined as any company engaged in manufacturing or services. The Ministry of Micro, Small and Medium Enterprises amended the definition via a 2020 notification, setting twin criteria of investment amount and annual turnover for classification. MSMEs are important for employment, contributing 29% to India's GDP and 50% of exports. The revised classification uses composite criteria of investment amounts ranging from less than Rs. 1 crore to Rs. 50 crore for micro to medium enterprises, along with annual turnover thresholds. Benefits include priority lending, subsidies, and protection against delayed payments.

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    An enterprise is defined as any company engaged in manufacturing or services. The Ministry of Micro, Small and Medium Enterprises amended the definition via a 2020 notification, setting twin criteria of investment amount and annual turnover for classification. MSMEs are important for employment, contributing 29% to India's GDP and 50% of exports. The revised classification uses composite criteria of investment amounts ranging from less than Rs. 1 crore to Rs. 50 crore for micro to medium enterprises, along with annual turnover thresholds. Benefits include priority lending, subsidies, and protection against delayed payments.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    33 views30 pages

    By CA Amit Bansal

    Uploaded by

    Sindhuja Bhaskara
    An enterprise is defined as any company engaged in manufacturing or services. The Ministry of Micro, Small and Medium Enterprises amended the definition via a 2020 notification, setting twin criteria of investment amount and annual turnover for classification. MSMEs are important for employment, contributing 29% to India's GDP and 50% of exports. The revised classification uses composite criteria of investment amounts ranging from less than Rs. 1 crore to Rs. 50 crore for micro to medium enterprises, along with annual turnover thresholds. Benefits include priority lending, subsidies, and protection against delayed payments.

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    By

    CA Amit Bansal
    WHAT IS ENTERPRISE :

     Enterprises engage in the manufacture or


    production of goods pertaining to any industry
    specified into first schedule of industries in the
    Development and Regulation Act, 1951 or Enterprises
    engaged in providing services
     To facilitate the development of these enterprises
    and enhance their competitiveness
     To facilitate the supply chain

     To enhance the productiveness


     Ministry of Micro Small and Medium Enterprises
    amended the definition of MSME via notification
    dated 26th June 2020.
     The revised definition provides twin criteria :
    • Investment in Plant & Machinery or Equipment
    • Turnover
     No distinction between Manufacturing and
    Service Enterprises
     Approx. 63.50 million MSME units in India

     Generate employment in large scale specially in


    Rural Areas

     MSMEs contributes approx. 29% of total GDP

     Approx. 50% contribution to overall export from


    India
    CLASSIFICATION CRITERIA
    Existing MSME Classification
    Criteria: Investment in Plant & Machinery or Equipment
    Classification Micro Small Medium
    Mfg. Enterprises Investment < Rs. 25 lakh. Investment < Rs. 5 cr. Investment < Rs. 10 cr.
    Services Investment < Rs. 10 lakh. Investment < Rs. 2 cr. Investment < Rs. 5 cr.

    Revised MSME Classification


    Composite Criteria: Investment and Annual Turnover

    Classification Micro Small Medium

    Investment < Rs. 1 cr. Investment< Rs. 10 cr. Investment< Rs. 50 cr.
    Manufacturing
    and and and
    & Services
    Turnover < Rs.5 cr. Turnover < Rs.50 cr. Turnover < Rs.250 cr.
     In case of Upward change, enterprise will maintain its
    prevailing status till expiry of one year from the close
    of the Financial year of registration.

     In case of Reverse-graduation,Enterprise will continue


    in its present category till the closure of the financial
    year.

     Benefit of the changed status only w.e.f 01st April of


    the F.Y. following the year in which such change took
    place.
     NOTIFICATION NO. 2119(E) DATED 26.06.2020
    HAS SUPRESSED VARIOUS FOLLOWING
    NOTIFICATIONS :
    • S.O. 1702(E ) Dt. 01.06.2020
    • S.O. 2052 (E ) Dt. 30.06.2017
    • S.O. 3322 (E ) Dt. 01.11.2013
    • S.O. 1722 (E ) Dt. 05.10.2006
     Linked to the ITR of the previous year filed under
    Income Tax
     Self Declaration by New Enterprise and declaration
    will be valid till March 31 of the F.Y. in which ITR is
    filed
     Plant & Machinery as assigned in the Income Tax
    Rules, 1962
     All tangible assets other than Land & Building,
    Furniture & Fixtures
     For New Enterprises Purchase/Invoice Value of Plant &
    Machinery or Equipment for both New & Second hand

     GST to exclude for New Enterprises.

     Items Specified in the Explanation 1 to sub section (1)


    of section 7 of MSMED Act to be excluded.
     Turnover shall be linked to the Income Tax Act
    or CGST Act and GSTIN.

     Exports Turnover not to be part of Total


    Turnover

     Self Declaration Turnover upto March 31, 2021

     PAN and GSTIN mandatory after March 31, 2021


     New Definition of MSME

     Linked with GST and Income Tax Details

     Udyog Aadhar is now Udyam Registration Certificate

     Udyam Registration is to be done on or after 01st July,


    2020

     All Existing registered MSMEs have to apply again for


    Udyam on or after 01.07 .2020 but before 31.03.2021
     Based on Self Declaration
     Free of Cost

     No Document to Upload

     E Udyam Registration available online

     One Udyam Registration again One PAN


     Champion Portal
     DICs will also act as Single Window Facilitation Systems
     Priority Lending

     Collateral Free Loans

     Loan from banks with low interest rate

     Subsidy on Patent Registration

     Industrial Promotion Subsidy

     Technology Upgradation linked subsidy


     Protection against delayed payments

     Easy to get licenses, approvals, and registrations

     Reimbursement of Foreign Exhibitions Charges

     Benefits of stimulus Package

     Proof of Legal Existence

     Recent other Benefits

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