In a recent announcement made by our Financial Minister Nirmala Sitharaman has brought some modification to the Micro, Small, Medium Enterprises classification.
The notification of revised MSME modification is highly sensitive and will take immediate effect from 1st July 2020.
To know about what changes have been made, keep reading this article…!
The Ministry of MSM Enterprises consulted its notification dated 26th June, 2020 has informed/showed certain criteria for classifying the enterprise as micro, small and medium enterprises and specified procedure for filing the memorandum, for both new and existing, with effect from 1st July 2020.
In legal terms, these changes made for MSME are also referred to as revised MSME.
What Is Revised MSME Classification?
The changes, modification, and updation made to classify the micro, small, and medium enterprise with new investment and turnover basis (according to the recent modification) leaving the backed classification ideal (no usage further) is known as revised MSME classification.
Following are the changes made by the higher supervision.
- According to the new classification is concerned, the venture, where the capital employed in plant and machinery or other equipment doesn’t surpass one crore rupees and turnover doesn’t surpass five crore rupees, will be considered as Micro Enterprise.
- Further, the enterprise, where the investment in plant and machinery or other equipment doesn’t surpass ten crore rupees and turnover doesn’t surpass fifty crore rupees, will be considered as Small Enterprise.
- Additionally, the undertaking, where the capital investment made in plant and machinery or other equipment doesn’t surpass fifty crore rupees and turnover doesn’t surpass 200 and fifty crore rupees, will be considered as Medium Enterprise.
Also look at the table…!
|Investments||< Rs.1 crore||< Rs.10 crore||< Rs.50 crore|
|Turnover||< Rs.5 crore||< Rs.50 crore||< Rs.250 crore|
So, the calculation of investment in tangible assets is also redefined by the ministry…!
The estimation of investment in plant and machinery or equipment will be based on the Income Tax Return (ITR) of the earlier year documented under the Income Tax Act, 1961. It is additionally explained in the aforementioned notice that the plant and apparatus will incorporate every single substantial resource other than land and building and furniture and fittings.
All units with Goods and Services Tax Identification Number (GSTIN) recorded against a similar Permanent Account Number (PAN) will be by and large considered as one undertaking for the calculation of turnover and speculation for choosing the classification as smaller scale, little or medium venture.
For MSME registration in India will be executed and completed through Udyam Registration Portal. It shall be important for all already enrolled enterprises registered under EM-Part-II or UAM shall register again on the Udyam Registration Portal on or after 1st July, 2020.
However, the existing enterprises registered prior to 30th June, 2020 shall continue to be valid only for a period upto 31st day of March, 2021. And, one enterprise shall be only allowed to have one Udyam registration, wherein it may include any number of activities in the said registration.
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