MSME notifies certain criteria for classifying the enterprises as micro, small and medium enterprises

Jun 29, 2020 | by Avantis RegTech Legal Research Team


Finance & Taxation Compliance

The Micro, Small and Medium Enterprises (MSME) on June 26, 2020 notifies certain criteria for classifying the enterprises as micro, small and medium enterprises and specifies the form and procedure for filing the memorandum with effect from July 01, 2020.

The classification is based on the following criteria:

 A micro enterprise, where the investment in plant and machinery or equipment does not exceed Rs. 1 crore and turnover does not exceed Rs. 5 crore.

 A small enterprise, where the investment in plant and machinery or equipment does not exceed Rs. 10 crore and turnover does not exceed Rs. 50 crore.

 A medium enterprise, where the investment in plant and machinery or equipment does not exceed Rs. 50 crore and turnover does not exceed Rs. 250 crore.  

Eligibility criteria for registration of an enterprise:

 Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online in the Udyam Registration portal, based on self-declaration with no requirement to upload documents, papers, certificates or proof. 

 An enterprise having Udyam Registration Number shall update its information online in the Udyam Registration portal, including the details of the ITR and the GST Return for the previous financial year and such other additional information as may be required, on self-declaration basis. 

 Exports of goods or services or both, shall be excluded while calculating the turnover of any enterprise whether micro, small or medium, for the purposes of classification.

 Failure to update the relevant information within the period specified in the online Udyam Registration portal will render the enterprise liable for suspension of its status.

 On registration, an enterprise will be assigned a permanent identity number to be known as Udyam Registration Number.

 An e-certificate shall be issued on completion of the registration process.

 If an enterprise crosses the ceiling limits specified for its present category in either of the two criteria of investment or turnover, it will cease to exist in that category and be placed in the next higher category but no enterprise shall be placed in the lower category unless it goes below the ceiling limits specified for its present category in both the criteria of investment as well as turnover.

[Notification No. S.O. 2119(E)]


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