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MSME Updates: New definition, criterion will come into effect from July 1st

Vishnu Vasisht

The Central government has taken a big step to increase small industries in the country. Under this, the Ministry of Micro, Small and Medium Enterprises (MSME) has issued a joint notification of guidelines for classification and registration of MSMEs. With this, from now on, i.e., July 1, there will be no need for any kind of documents for registration of MSMEs.

With the launch of the new enterprise guideline by the government, the new system of classification, registration and facilitation of MSME has been greatly simplified. This is a big and revolutionary step in the path of very easy business. The Union Minister said that it is clear from these decisions of the government that the Ministry stands firmly with the MSMEs facing challenges in this time of crisis.

Not only this, the new notification of classification and registration of MSMEs will cancel all the old notifications. Now entrepreneurs, enterprises and MSMEs have to process the classification and registration as per the new notification.

In fact, the MSME Ministry had issued new norms for classification of MSMEs from June 1 on the basis of investment and turnover. Officials say that the process of enterprise registration is integrated with the system of income tax and GST. The information given at the time of registration can be verified through PAN number or GSTIN. As per the notification, an enterprise can also be registered only through Aadhaar number. Other information can be given on the basis of self-declaration.

Highlights of the new guidelines are as below:

  1. The Guidelines are effective from the 1st day of July, 2020.
  2. New Classification:
  3. a. Micro - Investment Up to 1 Crore & Turnover Up to 5 Crores
    b. Small - Investment Up to 10 Crores & Turnover Up to 50 Crores
    c. Medium - Investment Up to 50 Crores & Turnover Up to 250 Crores
  4. Now Trading entities can also register under MSME.
  5. Now the MSME Registration shall be called file Udyam Registration and can be done online in the Udyam Registration portal.
  6. Exports of goods or services or both, shall be excluded while calculating the turnover.
  7. All existing enterprises registered under EM–Part-II or UAM shall register again on the Udyam Registration portal.
  8. The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for a period up to the 31st March, 2021.

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